Japan Exchange Group (JPX) and Shanghai Stock Exchange China have signed an agreement to facilitate cross-listing of ETFs.
Under the agreement, a firm in one of these countries would create a feeder ETF that primarily invests in an ETF listed in the other jurisdiction.
All ETF providers would have to secure quotas under China’s Qualified Foreign Institutional Investor or Qualified Domestic Institutional Investor programmes.
JPX Group CEO Akira Kiyota said: “This scheme is the result of our negotiations with SSE and the Chinese and Japanese authorities as well as market participants.
“We will continue to collaborate with SSE on this scheme and other ways to increase cross-border investment flows between China and Japan as we contribute to the continued development of the capital markets of both our countries.”
A timeline on when the ETF link will commence operations has not been revealed.
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Nomura Asset Management (NAM) has joined forces with China Asset Management to participate in the programme.
Nomura said: “The two companies aim to further develop the capital markets in Japan and China by enhancing opportunities for investment in both countries.
“Through its NEXT FUNDS range of ETFs and participation inthescheme, NAM will continue working to provide clients with a wide range of investment opportunities as well ascontribute to the development of theETF market.”