China to allow insurers to invest in Hong Kong ETFs via Stock Connect: regulator

China’s top financial regulator said it will allow mainland insurers to invest in exchange-traded funds (ETFs) in Hong Kong through the Stock Connect to support the development of the financial market in the city. 

The National Financial Regulatory Administration will also actively support mainland insurance funds to participate in mutual access schemes between the financial markets of both places, according to a statement on Tuesday. 

Chief Executive John Lee Ka-chiu thanked the central government and the NFRA for their support, saying that the measure further facilitates mainland insurance companies in diversifying their asset allocation via the SAR, while promoting the development of the local ETF market and strengthening its ecosystem.

The win-win initiative will not only provide mainland insurance companies with broader and more diversified investment channels, but also drive the development of the market of exchange-traded products in Hong Kong, further deepening the connectivity and concerted development of the two capital markets, said Financial Secretary Paul Chan Mo-po.

The trading volume of exchange-traded products has repeatedly reached new highs. The average daily turnover nearly doubled year-on-year in 2025, and it further increased by over 25 percent in the first half of this year, making Hong Kong one of the leading hubs in the region for relevant products, Chan said.

Currently, 31 ETFs are eligible for southbound trading under Stock Connect, with a total market capitalization of HK$343.6 billion as of July, data from the Securities and Futures Commission showed. 

Total turnover of these ETFs under the southbound trading grew year-on-year by 59 percent to reach HK$780.7 billion in the first seven months of the year, representing about 7 percent of their total turnover.

The SFC’s chief Julia Leung Fung-yee said the policy will bring more development opportunities to the city’s asset management industry, hoping it would further facilitate more medium- and long-term funds from mainland to tap Hong Kong as an investment platform for international asset allocation, thereby consolidating the city’s position as a leading asset and wealth management hub.

Hong Kong Exchanges and Clearing (0388) also welcomed the move, calling it a “significant development” for Stock Connect.

Its chief executive Bonnie Chan Yi-ting said the initiative boosts the market's vibrancy and depth, supporting the long-term growth of the connect program and underscoring Hong Kong's role as a superconnector between China and the world.

Bonnie Chan on Tuesday joined a delegation in Beijing led by Secretary for Financial Services and the Treasury, Christopher Hui Ching-yu, that met with Vice Minister of NFRA, Xiao Yuanqi, discussing measures to promote the mutual development of the capital markets in both places.

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