Sino-Japan ETF Connect Launched; Six Cross-Border ETFs Approved

The announcement follows an ETF Connectivity Agreement signed by JPX and the SSE last month, where both agreed to establish an system for cross-listings of ETFs.

The CSRC (China Securities Regulatory Commission) has announced the launch of a cross border investment scheme linking China and Japan’s markets through ETFs.

The announcement follows an ETF Connectivity Agreement signed by JPX (Japan Exchange Group) and the SSE (Shanghai Stock Exchange) last month, where both agreed to establish an system for cross-listings of ETFs.

According to a CSRC statement, under the east-bound leg of the Sino-Japan ETF Connect, Chinese fund managers can set up Shanghai-traded ETFs that invest (through the QDII scheme) at least 90% of assets in Japan ETFs that track Japanese stock indexes.

According to Caixin, four such cross-border ETFs have been approved by the CSRC.¬†China Southern Asset Management’s fund will invest in a Japanese ETF that tracks the Tokyo Stock Price Index, which covers more than 2,000 TSE stocks. HuaAn Fund Management, E Fund Management and China Asset Management each will have funds that invest in Japanese ETFs that track the Nikkei 225.

Likewise, the west-bound leg of the programme will see Japan managed ETFs buy shares (through the QFII scheme) in Chinese ETFs that invest in Chinese stock indexes.

The TSE (Tokyo Stock Exchange) has approved two such ETFs, due to be listed on 25 June. One is managed by Mitsubishi UFJ Kokusai Asset Management, and will buy shares in a Chinese ETF that invests in the SSE 180 Index. The other is managed by Asset Management One, and will buy shares in a Chinese ETF that invests in the CSI 500 Index.

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