HKEX Scraps ETF Fees to Promote Trading

What’s new: The Hong Kong stock exchange waived trading fees for some exchange traded funds (ETFs) in an effort to boost trading and lure global investors.

Hong Kong’s ETF market is one of the largest in Asia, with HK$404 billion ($52 billion) in market capitalization, according to the bourse. An ETF is a security that tracks an index, sector, commodity or other asset and can be traded on a bourse like a conventional stock.

The waiver will apply to Hong Kong-listed fixed income and money market ETFs starting Monday, according to a statement by Hong Kong Exchanges and Clearing Ltd. (HKEX).

The scrapped fees include the trading tariff of HK$0.50 and the minimum stock settlement fee payable. As of May 28, there were 29 fixed income and money market ETF trading counters eligible for the fee waivers, the HKEX said.

Why it matters: The fee waivers will help investors reduce transaction costs. They represent the “HKEX’s latest initiative to enhance its ETF market structure and drive liquidity to Hong Kong-listed ETFs,” said Brian Roberts, HKEX’s head of exchange traded products.

The move is expected to offset some of the impacts of the HKEX’s decision to raise the stamp duty on stock transactions by 30% starting Aug. 1, a move that bolsters Hong Kong’s financial coffers but may dampen market transactions.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com)

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