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Joseph Chan: Preparatory Work for Relaxing ETF Scope Expected to Finish in 3 Mths
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The China Securities Regulatory Commission (CSRC) announced five new measures earlier to support enhanced cooperation between the Mainland and Hong Kong's capital markets. In an interview with Hong Kong Commercial Daily, Joseph Chan, Under Secretary for Financial Services and the Treasury, said the new measures would help to boost the momentum of the Hong Kong stock market as well as the city's capital market as a whole. The Hong Kong government's task included the technical work of relaxing the scope of the Exchange Traded Funds (ETFs), and the preparatory work is expected to take around 3 months. Chan pointed out that the average daily turnover of ETFs in Hong Kong was $14 billion in 2023, representing an increase of about 80% compared with 2021. It is believed that this is due to the broadening of product categories after the opening of "ETF Connect" in 2022, which will promote market liquidity, and that with the broadening of the product scope of ETFs participating in the mutual market access, it is hoped that more capital will be brought to Hong Kong market. As for supporting the inclusion of RMB trading counters in the Southbound Stock Connect, Chan said Hong Kong is the world's largest offshore RMB hub. At present, the Mainland Exchanges and the Hong Kong Securities Clearing Company have reached a preliminary consensus and are in the process of finalising the technical arrangements. It is believed that after the introduction of the measure, Mainland investors will be able to save costs and time, and the stocks with RMB counters will be able to receive more attention, thus facilitating the internationalisation of RMB and the liquidity of RMB in Hong Kong. Chan hoped that the depth and breadth of mutual market access would continue to be enhanced in the future. AAStocks Financial News |
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