Hong Kong and UAE strengthen financial ties with ETF and fund accords
Strengthened collaboration reflects growing participation by Middle Eastern funds as cornerstone investors in recent Hong Kong IPOs
Hong Kong is boosting financial ties with the Middle East by signing initial accords with the United Arab Emirates (UAE) to enable mutual recognition of funds and cross-listings of exchange-traded funds (ETFs) on the Abu Dhabi Securities Exchange.
Hong Kong’s market regulator, the Securities and Futures Commission (SFC), and the UAE’s Securities and Commodities Authority signed a memorandum of understanding on Wednesday to facilitate the mutual recognition of funds.
This would allow public investment products to be distributed seamlessly in both markets, marking Hong Kong’s first such arrangement with a Middle Eastern market and the UAE’s first outside its region.
Julie Leung Fung-yee, CEO at the SFC, said the latest regulatory cooperation opened a new chapter, “not only reaffirming the city’s standing as a preferred fund domicile, but also highlighting its role as a premier gateway between mainland China and the Middle East, especially in a fast-evolving global landscape”.
The SFC has previously entered into mutual recognition arrangements with mainland China and ten other overseas financial regulators, including Ireland in May this year.
In a parallel development, bourse operator Hong Kong Exchanges and Clearing (HKEX) signed a separate agreement with ADX to explore initiatives such as cross-listings of ETFs, companies, and environment, social, and governance-related (ESG) products.