China AMC, CSOP to list RQFII ETFs in Japan

Mainland fund houses China AMC and CSOP plan to list RQFII exchange-traded funds in Tokyo, in a move that gives Japanese retail investors access to physically backed A-share ETFs.

This could happen as early as 27 February, reports Japanese newspaper Nikkei, but the two firms declined to confirm this, saying there is currently no timetable for listing, with the applications still subject to regulatory approval.

Sources indicate that the regulator is set to decide today whether the ETFs can be listed on the Tokyo Stock Exchange. If the applications are accepted, this will be the first time that RQFII ETFs have listed outside Hong Kong.

The issuers plan to list their RQFII ETFs in the form of depositary receipts, which will enable local Japanese investors to buy the physically-backed A-shares in Japanese yen.

It is understood that the move is driven not by policymakers, but by the Tokyo Stock Exchange, which wants to be more innovative. The bourse chose the two fund managers under certain criteria and made a direct pitch to them, says a source.

RQFII ETFs are A-share ETFs that invest directly into A-shares. As of yesterday, the AUM for the China AMC CSI 300 and CSOP A50 was Rmb15.38 billion and Rmb18.59 billion, respectively.

Both funds are traded through RMB and Hong Kong dollar counters, but will trade in yen in Japan.