Hong Kong Exchanges and Clearing Limited (HKEx) announced today (Wednesday) that a stamp duty waiver for all Exchange Traded Funds (ETFs) listed in Hong Kong will take effect on 13 February 2015 following the passage of the Stamp Duty (Amendment) Bill 2014 today in the Legislative Council.
The current stamp duty waiver for ETFs does not apply if the ETF tracks an index comprised of more than 40 per cent Hong Kong-listed stocks. As a result, 26 of the 124 ETFs listed in Hong Kong are subject to stamp duty now (please see list below for details). The non-exempt ETFs accounted for nearly a quarter of listed ETF turnover at HKEx last year.
Since the initial stamp duty waiver was extended in 2010, ETF listings in Hong Kong increased from 69 at the end of 2010 to today's 124. Average daily ETF turnover also increased substantially, rising from $2.4 billion in 2010 to $4.7 billion last year. In addition, ETFs’ contribution to HKEx’s securities market turnover nearly doubled from 3.5 per cent in 2010 to 6.9 per cent last year, when Hong Kong was ranked third in ETF turnover in Asia and sixth globally.
"HKEx welcomes this initiative by the Government and believes it will be another very positive development for Hong Kong as well as our financial markets," Chief Executive Charles Li. "We had record ETF turnover last year and this change will make our ETF business even stronger."
Details of stamp duty on trades in HKEx’s securities market are available on the HKEx website.
ETFs now subject to stamp duty and with a waiver from 13 February 2015