Clearstream and SSCC strengthen direct link for China-domiciled funds
- Cooperation to give eligible Hong Kong institutional investors direct access to China’s investment fund market
Clearstream Banking S.A., Deutsche Börse Group’s post-trading services provider, and the Shenzhen Securities Communication Co., Ltd (SSCC), opened a direct connectivity for fund order routing of Mainland China-domiciled funds. The link is established under the Mainland China-Hong Kong Mutual Recognition of Funds (MRF) programme, which allows Hong Kong and Chinese asset managers to distribute recognised funds in both jurisdictions.
The new link between the SSCC and Vestima, Clearstream’s central platform for fund services, facilitates the direct processing of cross-border investment fund transactions between Mainland China, Hong Kong and international market participants. Clearstream customers can now send orders for Mainland China funds under the MRF scheme, and fund orders can be routed directly to SSCC for transmission to the fund register held by the China Securities Depository and Clearing Corporation Limited (CSDC). In return, China-based asset managers are able to reach eligible Hong Kong institutional investors. Relevant transaction orders are being processed in a streamlined, automated and efficient manner.
With the cooperation, Clearstream has taken an important step in strengthening its ties with the Chinese investment fund markets and now became the first international fund service provider that can directly route orders from eligible Hong Kong institutional investors to SSCC for investments in funds in Mainland China.
Xue Ke, vice-general manager of SSCC, said: “Mutual recognition of funds is an important step towards the opening-up and innovation of China’s capital market in recent years. It accelerates the two-way capital flow between domestic and overseas markets, and promotes the competitiveness and transformation of the asset management industry. In order to meet the growing market demand of MRF, SSCC continues to work with international counterparts such as Clearstream to serve clients in Mainland China and Hong Kong, providing an electronic one-stop solution for the operations of mutual recognition of funds.“
Philippe Seyll, co-CEO of Clearstream Banking S.A., commented: “We welcome the eligibility of the first China-domiciled funds in Vestima under the MRF programme. It is a notable step towards opening the Chinese market for investments into domestic mutual funds and towards a further internationalisation of the Renminbi. The cooperation with SSCC supports our key objective to meet our customers’ increasing demand to invest in Asia and to facilitate their business in those markets.”
As an international central securities depository (ICSD) headquartered in Luxembourg, Clearstream provides the post-trade infrastructure for the Eurobond market and services for securities from 57 domestic markets worldwide. With 13 trillion Euros in assets under custody, Clearstream is one of the world’s largest settlement and custody firms for domestic and international securities. Alongside its highly automated mutual fund services, Clearstream provides clients with a “one-stop shop” solution for all fund types.
Established in August 1993, with Shenzhen Stock Exchange (SZSE) as main shareholder, Shenzhen Securities Communication Co.,Ltd. (SSCC) is the only network service provider for the Shenzhen securities market. It is the most important communication processing centre and network hub for the Shenzhen market, as well as for the national capital market.
SSCC, with its professional IT team, operates a secured and efficient landline ground-based communication network and VSAT private network reaching the whole nation. The network carries all the trading and clearing data for the Shenzhen securities market, including order-entry, trades reports, market data, and clearing and settlement data. In addition, the company has established a national financial data exchange platform and securities communication data centre, providing customized networking and IDC solutions for hundreds of brokers, fund firms, banks, insurances companies and other financial institutions.