09 November 2022
Flow Traders announces today that it has obtained regulatory approval for a Qualified Foreign Institutional Investor (QFII) license in China, allowing the company to trade on-shore in China’s domestic markets. Flow Traders has also received approval to open a Representative Office in Shanghai from the China Securities Regulatory Commission.
These two approvals are important next steps in Flow Traders’ strategy to expand its footprint across Asia. Flow Traders has been active in the region since 2008, initially setting-up an office in Singapore and then establishing a trading hub in Hong Kong in 2018. Flow Traders presently acts as market maker for 215 of the 259 exchange-traded funds (ETFs) listed on the Hong Kong Exchanges and Clearing Ltd. (HKEX) and has been awarded Top Market Maker for ETP (exchange-traded products) Coverage by HKEX annually since 2018.
Flow Traders’ expanding operations and focus on the Chinese mainland will increase the availability of liquidity in the Chinese ETF markets, just as the local ETF market undergoes rapid growth. The number of listed ETFs in the Chinese mainland has more than tripled over the last three years to 734, while the market cap for those funds more than doubled to US $200 billion, according to data from the Shanghai and Shenzhen stock exchanges.
Establishing a physical presence in the Chinese mainland will also enable Flow Traders to stay more connected to market trends, whilst providing support and liquidity to Chinese investors navigating global financial products. Several Chinese ETF issuers and counterparties have already been successfully onboarded and are benefiting from Flow Traders’ extensive global trading footprint across multiple asset classes.
Dennis Dijkstra, CEO Flow Traders, commented:
“Accessing the China market has been a key component of our strategy to grow our footprint in Asia. China is the largest ETP market within Asia and is a tremendous opportunity for Flow Traders. We’re delighted to have obtained these important regulatory approvals and in the coming months we will focus on building our business in China and leveraging our leading market infrastructure to support both global and Chinese investors. Flow Traders has a proven track record in the ETF market globally and we are fully committed to fulfilling our ambition to create transparent, stable, and orderly markets, while becoming a trusted partner to Chinese market participants. We believe our presence in China’s mainland markets will contribute to the sustainable development of the broader China on-shore ETF ecosystem.”
Fabian Rijlaarsdam, Managing Director Asia Flow Traders, added:
“We welcome the continued opening-up of China’s capital markets, including the important milestone of ETFs being incorporated into the Stock Connect earlier this year. The entire Flow Traders team is pleased that we completed the execution of our first China on-shore ETF trades in October, which only reinforces our long-term commitment to make China’s capital markets more accessible for investors. Flow Traders has been present in Asia for 15 years and we intend to use our regional and global expertise and footprint to provide liquidity to the China markets. Opening an office in Shanghai is a natural extension of this development and enables Flow Traders to keep up-to-date on the latest regulatory initiatives and market trends in China.”