Hong Kong Exchanges and Clearing Limited (HKEx) plans to list the first Taiwan Exchange Traded Fund (ETF) Wednesday following a recent agreement reached between the Hong Kong and Taiwan financial regulators on mutual recognition.

As the first Taiwan ETF set to debut on Hong Kong's Main Board pursuant to the said mutual recognition arrangement, the Polaris Taiwan Top 50 Tracker Fund (H.K.) is a feeder fund that will invest its assets into a master fund, the Polaris Taiwan Top 50 Tracker which is listed on the Taiwan Stock Exchange, said HKEx in a statement issued on Tuesday.

The benchmark of the master fund is the TSEC Taiwan 50 Index. The securities market makers for the ETF are Polaris Securities Hong Kong Limited and UBS Securities Hong Kong Limited.

The Hong Kong Securities and Futures Commission (SFC) and the Taiwan Financial Supervisory Commission (FSC) agreed in May to facilitate the cross listing of ETFs between the stock exchanges of Hong Kong and Taiwan. Under the arrangement, the SFC and the FSC will mutually recognize the other jurisdiction's ETFs.

As introduced by HKEx, two other ETFs tracking Taiwan-related indices were listed in Hong Kong prior to the regulatory agreement. With this latest listing, the number of ETFs on HKEx's securities market will increase to 36 and the number of ETF managers will increase to nine. All ETFs listed on HKEx's securities market are designated for short selling with tick rule exemption.

(Xinhua News Agency August 18, 2009)