The National Financial Regulatory Administration (NFRA) today announced that it will actively support Mainland insurance funds to participate in mutual access schemes between the Mainland and Hong Kong financial markets. The move will allow Mainland insurance institutions to invest in exchange-traded funds (ETFs) in Hong Kong through Stock Connect.

Secretary for Financial Services & the Treasury Christopher Hui, alongside the Executive Director of Investment Products of the Securities & Futures Commission Elisa Ng and the Chief Executive Officer of Hong Kong Exchanges & Clearing Limited Bonnie Chan, visited the NFRA today and met with its Vice Minister Xiao Yuanqi to discuss measures to further promote the co-ordinated development of the Mainland and Hong Kong capital markets.

Under the newly announced measures, Mainland insurance funds will be allowed to invest in ETFs included under the Southbound trading of Stock Connect. The Hong Kong Special Administrative Region Government warmly welcomed the measure.

Chief Executive John Lee expressed his sincere gratitude to the Central People's Government and the NFRA for their support.

“The National 15th Five-Year Plan clearly supports Hong Kong in consolidating and enhancing its status as an international financial centre, strengthening its role as a global offshore renminbi business hub, an international asset and wealth management centre, and an international risk management centre,” Mr Lee said.

“Building on the mature experience of Mainland insurance funds investing in Hong Kong's stock market through Stock Connect, the policy measures announced further facilitate Mainland insurance companies in diversifying their asset allocation via Hong Kong, while promoting the development of the local ETF market and strengthening its ecosystem. The measures represent the strong support of our country for the development of Hong Kong's capital market and asset management industry, and are of profound significance.”

Mr Lee emphasised that the Hong Kong SAR Government will continue to leverage Hong Kong's unique advantage of being closely connected with the Mainland and the world under the “one country, two systems” principle, further enhancing the mutual access mechanism and working closely with Mainland regulators to deepen market co-operation.

“The Government is pressing ahead at full speed with the formulation of Hong Kong's First Five-Year Plan, and will spare no effort in taking forward the preparatory work to seize the opportunities presented by our country's development, serve our country's high-level financial opening up, and better integrate into and contribute to the overall national development,” he added.

Financial Secretary Paul Chan said that enabling Mainland insurance funds to invest in ETFs in Hong Kong through Stock Connect is a win-win initiative with benefits on multiple fronts.

“It not only provides Mainland insurance companies with broader and more diversified investment channels, but also drives the development of the market of exchange-traded products in Hong Kong, further deepening the connectivity and concerted development of the two capital markets.” Mr Chan said.

“We will continue to join hands with the financial regulators and market stakeholders to expand and enhance the competitiveness of this market, opening up more new channels for asset allocation and new investment opportunities for investors from both the Mainland and overseas,” he added.