The first Luxembourg UCITS has received authorisation to use the Shanghai – Hong Kong Stock Connect programme.
The pilot programme provides trading access between the Hong Kong and Shanghai stock markets, and has seen a large amount of interest from Luxembourg companies looking to invest in A-Shares on the Shanghai exchange.
Camille Thommes, director general of the association of the Luxembourg fund industry, said: “Over the past years, the Chinese economy and financial markets have undergone a remarkable transformation and seen significant growth. More specifically, the Chinese equity market has grown to the second largest equity market in the world after the US.”
“The Shanghai – Hong Kong Stock Connect programme represents one of the biggest developments for foreign investors wishing to access this market. The program, launched on 17 November, enables foreign investors to trade Shanghai-listed shares via the Hong Kong stock exchange, and mainland investors to invest in Hong Kong shares via the Shanghai stock exchange.”
UCITS, management companies and depository banks appointed by the fund should insure that risk management procedures are adequate to support trades. They must also consider reducing counterparty risk as much as possible and completing specific disclosures to comply with requirements of local central services depositories, and Hong Kong and China-specific regulations.
