China-Japan Capital Markets Forum Held in Shanghai

22 Apr 2019

The China-Japan Capital Markets Forum, co-organized by the Shanghai Stock Exchange (SSE), the Shenzhen Stock Exchange (SZSE), the Securities Association of China (SAC), the Asset Management Association of China (AMAC), Japan Exchange Group, Inc. (JPX), the Japan Securities Dealers Association (JSDA) and the Investment Trusts Association, Japan (JITA), is held in Shanghai on April 22, 2019. Yi Huiman, Chairman of the China Securities Regulatory Commission (CSRC), opened the Forum with a live speech via video link. Toshihide Endo, Commissioner of the Financial Services Agency (Japan), Fang Xinghai, Vice Chairman of the CSRC, Wu Qing, Vice Mayor of Shanghai, Mitsuhiro Hasegawa, Chairman of the Securities and Exchange Surveillance Commission (SESC), Huang Hongyuan, Chairman of the SSE, and Akira Kiyota, Group CEO of JPX attended the forum and delivered speeches.

The forum aims at propelling exchanges and cooperation between the Chinese and Japanese capital markets. The two sides had multiple panel discussions on the innovation-driven strategy and the role of capital markets, the ETF connectivity, the innovation and opportunities in the securities industry, and the comparison of the fund management markets and relevant systems. About 250 representatives from the Chinese and Japanese capital markets attended the forum.

Witnessed by all the guests, the SSE and JPX signed the ETF connectivity agreement, agreeing that they will establish the ETF connectivity mechanism for the markets in China and Japan, and that each exchange will list ETFs tracking the ETFs listed on the other market. Specifically, the Chinese and Japanese ETF providers will respectively establish cross-border ETFs through the existing QDII and QFII mechanisms, and invest all the fund assets or most of them in the representative ETFs listed in the other market.

The SSE and JPX have kept good relations over the years. The ETF connectivity is a cooperation chosen by the two exchanges upon seriously studying the features of the two markets and fully considering the need of cross-border investments. Through the ETF connectivity, investors can invest in the mainstream ETF products on the counterpart market through the domestic fund products, which realizes the two-way cross-border investment at low costs. It will contribute to expanding a new space and accumulating new experience for further collaboration of the capital markets as well as of the securities and asset management industries in the two countries.

Fueling the SSE-JPX ETF connectivity will further spur the cooperation potential of the Chinese and Japanese capital markets, accelerate the two-way opening-up of the Chinese capital market and the construction of the Shanghai International Financial Center, and boost the long-term and sound growth of the capital markets in the two countries. The SSE and JPX announce that they will work together for the next steps according to the arrangements made by the CSRC and the JFSA.