The company confirmed to International Adviser that it will now run its Asian operations from its base in Australia.
The ETF Securities’ licence, first issued in August 2012, was removed in January, according to Hong Kong’s Securities and Futures Commission (SFC).
Mark Weeks, chief executive of ETF securities, said the passive asset manager had decided not to renew its SFC licence after removing three of its commodities ETFs last year.
The products included the Physical Gold ETF, Physical Silver ETF and Physical Platinum ETF.
“As a result, we elected not to renew our HK licence, and our Asia business now is run from our Australian office,” said Weeks in a statement provided to IA.
He added that ETF Securities’ decided to pull the delisted products following concerns over the quality of the ETFs on offer.
“As a leading and independent global provider, we believe that we have a responsibility to provide investors with high quality products that are designed to trade efficiently on exchange.
“Having sufficient scale, concentrated liquidity and tight bid/offer spreads is a key part of this.
“After careful consideration we decided last year to close the below Hong Kong unit trusts: ETFS Physical Gold ETF, ETFS Silver ETF and ETFS Platinum,” he said.
ETF market
Commodity ETFs only account for around 0.3% of overall ETF market capitalisation in Hong Kong, while the five largest ETFs dominate by having 70% of overall market cap, William Chow, managing director of ETF business at Value Partners, said in a previous interview in December with our sister publication Fund Selector Asia.
At that time, Value Partners temporarily cut the fees of its gold ETF in December in attempt to gather more assets.
Currently, there are seven ETFs in Hong Kong that have commodities as their underlying market, according to information from the Stock Exchange of Hong Kong.
In total, there are 175 ETFs listed in Hong Kong, which include five futures-based ETFs, 142 physical and 28 synthetic.
Commodity-driven inflows
Separately, the UK-based firm reported in late January strong inflows globally, led by commodity funds.
Its commodity products had net inflows of $4.2bn for the full year 2016, with its commodity AUM reaching $17.6bn, according to a statement from the firm.
Commodities were driven by gold, with inflows of $3.4bn, after three years of outflows.
Wealth managers are a key target for the firm, said Weeks at the time.
“The restructuring of our sales team, which took place over 18 months ago, is also bearing fruit, with $800m in inflows from wealth managers,” he said.
