HKEX Plans Introduction of New Exchange Traded Products – Report

Under consideration are leveraged and inverse ETPs tracking A share indexes, fixed-income ETFs, sectoral and thematic ETFs backed by Chinese assets, and ESG themed ETPs.

HKEX (Hong Kong Exchanges and Clearing) is considering introducing a set of new exchange-traded products (ETPs), another move to further bolster its product ecosystem, Bloomberg reports.

Four new types of ETPs are said to be under consideration, including leveraged and inverse products that track mainland China A share indexes, fixed-income ETFs, sectoral and thematic ETFs with underlying Chinese assets, and ETPs with an ESG investing strategy.

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According to HKEX head of exchange-traded products Brian Roberts, products tracking mainland indexes will be the “next source of innovation and diversification”, and the¬†recent rise in investor interest in fixed-income ETFs seen in the US will “come to Asia”.

Broadening its suite of products was part of HKEX’s three year strategic plan, published earlier this year.

On Monday (1 June), a new spread table and continuous quoting market making obligations for ETPs came into effect, reforms that will reduce tick sizes and minimum achievable spreads, and create a more competitive liquidity providing environment for Hong Kong-listed ETPs.

Meanwhile, the Hong Kong government has recently passed an amendment waiving the stamp duty on stock transfers for ETP market makers in the course of creating and redeeming ETP units – a liquidity-enhancing change that will take effect from 1 August.

Last week, HKEX announced a ten-year licensing agreement with MSCI Inc that will pave the way for the introduction of 37 new Asia and emerging markets futures and options contracts in Hong Kong.

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