Hong Kong is boosting financial ties with the Middle East by signing initial accords with the United Arab Emirates (UAE) to enable mutual recognition of funds and cross-listings of exchange-traded funds (ETFs) on the Abu Dhabi Securities Exchange.
Hong Kong’s market regulator, the Securities and Futures Commission (SFC), and the UAE’s Securities and Commodities Authority signed a memorandum of understanding on Wednesday to facilitate the mutual recognition of funds.
This would allow public investment products to be distributed seamlessly in both markets, marking Hong Kong’s first such arrangement with a Middle Eastern market and the UAE’s first outside its region.
The SFC has previously entered into mutual recognition arrangements with mainland China and ten other overseas financial regulators, including Ireland in May this year.
In a parallel development, bourse operator Hong Kong Exchanges and Clearing (HKEX) signed a separate agreement with ADX to explore initiatives such as cross-listings of ETFs, companies, and environment, social, and governance-related (ESG) products.
“This arrangement marks a significant step in enhancing cross-border market connectivity and facilitating capital flows between Hong Kong and the Middle East,” said HKEX CEO Bonnie Chan Yiting in statement on Thursday. Abdulla Salem Alnuaimi, CEO of ADX, added, “By advancing cross-listings and developing innovative products, we will broaden investment opportunities and deepen liquidity.”
