(Yicai Global) June 29 -- The first batch of exchange-traded funds to be included in the stock connect program linking the Chinese mainland and Hong Kong will begin trading on July 4, according to regulators.

Eligible ETFs traded on the Shanghai and Shenzhen exchanges will be open to all Hong Kong and overseas institutional and individual investors, while those traded on the Hong Kong bourse will be available to mainlanders, the China Securities Regulatory Commission and the Hong Kong Securities and Futures Commission said in a joint statement yesterday.

“ETF Connect is an important milestone because for the first time Stock Connect is expanded beyond stock trading,” said Ashley Alder, the SFC’s chief executive officer. “It will catalyze Hong Kong’s growth as an ETF hub and underscore Hong Kong’s unique role connecting global capital with the mainland.”

The relevant rules and operational and regulatory arrangements have been finalized and technical systems have been put in place, the two regulators added.

The CSRC and SFC also said they will continue their efforts to educate investors and improve their knowledge of the ETF Connect, enhance cooperation against cross-boundary illegal activities and market misconduct, and handle contingencies in a timely and appropriate manner.

The CSRC said it will keep improving the Stock Connect mechanism, further expand the program's eligible subjects, step up cross-border regulatory cooperation to support Hong Kong's status as an international financial center, and promote win-win and joint developments of the mainland and Hong Kong markets.

The addition of ETFS will help enrich the Stock Connect, facilitate the participation of onshore and offshore investors in the Hong Kong and Chinese mainland capital markets, attract more overseas funds targeting medium- and long-term allocation to mainland shares, strengthen institutional opening-up of the mainland capital market, and consolidate and enhance Hong Kong's status as a global financial hub, according to an earlier statement from the CSRC and SFC.

The first 53 ETFs added to the Shanghai Connect and the first 30 added to the Shenzhen Connect include the 50 ETF, 180 ETF, and 300 ETF indexes, as well as representative products related to the biomedicine, non-ferrous metal, semiconductor, brokerage, wine, solar, and infrastructure sectors, the list published by the Shanghai and Shenzhen bourses showed.

The first ETFs added to the Hong Kong Connect are Tracker Fund of Hong Kong, Hang Seng China Enterprises Index, CSOP Hang Seng TECH Index ETF, and iShares Hang Seng Tech ETF.

To be included, the ETFs should have had a daily assets average of at least CNY1.5 billion (USD223.7 million) over the past six months, with at least half a year of trading history and no less than a year of target index tracking, according to the rules.

As of the end of last month, funds flowing into the Shanghai and Shenzhen markets from Hong Kong via the Stock Connect stood at CNY1.6 trillion (USD243.1 billion), while funds flowing into the Hong Kong market from Shanghai and Shenzhen reached CNY2 trillion.

Editors: Xu Wei, Futura Costaglione