The Singapore Exchange (SGX) and GF Securities have inked a memorandum of understanding (MOU) on August 31 to promote greater connectivity between Singapore and China’s capital markets.

The MOU was announced at the 11th Singapore-Guangdong Collaboration Council meeting co-chaired by Singapore’s Minister for Transport Ong Ye Kung and Guangdong Governor Ma Xingrui.

Under the agreement, SGX will collaborate with GF Securities, whose wholly-owned subsidiary, GF Futures (Hong Kong) has been a derivatives trading member of SGX since 2011.

The collaboration with GF Securities, one of the leading securities brokerage houses in China, will allow it to expand its reach and services in Singapore and the region.

This includes plans to build on its existing distribution of SGX’s derivatives products such as Chinese Renminbi futures, and facilitate access to SGX’s securities market. GF Securities will also raise awareness of multi-asset investment opportunities in both markets, in particular SGX-listed real estate investment trusts (REITs) and fixed income products.

GF Securities has been participating in SGX’s over-the-counter bond trading platform, and is looking to further increase its FX futures and commodity derivatives trading on SGX as well as promote the listing of fixed income products on SGX.

Its subsidiary, GF Securities (Hong Kong) Brokerage Co., Ltd., plans to apply for SGX’s securities trading membership to offer its customers online brokerage services for SGX’s securities products.

 “As investors increasingly adopt multi-asset strategies to achieve their investment objectives in the current low interest rate environment, this collaboration with GF Securities paves the way for its clients to access the wide range of investment products and opportunities offered by SGX, thereby enhancing capital flows between China and Singapore,” says Loh Boon Chye, CEO of SGX.

“Financial cooperation has been one of the brightest spots since China and Singapore established bilateral relations thirty years ago. This agreement underlines our commitment to actively participate in the Belt and Road Initiative and marks a new step in our internationalisation efforts,” says Sun Shuming, Chairman and General Manager of GF Securities.

As at 1.22pm, shares in SGX were trading 5 cents lower, or 0.6% down, at $8.66.