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On the occasion of the 25th anniversary of Hong Kong's return to the motherland, exchange-traded funds (ETFs) were included in the mainland-Hong Kong stock connect programs (hereafter referred to as the Stock Connect) today. The Shanghai Stock Exchange (SSE), the Shenzhen Stock Exchange (SZSE), Hong Kong Exchanges and Clearing Limited (HKEX), and China Securities Depository and Clearing Corporation (CSDC) held a launching ceremony for the inclusion of ETFs into Stock Connect for celebration.
At the launching ceremony, SSE President Cai Jianchun said that under the coordination and arrangement of the China Securities Regulatory Commission (CSRC) and the Securities and Futures Commission (SFC), ETFs were successfully included in Stock Connect. It is another significant move of in-depth cooperation between the capital markets in the Chinese mainland and Hong Kong to advance opening-up to a higher level since the launch of Stock Connect. It will facilitate mutual investment for both domestic and overseas investors, make the SSE more internationalized, and provide a new opportunity for the high-quality development of the SSE's ETF market. It will also help asset managers and securities companies of the Chinese mainland and Hong Kong further improve their management and service, and consolidate and elevate the status of Shanghai and Hong Kong as international financial centers.
SZSE President Sha Yan said that under the guidance of the CSRC and the SFC, by the inclusion of ETFs into Stock Connect, SZSE, SSE, HKEX and CSDC have made new steps in serving the two-way institutional opening-up of the capital market. It is a critical measure to implement the national strategy of opening-up and support Hong Kong in consolidating and elevating its status as an international financial center. It is also another landmark achievement in upgrading the Stock Connect mechanism and better serving the construction of the Guangdong-Hong Kong-Macao Greater Bay Area, which is conducive to enriching cross-border investment products, providing more convenience and opportunities for domestic and overseas investors, and promoting the sustainable, steady and sound development of the capital markets in both the Chinese mainland and Hong Kong.
HKEX Chief Executive Officer, Nicolas Aguzin, said the inclusion of ETFs in Stock Connect will help enhance the vibrancy, diversity and liquidity of markets. International investors will have opportunities to invest in the Chinese mainland's ETF market, and the Chinese mainland investors will have more opportunities to realize diversified asset allocation with ETFs, an efficient, transparent, and flexible investment tool.
CSDC General Manager Kong Qingwen said that in 2020, the CSDC unified the settlement modes for ETFs of the SSE and the SZSE, which laid a solid foundation for the inclusion of ETFs in Stock Connect. Under the coordination and arrangement of the CSRC and the SFC, and thanks to the close collaboration and concerted efforts of all parties, ETFs are now successfully included in Stock Connect, embracing a new chapter for the Stock Connect mechanism.
Next, with the expansion of trading and the increase of eligible product varieties within the Stock Connect mechanism, the SSE, under the coordination and guidance of the CSRC and the SFC, will continuously study and optimize Stock Connect and other mechanisms, enhance the close cooperation and communication between Shanghai and Hong Kong, actively build a market environment conducive to the medium- and long-term investment, and promote in-depth cooperation and coordinated development with the Hong Kong market.
