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China and Japan plans ETF connect scheme

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China and Japan are making a move to facilitate investors’ stock purchases in each other’s countries through cross-listing of exchange-traded funds (ETFs).

The Shanghai Stock Exchange and the Japan Exchange Group signed an ETF Connectivity Agreement Monday, taking a step toward easier access to ETF markets in both countries. Fund managers from both sides will be able to set up cross-border funds through China’s existing Qualified Domestic Institutional Investors and Qualified Foreign Institutional Investors mechanisms to invest in ETFs in each other’s markets.

Nomura Asset Management Co. Ltd., a wholly-owned subsidiary of Nomura Holdings Inc., also announced Monday that it formed a partnership with China Asset Management Co. Ltd. to participate in the ETF Connect scheme.

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