Mainland-Hong Kong capital market ties to benefit from new measures

Hong Kong’s Securities and Futures Commission (SFC) and the China Securities Regulatory Commission (CSRC) have unveiled a comprehensive package of measures designed to strengthen mainland-Hong Kong capital market ties. The framework, announced on Monday, targets a broad spectrum of financial activities, including enhanced fundraising, index cooperation, and the promotion of green finance.

Central to the new agreement is a continued commitment to support cross-border listings, Hong Kong’s Standard newspaper reports. Regulators will facilitate mainland enterprises raising capital through share sales in Hong Kong, while providing reciprocal support for Hong Kong-listed firms seeking to list on the mainland. Furthermore, the initiative seeks to advance two-way direct financing by enabling Hong Kong enterprises to issue bonds across the border.

Mainland-Hong Kong capital market ties: risk, ETFs and sustainability

In their bid to deepen mainland-Hong Kong capital market ties, the regulators are also prioritising offshore risk management and the internationalisation of the yuan. This includes bolstering futures market links and supporting the launch of a wider range of yuan-denominated and settled futures products in Hong Kong.

To support the growth of passive investment, the authorities are encouraging the introduction of exchange-traded funds (ETFs) focused on “China’s modern industrial system.” This will be supported by a new fast-track registration mechanism for conventional equity ETFs and efforts by index providers to create more benchmarks based on Chinese assets, the Standard says.

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Sustainability is another key focus, with the SFC and CSRC planning pilot programmes for listed companies in both jurisdictions to disclose climate-related transition plans. Alongside these developments, the regulators pledged to strengthen risk monitoring through enhanced information-sharing mechanisms and tighter supervision of cross-border intermediaries.

According to the regulators, the framework for strengthening mainland-Hong Kong capital market ties reflects a joint effort to foster high-quality market development. The initiatives are ultimately intended to consolidate Hong Kong’s position as an international financial centre, support the emergence of first-class investment banks, and expand the global influence of China’s capital markets.