THE Monetary Authority of Singapore (MAS) and China Securities Regulatory Commission (CSRC) are looking to explore exchange-traded fund (ETF) product links on both the Singapore Exchange (SGX) and Shanghai Stock Exchange.

Last Friday (May 19), the two exchanges signed a memorandum of understanding (MOU) to establish an ETF product link, which will allow eligible fund managers to offer ETF products to investors on both bourses. 

This follows a similar move between SGX and the Shenzhen Stock Exchange, with participating products launched in December 2022. At the time, two Singapore-Shenzhen cross-listed ETFs were listed concurrently on both exchanges, garnering combined assets under management of over S$270 million. 

Demand for China and Singapore equities ETFs in Singapore remains strong, with a combined asset under management of S$2.9 billion as at this April, said SGX in a separate release on Monday,

The growing demand for China equities ETFs in particular can be seen from how the daily turnover for China equities ETFs in the first quarter of 2023 grew more than 50 per cent following the launch of the CSOP CSI Star and ChiNext 50 Index ETF and UOBAM Ping An ChiNext ETF, SGX added.

“We are pleased to forge closer ties with SSE and explore new areas of cooperation,” said Loh Boon Chye, SGX’s chief executive. “We recognise that by leveraging the unique propositions of both markets, we can unlock the potential of more exciting opportunities for investors.”

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Cai Jianchun, SSE’s president, said the signing of the MOU will enable SSE and SGX to continue to promote cross border cooperation between China and Singapore and “develop more connectivity products in selected ETFs to meet the growing demand for cross-border opportunities between both markets”.

The MOU came on the sidelines of an annual roundtable held on Friday between MAS and CSRC. Both parties exchanged views on supervisory approaches and discussed initiatives to deepen the connection between capital markets of Singapore and China.

They also discussed China’s initial public offering registrations system and capital markets structural reform; Singapore’s supervisory approach for fund management and investor protection; and derivatives market regulation. 

The roundtable was co-chaired by MAS deputy managing director of financial supervision Ho Hern Shin and CSRC’s vice-chairman Fang Xinghai.