The National Financial Regulatory Administration (NFRA) said it will support mainland insurance institutions to invest in exchange-traded funds (ETFs) listed in the Hong Kong Special Administrative Region through the southbound trading of Stock Connect, according to a statement by the Hong Kong SAR government on Tuesday.

“The announcement further facilitates mainland insurance companies in diversifying their asset allocation via Hong Kong, while promoting the development of the local ETF market and strengthening its ecosystem,” Chief Executive John Lee Ka-chiu said in the government statement.

The new initiative is expected to optimize the asset allocation structure of mainland insurance companies, strengthen the Hong Kong’s ETF trading ecosystem, as well as deepen the connectivity and concerted development of the two capital markets.

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Financial Secretary Paul Chan Mo-po said that Hong Kong has been actively promoting the development of the ETF market since ETFs were included in the stock connect trading program in 2022.

“The trading volume of exchange-traded products has repeatedly reached new highs; the average daily turnover nearly doubled year-on-year in 2025, and it further increased over 25 percent year-on-year in the first half of this year,” Chan noted.

“Their trading scale has grown significantly in the past few years, with the average daily turnover in the first half already about 12 times of that in the year (2022) when the initiative was launched,” the finance chief added.

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"Mainland insurance funds diversifying their asset allocations through Hong Kong ETFs will boost the market’s vibrancy and depth, supporting the long-term growth of the connect program and underscoring Hong Kong’s role as superconnector between the Chinese mainland and the world,” Hong Kong Exchanges and Clearing CEO Bonnie Chan Yi-ting said in an HKEX statement.

The average daily turnover for southbound and northbound ETFs for the first seven months of 2026 reached HK$5.8 billion ($739 million) and 5.1 billion yuan ($756 million) , up 61 percent and 86 percent respectively, compared with the same period last year, HKEX said.

The average daily turnover of ETFs in Hong Kong for the first seven months increased 22 percent annually to HK$40.6 billion, the bourse added.

Meanwhile, Secretary for Financial Services and the Treasury Christopher Hui Ching-yu, Securities and Futures Commission’s investment products executive director Elisa Ng Ka-li, and Bonnie Chan met NFRA Vice-Minister Xiao Yuanqi in a business delegation in Beijing on Tuesday, to discuss the coordinated development of the mainland and Hong Kong capital markets.