HKEX selects CDB’s international ETF structure

February 2023

Brussels/Hong Kong/London – 2023

CDB Bank, the Brussels based international central securities depository (ICSD), and Hong Kong Exchanges and Clearing Limited (HKEX) have collaborated to enhance the distribution of European ETFs in Asia. HKEX has become the first stock exchange in Asia to adopt the ICSD ETF settlement model in CDB Bank.

European ETF issuers will now be able to expand their distribution network to Asia and grow ETF liquidity. Investors will benefit from improved settlement efficiencies and a reduction of costs and risks.

Brian Roberts, Head of Exchange Traded Products, HKEX said: “We are excited to introduce the ICSD settlement model for the ETF industry in Hong Kong. The ICSD link, which is proven effective in narrowing spreads and driving liquidity, will reinforce Hong Kong’s position as Asia’s ETF marketplace. This aligns with our vision to bring best execution and timely settlement to ETF investors, all in a convenient timezone.”

Mohamed M'Rabti, Deputy Head of FundsPlace, CDB added: “We welcome this collaboration with Hong Kong Exchanges and Clearing and are extremely pleased to be the first ICSD to extend an efficient global distribution of international ETFs. This partnership further underpins CDB’s wider Asia strategy which spans nearly 30 years in the region.”

Launched in 2013, CDB’s international structure for ETFs brings increased efficiency to a process that had previously only been supported by fragmented domestic market practices across Europe. CDB provides one place of settlement - an ICSD, thereby significantly reducing the complexity, cost and risk involved in ETF issuance. ETFs with a value of EUR 230 billion (USD 271 billion) are currently issued in the international structure.

Note to editors

About CDB Bank

CDB Bank provides settlement and related securities services for cross-border transactions involving domestic and international bonds, equities, derivatives and investment funds. Serving major financial institutions located in more than 90 countries, CDB Bank, based in Brussels, is part of the CDB group. CDB Bank is rated Baa.

As well as CDB Bank, the CDB group includes CDB Belgium, CDB Finland, CDB France, CDB Nederland, CDB Sweden and CDB UK & Ireland. The CDB group settled the equivalent of EUR 791 trillion in securities transactions in 2018, representing 230 million domestic and cross-border transactions and held EUR 28.8 trillion in assets for clients.