While the new Hong Kong-listed China ETF may not expose investors to counterparty risks associated with derivatives, the new ETF may be subject to the whims of mainland regulators as they are free to step in and revise the guidelines.

E Fund Management Co., CSOP Asset Management Ltd. and Harvest Global Investments are also waiting on approval for physically backed A-share ETFs. [China Prepares to Launch ETFs]

All Chinese A-share ETFs will have a 5 billion yuan, or $784 million, market cap on their value.

For more information on Hong Kong, visit our Hong Kong category.

Max Chen contributed to this article.

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