SHANGHAI - China's securities regulator has suspended approval of exchange-traded funds (ETFs) seeking to list on the Shanghai Stock Exchange since technical glitches in November, the Oriental Morning Post reported, citing unidentified people.
The technical issues delayed ETF transactions on the exchange on Nov 5, the Oriental Morning Post said. The China Securities Regulatory Commission (CSRC) hadn't approved any ETFs in Shanghai from Nov 5 to Dec 23, the newspaper said, citing a statement from the CSRC dated on Monday. The nation's yuan-denominated A-share market has 21 ETFs as of December, the newspaper said.
"It's simply a technical glitch for the exchange, and once that has been fixed, the regulator will let things go back to normal," said Zhang Qi, an analyst at Haitong Securities Co in Shanghai. "ETFs are definitely a major area the Shanghai Stock Exchange wants to greatly promote in the future."
ETFs have become popular worldwide since their creation in 1993 as they widened investors' access to different types of assets. They are designed to mimic the performance of market indexes and are traded like stocks on an exchange.
Lion Fund Management Co received regulatory approval to raise up to $500 million in China to invest in overseas ETFs backed by gold, the first in the country to be approved to do so, said Yang Zi, an executive at Lion Fund's marketing department.
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