The Securities and Futures Commission (SFC) has today approved the launch of an A shares index futures contract by the Hong Kong Exchanges and Clearing Limited (HKEX).
Since the launch of the Mainland and Hong Kong Stock Connect (Stock Connect) in 2014, international investors have increasingly participated in the A shares market via the northbound trading link.
"This A shares index futures contract provides a significant new risk management tool for the growing number of global investors who participate in China’s A shares market, including those trading through Hong Kong’s Stock Connect mechanism. The ability to trade A shares futures in Hong Kong, and to hedge pricing risks effectively, is expected to facilitate the further growth of long term capital flows into the Mainland financial markets," the SFC’s Chief Executive Officer, Mr Ashley Alder said.
"The new contract is a major milestone in the development of Hong Kong’s capital markets, strengthening its position as a financial risk management and China market access centre of international significance," he added.
HKEX will inform the market of the contract details and the launch date shortly.
Pursuant to the “Memorandum of Understanding on Supervisory and Enforcement Cooperation on Matters concerning Futures” signed in 2017, the China Securities Regulatory Commission and the SFC have established close regulatory cooperation arrangements on cross-boundary derivatives, including supervisory information sharing and enforcement assistance (Note 1).
The arrangements will help maintain market integrity and enable the two regulators to better assess and facilitate the long-term development of the A shares index futures contract.
Note:
- Please see the SFC's press release dated 29 December 2017.