The Shanghai Stock Exchange and Japan Exchange Group inked an Exchange Traded Fund connectivity scheme on Monday which would allow Chinese to invest in ETF listed on the JPX and vice versa.
As part of the scheme, Nomura Asset Management has joined hands with China Asset Management, a large ETF management company in China, to further develop capital markets in Japan and China by enhancing opportunities for investment in both countries.
Asset managers participating in the scheme will set up specific cross-border funds under China’s Qualified Domestic Institutional Investor and Qualified Foreign Institutional Investor schemes for implementation of the new connectivity plan.
Yi Huiman, head of Chinese securities regulator, said the JPX-SSE ETF connectivity scheme enriches China’s public funds, and will provide an easier channel for investors of both countries to access each other’s capital markets.
Japan needs Chinese capital market for higher returns, while China needs more long-term funds, Yi added.