The Association of the Luxembourg Fund Industry said the first Luxembourg UCITS has been given the go-ahead to invest into China’s A-shares through the cross-border stock trading scheme between Hong Kong and Shanghai.
“Over the past years, the Chinese economy and financial markets have undergone a remarkable transformation, more specifically, the Chinese equity market has grown to be the second largest equity market in the world after the US,” Camille Thommes, Director General of the association said.
“The Shanghai – Hong Kong Stock Connect program therefore represents one of the biggest developments for foreign investors wishing to access this market,” she said.
The program, launched on November17, enables foreign investors to trade Shanghai-listed shares via the Hong Kong stock exchange, and mainland investors to invest in Hong Kong shares via the Shanghai stock exchange.
A number of Luxembourg UCITS have sent their applications to the supervisory authority and the first one has now been approved.
There are a number of factors, which require careful consideration and appropriate solutions for those Luxembourg UCITs considering accessing this market through the Shanghai Hong Kong Stock Connect, the association said.
The Luxembourg UCITS, its management company, and the depositary bank appointed by the fund must give due consideration to a number of factors and ensure that their risk management procedures adequately cover them.
