BNY Mellon and the Shanghai Stock Exchange (SSE) have signed a memorandum of understanding (MOU) to collaborate on exchange-traded funds (ETFs) based on the BNY Mellon Depositary Receipt (DR) Indices to be traded on the Shanghai Stock Exchange.
The SSE is the principal exchange in the People’s Republic of China and the MOU grants it exclusivity for the listing of ETFs which utilise the BNY Mellon DR Indices as a benchmark within the People’s Republic of China.
Gregory Roath, head of Asia-Pacific for BNY Mellon’s depositary receipts business, said: “Our DR Indices are the basis for many ‘first to market’ ETFs representing the emerging and frontier markets.
“The inclusion of Chinese single-listed ADRs in our indices will enable potential ETF sponsors to offer an investment product that includes offshore listed Chinese companies such as Baidu, Netease, Home Inns and Ctrip. These companies, which trade exclusively in DR form outside of China, are often left out of many other major indices.”
Roath said that an ETF based on the DR Indices would enable mainland Chinese investors to gain real exposure to foreign traded equities and allow them to trade these in Chinese renminbi on the principal Chinese exchange.
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