China Securities Regulatory Commission Confirms it Received Blockchain-related ETF Application

China’s Securities Regulatory Commission has confirmed that it recently received an application for a blockchain-related exchange-traded-fund (ETF).

The nation’s securities regulator noted that the proposal was submitted on December 24, 2019 by Penghua Fund, a Shenzhen-headquartered asset manager. According to the filing, the ETF application involves tracking the performance of several publicly-listed company stocks from local companies providing blockchain-focused products and services.

If the blockchain-focused ETF is approved, the Penghua Fund would become the nation’s first blockchain-related ETF, a December 26 news report from the state-managed Shanghai Securities Journal (SSJ) stated.

Notably, the Shenzhen Stock Exchange introduced its “Blockchain 50 Index” on the same day that Penghua Fund’s ETF application was filed.

The index consists of the 50 leading Shenzhen-listed blockchain companies in terms of market cap. The list includes major blockchain-related solutions providers such as Ping An Bank, Midea Group and Zixin Pharmaceutical.

As mentioned in SSJ’s report, the DLT-focused companies in the new index represent a wide cross-section of the country’s blockchain industry, with a special focus on services related to hardware development, technology and services, and blockchain-based apps.

SSJ’s report notes that industry analysts argue that if Penghua Fund’s ETF application is approved, then several other local asset management firms might submit their own proposals.

The global blockchain industry is in its early stages of development, however, the SSJ says that the formulation of policy guidance and a growing number of blockchain firms could potentially lead to the introduction of many new blockchain-focused ETFs.

A fund manager from a Beijing-headquartered company revealed that many local investors  are still not familiar with blockchain-based products.

Dong Weiwei, fund manager at Everbright Prudential, said that as a distributed and secure technology, blockchain could have many different business use cases. He pointed out that DLT-enabled platforms might help support digital finance, Internet of Things (IoT) tech, intelligent manufacturing, supply chain management, and crypto-assets.


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