Thu, Jul 30, 2009 - Page 11 News List

HSBC Holdings wins approval to list ETFs on Taiwan exchange

By Tim Culpan  /  BLOOMBERG

HSBC Holdings Plc won approval in Taiwan to list two exchange-traded funds (ETFs) based on Hong Kong’s Hang Seng Index and Hang Seng H-Share Index, the Financial Supervisory Commission said in a statement on its Web site yesterday.

HSBC can sell the ETFs and collect money domestically, though it needs the approval of the Taiwan Stock Exchange Corp (台灣證交所) before the funds can be listed on the local bourse, the Financial Supervisory Commission said.

The financial regulator on May 22 signed a memorandum of understanding with Hong Kong’s Securities and Futures Commission (SFC) to allow such cross-listing of exchange-traded funds.

On July 21, the FSC approved the listing of the first Hong Kong ETFs based on the CSI 300 Index on the Taiwan Stock Exchange, paving the way for domestic investors to buy funds linked to Chinese shares.

On the same day, Hong Kong’s SFC said final authorization for the listing of the first Taiwan ETF, the Polaris Taiwan Top 50 Tracker Fund, on the city’s exchange would be issued soon.

Taiwan and China are poised to sign agreements allowing investment in each other’s banking, insurance and securities industries, after cementing a broad framework for cooperation on April 26 in the third round of cross-strait talks.

ETFs are gaining popularity among investors because they are cheaper and easier to trade than similar mutual funds. The index-based products enable investors to buy or sell shares in portfolios of stock through a single security.

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