Cross-border ETF listing: sooner rather than later

The Chinese financial regulator said yesterday it is working on the launch of exchange-traded funds (ETFs) which tracks the Hong Kong stock index. They hope to speed up the cross-border listings once the technical issues involved are solved.

Tong Daochi, director-general for international affairs at China Securities Regulatory Commission (CSRC) said yesterday at the Financial Forum of the Expo 2010 in Shanghai that the authority hopes to complete the last mile in the preparation of the cross-bonder ETFs, which are based on the stocks listed in Hong Kong, as soon as possible.

However, some technical issues involving the products such as different suspension mechanism and markets opening hours between Hong Kong and China still need time to resolve.

To ensure the listing of the ETFs to be implemented smoothly, the related authority has actually done different tests on ETFs based on the stocks listed in Hong Kong. For example, earlier this year Shenzhen Stock Exchange (SSE) tested the trading procedures of Hang Seng Index Exchange Traded Fund (HSI ETF) which led the market to anticipate the cross-border listing of the HSI ETF would soon become reality in Shenzhen.

In addition, he said the regulator is also discussing to allow foreign companies to list on the Shanghai Stock Exchange.