The Hong Kong stock exchange has adopted a simplified structure offered by Euroclear Bank for the trading of European exchange-traded funds (ETFs).
Hong Kong Exchanges and Clearing Limited (HKEX) has collaborated with Brussels-based Euroclear Bank to enhance ETF distribution and the move could see European ETF issuers able to expand their distribution network throughout the region.
HKEX is the first Asian stock exchange to adopt Euroclear Bank’s international central securities depository (ICSD) ETF settlement model.
By using an ICSD as the sole place of settlement for ETFs with multiple market listings, then complexity, cost and risks involved in ETF issuance and trading are “significantly” reduced, the bank said.
According to Brian Roberts, HKEX’s head of ETFs, the ICSD link “will reinforce Hong Kong’s position as Asia’s ETF marketplace”.
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