Hong Kong Exchanges and Clearing Limited (HKEX) has expressed its support for the National Financial Regulatory Administration's recent announcement to encourage mainland insurance funds to take part in the financial market connectivity between the mainland and Hong Kong. This new policy permits mainland insurance institutions to invest in Hong Kong-listed exchange-traded funds (ETFs) through the Shanghai-Shenzhen-Hong Kong Stock Connect scheme.

Bonnie Chan, Chief Executive Officer of HKEX, extended her gratitude to the regulator for its staunch backing of the Stock Connect mechanism and Hong Kong's financial market. She noted that this initiative not only simplifies the process of cross-border diversified asset allocation for mainland insurers but is also poised to substantially enhance the liquidity of Hong Kong's ETF market, thereby increasing the appeal of the Stock Connect programs and cementing Hong Kong's position as a leading international financial hub. HKEX warmly welcomes mainland insurance institutions to leverage the vast and varied product offerings and risk management tools available in Hong Kong's international capital market to refine their asset allocation strategies and boost investment returns.

Since ETFs were integrated into the Stock Connect in 2022, trading activity has grown steadily on both the southbound and northbound channels. From January to July this year, the average daily turnover for southbound and northbound ETFs reached roughly HK$5.8 billion and RMB 5.1 billion, respectively, marking year-on-year increases of 61% and 86%. The robust trading of ETFs under the Southbound Stock Connect has also fueled the prosperity of Hong Kong's broader ETF market, with the average daily turnover hitting HK$40.6 billion in the first seven months of this year, up 22% from the same period last year.