BNP Paribas Securities Services has been selected the custodian and administrator for Nikko Asset Management’s first passive exchange traded fund (ETF) domiciled in Hong Kong.
The mandate will include middle-office, custody, trustee, transfer agency and fund administration services to support the issue of the Nikko AM Global Internet ETF, which is designed to offer local investors exposure to tech stocks.
It is also an expansion on BNP Paribas’ existing partnership with Nikko Asset Management, allowing the Japanese-based firm to operate a single model across its full fund range.
“ETFs are changing the way investors manage their portfolios and BNP Paribas is helping asset managers to expand their product ranges. This is another milestone in the long standing and valued partnership between Nikko Asset Management and BNP Paribas Securities Services in the region,” said Julien Kasparian, head of BNP Paribas Securities Services Hong Kong.
The French global custodian added as part of its strategy to grow custodian solutions for passive investment management strategies, it has leveraged ETF expertise in other territories across the world to support Hong Kong ETF asset servicing.
The ETF market in Hong Kong has become a key strategic priority for many global custodians with business in Asia. Ambitions of an ‘ETF Connect’ that will offer Hong-Kong listed ETFs to Chinese investors could provide a significant boost for asset servicers in the region to facilitate China access.
In May, Euroclear and Hong Kong Exchanges and Clearing (HKEX) partnered to enhance distribution of European-domiciled ETFs in Asia, whereby HKEX would become the first Asian stock exchange to adopt the international central securities depository (ICSD) model. This allows trades to be settled in one central location rather than in multiple depositories in different markets.