HSBC becomes trustee of Iron Ore Futures ETF
30 March 2020 Hong Kong
Image: Shutterstock
HSBC has been appointed trustee and designated margin depository bank for Shanxi Securities International Financial (SSIF) Dalian Commodities Exchange (DCE) Iron Ore Futures exchange-traded fund (ETF), which marks the first Iron Ore Futures ETF in Hong Kong.
The Iron Ore Futures ETF was launched by Shanxi Securities International Asset Management (SSIAM), a wholly-owned subsidiary of SSIF.
The ETF allows foreign investors to trade in DCE Iron Ore Futures Contracts in USD margin for the first time.
Settlement accounts in both RMB and USD facilitate “effective trading”, with HSBC China the designated margin depository bank, allowing SSIAM, as manager, to transfer funds into onshore brokers’ margin accounts through an online remittance system.
Patrick Wong, head of China business development and client management, HSBC Securities Services, said: “Gaining straightforward exposure to key commodity benchmarks is particularly important during volatile times, so we are delighted to support SSIAM with this ETF, through our comprehensive, one-stop cross-border services.”
Wong continued: “We have seen increasing overseas demand for DCE market access and this innovative launch marks greater connectivity between Hong Kong and mainland Chinese exchanges.”
Haimo Zhang, head of research and fund manager head of asset management, SSIF, added: “This ETF is considered to be an important strategy for internationalising Chinese commodity futures. Although the fund is launched in the current challenging environment, we expect stable growth of the fund with a boom by the end of 2021.”
The Iron Ore Futures ETF was launched by Shanxi Securities International Asset Management (SSIAM), a wholly-owned subsidiary of SSIF.
The ETF allows foreign investors to trade in DCE Iron Ore Futures Contracts in USD margin for the first time.
Settlement accounts in both RMB and USD facilitate “effective trading”, with HSBC China the designated margin depository bank, allowing SSIAM, as manager, to transfer funds into onshore brokers’ margin accounts through an online remittance system.
Patrick Wong, head of China business development and client management, HSBC Securities Services, said: “Gaining straightforward exposure to key commodity benchmarks is particularly important during volatile times, so we are delighted to support SSIAM with this ETF, through our comprehensive, one-stop cross-border services.”
Wong continued: “We have seen increasing overseas demand for DCE market access and this innovative launch marks greater connectivity between Hong Kong and mainland Chinese exchanges.”
Haimo Zhang, head of research and fund manager head of asset management, SSIF, added: “This ETF is considered to be an important strategy for internationalising Chinese commodity futures. Although the fund is launched in the current challenging environment, we expect stable growth of the fund with a boom by the end of 2021.”
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