China Fund Daily reporter Fang Li and Zhang Yanbei
On July 4 this year, the Hong Kong stock market and the A-share market are about to usher in a historic event.
On the evening of June 28, the China Securities Regulatory Commission and Hong Kong Securities Regulatory Commission jointly issued an announcement announcing that the ETF interconnection will be officially launched next Monday. )product.
According to the latest announcement, there are 87 eligible targets included in the first batch of ETF Connect.Among them, mainland investors can buy 4 Hong Kong stock ETFs through the southbound Shanghai-Hong Kong Stock Connect and the southbound Shenzhen-Hong Kong Stock Connect.Hong Kong investors can buy 83 A-share ETFs through Northbound Shanghai-Shenzhen Stock Connect.
According to the industry, the inclusion of ETF, an indexed fund product in China Connect, will enrich the variety of connected investments, further facilitate domestic and foreign investors to participate in the capital markets of the two places, further facilitate the participation of domestic and foreign investors in the capital markets of the two places, and enhance the A-shares’ access to overseas markets. The attractiveness of medium- and long-term allocation-oriented funds will improve the institutional openness of the mainland capital market, and will also help further consolidate and enhance Hong Kong's status as an international financial center.
Just announced:
ETF trading under Connect will begin on July 4
On the evening of June 28, the China Securities Regulatory Commission and the Hong Kong Securities and Futures Commission issued a "Joint Announcement", officially announcing that the inclusion of ETFs in the interconnection mechanism was officially approved and launched, and ETF transactions under the interconnection will be launched on July 4, 2022 starts next Monday.
The China Securities Regulatory Commission pointed out that since the China Securities Regulatory Commission and the Hong Kong Securities Regulatory Commission issued a joint announcement on May 27 this year, the regulators of the two places have worked together on the preparation of ETFs to be included in the interconnection.At present, relevant business rules, operational plans and regulatory arrangements have been determined, and the technical system is ready.Investors should fully understand the differences in laws and regulations, business rules and practical operations between the two markets, prudently assess and control risks, and rationally carry out interconnection-related investments.
The China Securities Regulatory Commission also stated that all parties in the market should step up preparations for the launch to ensure the smooth implementation of the inclusion of ETFs in the Connectivity.
In recent years, the CSRC has promoted the interconnection of financial markets and financial infrastructure between the Mainland and Hong Kong in an orderly manner. On November 17, 2014 and December 5, 2016, the China Securities Regulatory Commission launched the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect mechanisms, creating a convenient, convenient, A new model of cross-border investment with controllable risks.
According to the industry, since the opening of Shanghai-Shenzhen-Hong Kong Stock Connect, the overall operation has been stable and orderly. The CSRC has continued to optimize and improve various systems such as trading, settlement, and supervision of Shanghai-Shenzhen-Hong Kong Stock Connect, expand the daily quota of Shanghai-Shenzhen-Hong Kong Stock Connect, and promote the "see-through" approach to the north-south direction. "Supervision, companies with different voting rights, biotech companies listed in Hong Kong, and stocks of science and technology innovation board companies have been included in the subject, to promote the high-level opening of the mainland capital market to the outside world, and to promote the common development of the two markets.
Data show that by the end of May 2022, the total net inflow of funds from Shanghai and Shenzhen Stock Connect was about 1,633.4 billion yuan, and the total net inflow of funds from Hong Kong Stock Connect was about 2,009.8 billion yuan.The inclusion of ETFs in the interconnection this time will further introduce long-term allocation funds into the two markets.
The SFCs of the two places have a long-standing intention to include ETFs in the Stock Connect.As early as 2016, the China Securities Regulatory Commission and the China Securities Regulatory Commission reached a consensus on the inclusion of ETFs as investment targets in China Connect.
In December 2021, the Shanghai Stock Exchange, Shenzhen Stock Exchange, The Stock Exchange of Hong Kong Limited, China Securities Depository and Clearing Corporation Limited, and Hong Kong Securities Clearing Company Limited reached a consensus on the inclusion of ETFs in the overall interconnection plan.
On May 27 this year, the China Securities Regulatory Commission and the Hong Kong Securities Regulatory Commission issued a joint announcement, announcing that the two exchanges agreed in principle to include ETFs in the interconnection, and on the "Announcement on the Relevant Arrangements for the Inclusion of Exchanged Open-end Funds in the Connectivity" (hereinafter referred to as "Announcement") for public comments.
The "Announcement" consists of 5 articles. The first is to clarify that the trading interconnection mechanism between the mainland and Hong Kong stock markets will be extended to exchange-traded funds. The second is to clarify the relevant institutional arrangements with reference to the stock interconnection. For the relevant requirements of securities companies and public fund managers, the fifth is to clarify the relevant arrangements for the detailed business implementation rules.
In fact, ETF Link originally had a market system preparation period of at least two months, and the final launch time was much earlier than the original plan.On June 24, the China Securities Regulatory Commission officially announced that ETFs will be included in the interconnection mechanism.Then, on June 28, the China Securities Regulatory Commission issued a joint announcement, announcing that ETF interconnection will be launched on July 4.
According to the consultation drafts previously issued by the Shanghai Stock Exchange and the Shenzhen Stock Exchange, ETFs eligible for inclusion in the Stock Connect must meet the following four conditions.
First, it has been listed for 6 months, and the underlying index has been released for one year; second, the average daily asset size of the ETF in the mainland market in the past 6 months is not less than 1.5 billion yuan, and the constituent securities are mainly the underlying stocks of Shenzhen and Shanghai Stock Connect. ; Third, the average daily asset size of ETFs in the Hong Kong market in the past six months has reached 1.7 billion Hong Kong dollars, and the constituent securities are mainly the underlying stocks of Hong Kong Stock Connect; in addition, they are not synthetic ETFs, leveraged and inverse products.
The first batch of eligible targets included in ETF Pass released
The inclusion of ETFs in the Mainland and Hong Kong stock market trading interconnection mechanism is about to be officially launched, and the list of ETFs to be included under Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect has also been newly released.
According to the latest announcement of the Shanghai, Shenzhen and Hong Kong exchanges, there are 87 eligible targets included in the first batch of ETF Connect, of which mainland investors can buy 4 through the Southbound Shanghai-Hong Kong Stock Connect and the Southbound Shenzhen-Hong Kong Stock Connect respectively. Hong Kong stock ETFs, Hong Kong investors can buy 83 A-share ETFs through Northbound Shanghai and Shenzhen Stock Connect.
On June 28, the Shenzhen Stock Exchange and the Shanghai Stock Exchange released news respectively.In response to the fact that ETFs will be officially launched on July 4, 2022, the Shanghai and Shenzhen Stock Exchanges commented, "This is a landmark achievement of the continuous optimization and improvement of the interconnection mechanism, and it is also a solid advancement. It is another important measure to comprehensively deepen the reform of the capital market, promote high-level opening to the outside world, and serve the construction of the Guangdong-Hong Kong-Macao Greater Bay Area."
In the early stage, both the Shenzhen Stock Exchange and the Shanghai Stock Exchange have issued relevant business rules, clarifying the conditions for the inclusion of ETFs, adjustment mechanisms, trading arrangements and other matters.At the same time, the Exchange cooperates closely with relevant parties, organizes market participants to make various preparations, and jointly conducts multiple technical system tests with member institutions, urges members to strengthen business risk prevention, and conscientiously provide investor education services.At present, preparations for business, technology and market are basically ready.
On the evening of the same day, the Shanghai and Shenzhen Stock Exchanges and the Hong Kong Stock Exchange announced the first batch of ETFs subject to Shanghai-Shenzhen-Hong Kong Stock Connect on June 28, which will be officially included in the scope of the Shanghai-Shenzhen-Hong Kong Stock Connect target on July 4.
Among them, there are 53 ETFs for Shanghai Stock Connect, including SSE 50ETF, financial ETF, dividend ETF, etc.; 30 ETFs for Shenzhen Stock Connect, covering core broad-based products such as GEM ETF and CSI 300 ETF, as well as biotechnology ETF, chip ETF, carbon ETF, etc. Representative industry themed products such as Zhonghe ETF are mainly concentrated in the fields of advanced manufacturing, digital economy and green and low carbon.There are a total of 4 ETFs in Hong Kong Stock Connect, including stock ETFs such as Tracker Fund.
At the same time, the Shanghai Stock Exchange also announced that ETFs that meet the conditions for inclusion under the Shanghai-Hong Kong Stock Connect (see the table below) will be included for the first time:
