Expert expects more fund types after landmark ETFs in HK

An expert in investment funds expects a broader spectrum of investment products to be eventually approved by Hong Kong’s regulator following the success of the first futures-based ETFs to be listed in the city.

Rolfe Hayden, who led Simmons & Simmons’ team in the transaction, told China Business Law Journal that he expects more interesting investment schemes to be approved by the Securities and Futures Commission (SFC). Hong Kong’s bourse has the fifth largest turnover for ETFs globally and the third largest in Asia – only the US, Shanghai and Tokyo are ahead. In January, turnover in ETFs on the Hong Kong market was US$32,020 million, 22% of Asia’s total. Hayden believes futures-based ETFs products can increase this market share.

“I know there are a number of new ETFs which will be listed. I think the market is hoping that short and leveraged ETFs will be allowed. But that is subject to the SFC’s approval,” said Hayden.

Hayden’s team advised Samsung Asset Management in Hong Kong, which is Korea’s pioneer of futures-based ETFs, in the first-ever futures-based ETFs – KODEX HSI Futures ETF and KODEX HSI Futures RMB FX ETF – to be listed in the SAR.