Mainland China, Hong Kong bourses add ETFs to stock connect schemes – Reuters

Register now for FREE unlimited access to

BEIJING, Dec 24 (Reuters) – The Shanghai Stock Exchange (SSE) said on Friday it had reached an agreement with bourses in Shenzhen and Hong Kong, as well as with China Securities Depository and Clearing Corp, to include exchange-traded funds (ETFs) in stock connect schemes.

An ETF is a basket of securities that is listed on an exchange like a stock, offering exposure to a sector or index without the investor having to buy the underlying assets.

The SSE said in a statement that the parties – including the Shenzhen Stock Exchange and Hong Kong Exchanges and Clearing Ltd (HKEx> (0388.HK) – would now step up business and technical preparations related to the inclusion of ETFs, a process estimated to take around six months.

Register now for FREE unlimited access to

“This agreement … will give global investors direct, efficient access to Hong Kong and Mainland China’s rapidly developing ETF markets,” HKEx Chief Executive Nicolas Aguzin said in emailed comments.

The addition of ETFs marks the second expansion of China’s stock connect schemes in a week after its securities regulator on Dec. 17 said the Shanghai-London Stock Connect would be broadened to include Shenzhen-listed companies, as well as capital markets in Germany and Switzerland. read more

The scheme allows companies traded in Shanghai and London to list on each other’s bourses, by selling depository receipts.

Separately, China’s securities regulator proposed on Friday tightening rules governing Chinese companies listing abroad, which it said would improve oversight while allowing the practice to continue. nL1N2T90HO

Register now for FREE unlimited access to

Reporting by Beijing Newswroom Writing by Tom Daly Editing by Edmund Blair and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.