ETF Securities set to launch in Hong Kong

UK-based exchange-traded commodity firm ETF Securities (ETFS) is setting up in Hong Kong, having last month won approval in principle to operate in the city.

Fred Jheon has relocated from the Japan office to head the Asia business, while Nigel Phelan has transferred from Sydney to run regional sales.

Jheon has been Asia-Pacific head since April 2011, initially in Tokyo. Before that he was head of product and business development at ETFS in San Francisco, where he started the US business.

Prior to joining ETFS, Jheon helped to develop many of the products offered by BlackRock's iShares ETF unit as an international portfolio manager at Barclays Global Investors from 2000-2008, before the latter firm merged with BlackRock in 2009. He has also worked for consulting firm PricewaterhouseCoopers.

Jheon and Phelan declined to comment for this article, citing regulatory reasons.

Phelan had initially been slated to move from Australia to Hong Kong around the second half of last year, as noted in an interview with AsianInvestor in February 2011. He has been with the company since 2006 and spent time in London before moving to Australia to set up the business in 2009.

In that interview, Phelan said he was focusing on Hong Kong and Singapore as major exchanges for ETFS’ business. It had been in talks with regulators in those markets about launching products by the first quarter of 2012, having listed exchange-traded commodities (ETCs) in Tokyo.

ETFS is still thought to be planning to list products in Hong Kong and potentially also Singapore, although again the company declined to comment.

The firm has also spoken to the China Securities Regulatory Commission about eventually listing ETCs in Shanghai and potentially setting up a joint venture at some stage.

Perhaps not surprisingly, given the present market environment, it has taken ETFS a little longer than anticipated to start getting its Asia ex-Japan business off the ground.   

Still, the relatively swift pace of liberalisation of rules around ETFs by the Chinese authorities in recent months will presumably be an encouraging sign for ETFS.

With $27.8 billion in AUM as of September 6, ETFS offers more than 200 products globally tracking individual commodities or indices; most of the index products are based on the Dow Jones UBS index family.