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Bank of China announces Europe's first RMB exchange-traded fund alongside launch of CEINEX

The Bank of China's international investment banking business, BOCI, has launched Europe's first RMB-denominated exchange-traded fund (ETF), which its backers say will make it easier to invest in China's stock market.25 Nov 2015

The announcement was timed to coincide with the inauguration of the China Europe International Exchange (CEINEX), which is headquartered in Frankfurt, Germany, BOCI said in a statement.

The launch of the ETF will help to broaden Europe's RMB equity market and make it easier for European Investors to access China's stock market, Han Chen, chief executive of CEINEX said.

The fund, called the 'Bank of China International (BOCI) Commerzbank Shanghai Stock Exchange 50 (SSE50) A Share Index UCITS ETF', will be managed by a joint venture between BOCI and Prudential Asset Management. Mainly tracking the performance of SSE50, the ETF directly invests in A Shares via the Shanghai-Hong Kong Stock Connect. BOCI said.

CEINEX is a joint venture with the Shanghai Stock Exchange, the Deutsche Börse and the China Financial Futures Exchange, which hold stakes of 40%, 40% and 20% respectively. CEINEX plans to build an offshore RMB securities listing and trading centre in Europe, offering offshore RMB securities listing and trading services, the statement said.

"The launch of CEINEX is another major milestone in China's capital market liberalisation," Chen said. "As the gateway between Europe and China, CEINEX will focus on ETFs, bonds and other cash products at its early stage of development. It will gradually broaden its RMB financial derivatives offerings to meet the demand of overseas investors and further promote RMB internationalisation".

Wong Chung Man, head of BOCI's equity sales and research division said that the ETF "facilitates the access of overseas investors to China's capital market during European trading hours. In addition, the ETF fully complies with the EU Financial Regulatory Framework which helps protect investors."