Hong Kong Exchanges and Clearing (HKEX) has collaborated with Euroclear Bank to enhance the distribution of European exchange-traded funds (ETFs) in Asia.
HKEX has become the first stock exchange in Asia to adopt the international central securities depository (ICSD) ETF settlement model in Euroclear Bank.
European ETF issuers will now be able to expand their distribution network to Asia and grow ETF liquidity.
According to Euroclear, its international structure for ETFs will bring increased efficiency to a process that had previously only been supported by fragmented domestic market practices across Europe.
Investors will benefit from improved settlement efficiencies and a reduction of costs and risks.
Brian Roberts, head of exchange traded products at HKEX, said: “We are excited to introduce the ICSD settlement model for the ETF industry in Hong Kong. The ICSD link, which is proven effective in narrowing spreads and driving liquidity, will reinforce Hong Kong’s position as Asia’s
ETF marketplace.”
Mohamed Rabti, deputy head of FundsPlace, Euroclear, commented: “We welcome this collaboration with Hong Kong exchanges and clearing and are extremely pleased to be the first ICSD to extend an efficient global distribution of international ETFs.”
He added: “This partnership further underpins Euroclear’s wider Asia strategy which spans nearly 30 years in the region.”
