THE Shanghai Stock Exchange (SSE) said Friday it had reached an agreement with bourses in Shenzhen and Hong Kong, as well as with China Securities Depository and Clearing Corp., to include exchange-traded funds (ETFs) in stock connect programs.

An ETF is a basket of securities that is listed on an exchange like a stock, offering exposure to a sector or index without the investor having to buy the underlying assets.

The SSE said in a statement that the parties, including the Shenzhen Stock Exchange and Hong Kong Exchanges and Clearing Ltd., would now step up business and technical preparations related to the inclusion of ETFs, a process estimated to take around six months.

“This agreement ... will give global investors direct, efficient access to Hong Kong and the mainland’s rapidly developing ETF markets,” HKEx chief executive Nicolas Aguzin said in emailed comments.

The addition of ETFs marks the second expansion of China’s stock connect programs in a week after its securities regulator Dec. 17 said the Shanghai-London stock connect program would be broadened to include Shenzhen-listed companies, as well as capital markets in Germany and Switzerland.

The program allows companies traded in Shanghai and London to list on each other’s bourses by selling depository receipts.

Separately, China’s securities regulator proposed Friday tightening rules governing Chinese companies listing abroad, which it said would improve oversight while allowing the practice to continue. (SD-Agencies)