Euroclear Bank has collaborated with GF
International Asset Management, the UK subsidiary of the
Chinese asset manager of GF Fund Management, to launch an
international exchange traded fund (ETF), the GF
International-FTSE China A UCITS ETF.
The ETF is the first fund product to be
launched by a Europe-based Chinese asset manager, giving
investors access to large and mid-cap equities on the Shanghai
and Shenzhen stock exchanges in China via the Renminbi
Qualified Foreign Institutional Investor (RQFII) scheme.
"The Chinese asset manager will be able to
distribute their product in Europe themselves, through their
presence in Europe, without having to rely on a European
third-party provider," said a spokesperson for Euroclear. "It
will allow European investors to invest in Chinese equities
from their home market."
The fund will mainly target institutional
and retail investors, according to Euroclear.
The ETF, which uses
Euroclear’s international issuance structure, is
domiciled within the Luxembourg jurisdiction. It is listed and
traded in USD on the London Stock Exchange, and settled
directly in Euroclear’s ICSD service.
The ICSD will also allow GF International
the flexibility to clear and settle in renminbi, for any
possible renminbi ETF listing in future.
The ETF tracks the FTSE China A index, a
well-diversified market capitalisation-weighted index offered
by FTSE Russell.
"We selected Euroclear’s ICSD
service for our first ETF in Europe for its renminbi settlement
and clearing capabilities and to maximise post-trade
efficiency," said Miller Guo, CEO of GF International Asset
"GF International is responsible for both
the ETC’s investment management and distribution,
where other Chinese ETFs listed in Europe are distributed via
third parties or joint-venture products."
Tim Howell stepped down as chief executive
of Euroclear after six years at the post-trade giant,
Global Investor reported in October 2016. In a
statement at the time, the company revealed that in addition to
implementing the Central Securities Depositaries Regulation
(CSDR), Euroclear’s priorities include the
expansion of fund services in emerging markets and improving
the issuance and settlement of ETFs.