China-Japan ETF Connectivity

On April 22, 2019, Shanghai Stock Exchange (SSE) and Japan Exchange Group (JPX) agreed to establish China-Japan ETF Connectivity. Aimed at creating more opportunities for cross-border securities investment between China and Japan, the scheme enables listing of feeder ETFs of ETFs investing in Chinese or Japanese assets.

Along with QFII/RQFII and QDII investment quotas specially allocated for the scheme, ETFs listed based on China-Japan ETF Connectivity will create a link between the ETF markets of both exchanges.

Through this scheme, investors in Japan will be able to indirectly invest in Chinese assets through feeder ETFs of SSE-listed ETFs listed on Tokyo Stock Exchange (TSE). Similarly, feeder ETFs of TSE-listed ETFs in Shanghai will allow Chinese investors to indirectly invest in Japan.

On June 25, 2019, the SSE and JPX held the launch ceremonies for the China-Japan ETF Connectivity respectively, with four SSE-JPX ETF Connectivity products successfully listed on the SSE.

 

25 June, 2019 New Progress Made in Two-way Opening with Successful Launch of SSE-JPX ETF Connectivity Scheme

22 April, 2019 China-Japan Capital Markets Forum Held in Shanghai

Framework

An ETF feeder scheme for creating an ETF (feeder) that invests in a target ETF whose trust assets are Chinese or Japanese asset classes* based on additional QFII/RQFII or QDII quota specially created for this scheme.

The scheme aims to increase opportunities for Chinese and Japanese investors to invest in Japanese and Chinese asset classes by linking ETFs listed on the two exchange markets.

* An ETF of which at least 90% of AUM is invested in a target ETF listed on the other exchange market based on agreement between the ETF providers. For the time being, the scheme is only limited to ETFs that track stock price indices. The target ETF should have been listed for more than 1 year and has enough liquidity.

ETFs Listed

Under this scheme, Chinese and Japanese ETF providers can create feeder ETFs to invest in Japanese or Chinese asset classes. Such feeder ETFs invest mainly in the counterpart ETF provider's fund based on a special investment quota for the scheme* obtained from China's State Administration of Foreign Exchange (SAFE).

ETFs listed at SSE under this scheme are listed below.


*An investment quota for a Qualified Foreign Institutional Investor (QFII) or Qualified Domestic Institutional Investor (QDII). ETF providers using this scheme may be granted investment quotas in a shorter period of time.


Index Code Fund Name Management Company
Nikkei 225 513000 E Fund Nikko NKY ETF E Fund Management
Nikkei 225 513520 ChinaAMC Nomura NKY ETF China Asset Management
Nikkei 225 513880 HuaAn MAXIS NKY ETF HuaAn Fund Management
TOPIX 513800 China Southern TOPIX ETF China Southern Asset Management

To view ETFs listed at TSE under this scheme, please visit:

https://www.jpx.co.jp/english/equities/products/etfs/etf-connectivity/01.html