Banks Launch First International Chinese ETF

Euroclear, Commerzbank and the China Construction Bank have collaborated to launch the first ever Remninbi (RMB)-denominated money market exchange traded fund (ETF), with HSBC Securities Services acting as the custodian and asset services provider.
By Joe Parsons(2147488729)
Euroclear, Commerzbank and the China Construction Bank have collaborated to launch the first ever Remninbi (RMB)-denominated money market exchange traded fund (ETF), with HSBC Securities Services acting as the custodian and asset services provider.

The “Commerzbank CCBI RQFII Money Market UCITS ETF”, which invests in Chinese money market instruments, will be listed on the London Stock Exchange in RMB, GBP and EUR, and settled directly by Euroclear.

“This pioneering move will help to develop the Renminbi asset management industry in the U.K. and build investment links with China,” says Cian Burke, global head, HSBC Securities Services.

HSBC says it will provide a range of securities services to the ETF, including global custody, China sub-custody and clearing, UK depositary, fund administration and transfer agency.

The launch of the ETF significantly not only boosts the U.K.’s link with the Chinese market, but also boosts its intentions in becoming the next big fund domicile for international investors.

“The launch of the first UK domiciled ETF shows that with the right tax and regulatory environment, the UK has become an attractive and competitive fund domicile,” says Daniel Godfrey, chief executive, The Investment Association.

Euroclear and CCB International Asset Management (CCBIAM) have also combined their efforts to launch RMB settlement, laying the foundations for future RMB-denominated ETFs to develop in the European market.

“Extending RMB issuance in Europe is a natural fit for us and showcases the value of our international platform as well as our global client base. An international ETF model such as this supports our clients’ quest for greater portfolio diversification possibilities and investment choices,” adds Stephan Pouyat, global head of Capital Markets, Euroclear.

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