Shanghai and Korean bourses agree to launch ETF Connect

SHANGHAI: Shanghai and Korean exchanges have agreed to launch a cross-border scheme for exchange-traded funds (ETFs), and aim for closer cooperations in index development and bond markets, the Shanghai Stock Exchange (SSE) said on Tuesday.

SSE general manager Cai Jianchun and Korea Exchange chairman Sohn Byungdoo signed a memorandum of understanding (MOU) for closer partnership during a virtual meeting on Tuesday, SSE said in a statement.

The agreement, which will facilitate cross-border investment between China and Korea, comes as the two Asian countries will celebrate 30 years of diplomatic ties next year. China is also Korea's biggest trading partner.

The MOU will "deepen ties of the two exchanges, promote further cooperation between Chinese and Korean capital markets, and propel regional financial coordination," SSE said.

SSE has launched similar ETF connect schemes with Hong Kong and Japan. Chinese investors can also access securities in the United States, France and Germany via outbound ETFs listed in Shanghai.

Plans to launch ETF Connect between China and Korea represents Beijing's latest effort to open up its financial markets. China is close to launching Wealth Connect linking Guangdong with neighboring Hong Kong and Macau.

(Reporting by Samuel Shen and Andrew Galbraith, editing by Louise Heavens)