China opens ETF market to Western companies?

China is considering allowing Western firms such as Citadel Securities and Jane Street to act as market makers in the country’s fast-growing exchange-traded fund (ETF) sector, according to two sources familiar with the matter.

ETF market makers act as liquidity providers, offering continuous buy and sell prices for ETF shares, helping investors trade more efficiently at lower costs. Illustration photo

Over the past two years, Chinese authorities have issued more licenses and encouraged the development of domestic market makers. However, international market makers have more experience providing liquidity for ETFs, sources say, which could help increase trading efficiency and reduce costs.

ETF market makers act as liquidity providers, offering continuous buy and sell prices for ETF shares, allowing investors to trade more efficiently at lower costs. In China, licensed market makers enjoy lower fees and fewer restrictions on trading activities.

Billionaire Ken Griffin's Citadel Securities and Jane Street – two of the largest market makers in the US – along with Amsterdam-based Optiver could be among the first to benefit if the market opens, according to sources.

Citadel Securities applied to set up a securities brokerage firm in China in January.

China’s ETF market has grown 134% in the past two years to $510 billion, driven by strong state capital inflows to support the stock market. It is now the second-largest ETF market in the Asia-Pacific region, behind Japan’s $620 billion.

In recent years, foreign financial companies have been given expanded access to China's domestic securities, fund and insurance markets.

Minh Hien

According to Reuters

Source: https://congthuong.vn/trung-quoc-mo-cua-thi-truong-etf-cho-cong-ty-phuong-tay-382659.html