The Hong Kong Stock Exchange welcomes mainland insurance funds to invest in Hong Kong ETFs through the Shanghai and Shenzhen-Hong Kong Stock Connect.

On August 18, the HKEX welcomed the announcement from the National Financial Regulatory Administration supporting the active participation of mainland insurance funds in the financial market connectivity between the mainland and Hong Kong, allowing mainland insurance institutions to invest in Hong Kong exchange-traded funds (ETFs) through the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect. HKEX Group CEO Charles Li expressed, "We sincerely thank the National Financial Regulatory Administration for its strong support of the connectivity mechanism and the Hong Kong financial market. This new initiative not only facilitates cross-border diversified asset allocation for mainland insurance institutions, but also significantly enhances the liquidity of the Hong Kong ETF market, further increasing the attractiveness of the Stock Connect and solidifying Hong Kong's position as an international financial center. We warmly welcome mainland insurance institutions to fully utilize the rich and diverse products and risk management tools available in Hong Kongs international capital market to optimize their asset allocation structure and improve investment returns." Since the inclusion of ETFs in the Stock Connect in 2022, both southbound and northbound ETF trading have become increasingly active. From January to July this year, the average daily trading volume of southbound ETFs and northbound ETFs through the Stock Connect amounted to approximately HKD 5.8 billion and RMB 5.1 billion, respectively, representing year-on-year increases of 61% and 86%. The active trading of ETFs under the Hong Kong Stock Connect has also contributed to the prosperity of the Hong Kong ETF market, which saw an average daily trading volume of HKD 40.6 billion from January to July this year, up 22% year-on-year.