Exclusive-China has considered opening its $520 billion ETF market to Western market makers, sources say

Selena Li

Fri, Apr 11, 2025, 7:00 AM 2 min read

By Selena Li

HONG KONG (Reuters) - China has been looking astatine allowing Western firms specified arsenic Citadel Securities and Jane Street to enactment arsenic marketplace makers successful its rapidly increasing exchange-traded money (ETF) sector, 2 radical with nonstop cognition of the substance said.

Over the past 2 years, Chinese authorities person issued much licences and encouraged the improvement of home marketplace makers. But planetary marketplace makers are much experienced successful providing liquidity to ETFs and the determination would boost trading ratio and little costs, the radical said, declining to beryllium identified owed to the sensitivity of the matter.

The sources cautioned, however, that the escalating commercialized warfare with U.S. that has seen China saddled with tariffs of 145% this twelvemonth could hold Beijing's authoritative greenish airy for U.S. firms.

ETF marketplace makers service arsenic liquidity providers, offering continuous bid and inquire quotes for ETF shares which let investors to commercialized the products efficiently and astatine little cost. Licenced marketplace makers successful China bask little fees and little restrictions successful trading.

Billionaire Ken Griffin's Citadel Securities and Jane Street, 2 of the largest market-making firms successful the U.S., arsenic good arsenic Amsterdam-headquartered Optiver whitethorn beryllium the archetypal to payment erstwhile the marketplace is opened up, according to 1 of the radical and a 3rd source.

Citadel Securities applied successful January to acceptable up its ain securities broker portion successful China.

The China Securities Regulatory Commission, Citadel Securities and Jane Street did not respond to Reuters requests for comment. Optiver declined to comment.

China's ETF assemblage has expanded 134% implicit the past 2 years to beryllium worthy $510 billion, driven by beardown inflows from authorities superior that has propped up the banal market. It is present the second-largest ETF marketplace successful the Asia Pacific portion aft Japan's, which is worthy $620 billion.

Foreign fiscal firms person successful caller years been granted wider entree to China's home securities, funds and security sectors.

Even so, galore overseas firms person trimmed headcount successful mainland China and pared backmost enlargement plans, acrophobic astir dilatory maturation for the world's second-biggest system and the emergence successful geopolitical tensions.

Last year, firms doing truthful included Fidelity International, Morgan Stanley and Legal & General.

(Reporting by Selena Li; Editing by Sumeet Chatterjee and Edwina Gibbs)