HKEX Stock Connect Eligible ETFs

On Apr. 19, HKEX, SSE, SZSE expanded the scope of eligible ETFs.

  • HKEX, SSE, SZSE announced agreement to expand scope of eligible ETFs under Stock Connect; criteria for ETFs for northbound and southbound trading will be relaxed.
  • Aims to support continued development of mutual market access program, enrich investment options, and enable efficient asset allocation between two markets.
  • It is estimated that implementation of these measures will take around three months.
  • Follows CHI CSRC Apr. 2024 announced cooperation measures with HK, see #209062.
  • ETF Criteria
  • The expansion will not require changes to the Orion trading platform – China Stock Connect; current trading and settlement arrangements will remain unchanged.
  • China Connect exchange participants and trade-through exchange participants need to evaluate if they require any system/operational changes in preparation for expansion.
  • Required AUM for northbound trading eligibility criteria is reduced to RMB 500mn; for southbound trading, the required AUM is reduced from HKD 1.7bn to HKD 550mn.
  • Lowered minimum SSE/SZSE A-share weighting in benchmark index from 90% to 60%.
  • Adjust thresholds for both northbound, southbound trading which designate certain ETFs as sell-only based on revised AUM and benchmark index weighting criteria.
  • Jun. 2024 Effectiveness
  • On Jun. 14, 2024, HKEX, SZSE said expansion of eligible ETFs under Stock Connect will take effect Jul. 22, 2024; updated list of eligible ETFs to be announced separately.
  • This expansion aims to increase investment choices for Stock Connect investors, allowing them to diversify assets across HK, Mainland China markets efficiently.
  • Data cut-off date for determining eligibility of ETFs for Southbound trading is Jun. 17.
  • Jul. 2024 Eligible ETFs
  • On Jul. 12, 2024, HKEX Stock Exchange of Hong Kong and Hong Kong Securities Clearing Company said 59 ETFs listed on SSE and 26 ETFs listed on SZSE will be added to the list of China Connect securities eligible for buy and sell, following the expansion.
  • On the same day, HK SFC approved amendments to the Rules of the exchange for the purpose of the expansion of the scope of eligible ETFs under Stock Connect.

Regulators HKEX; SSE; SZSE
Entity Types B/D; Exch; IA; Inv Co
Reference Cir CD/OES/CCASS/029/2024, CT/102/24, LSD/051/2024, 7/12/2024; PR, Cir CT/076/24, RN SZSE No. 462 (2024), 6/14/2024; PR, Cir CT/042/24, 4/19/2024
Functions Compliance; Financial; Operations; Product Administration; Trading
Countries China; Hong Kong; Cross-Border
Products Clearing; ETFs; Fund Mgt; Securities
Regions AP
Rule Type Final
Rule Date 4/19/2024
Effective Date 7/22/2024
Rule Id 209076
Linked to Rule :209062
Reg. Last Update 7/12/2024
Report Section International

Last substantive update on 07/16/2024