Cross-listing mode refers to the mode that ETFs developed and managed by overseas fund management companies and listed on overseas exchanges are listed on domestic exchanges. This model has the conditions to realize the redemption mechanism of physical and cash redemption, and the simple and quick way to issue cross-border ETFs can also bring scale effect to the fund when laws and regulations permit, but it is difficult for domestic securities regulators to supervise overseas ETFs under this model. This form is mainly adopted in Europe and Hong Kong.
Linked fund mode refers to the mode that funds with almost all assets invested in overseas ETFs are issued in China and listed and traded on domestic exchanges after the fund is established. The cross-border ETF of this model is equivalent to the fund in the fund. Different from the cross-listing model and independent establishment model, the redemption mechanism of linked fund model can only use cash, not physical objects. The mechanism of linked fund model is relatively simple, which is a very simple and feasible model for the issuance and operation of cross-border ETFs, and it is also convenient for domestic securities regulators to implement supervision. However, the linked fund model can't avoid the double charging problem that FOF generally faces, which may lead to a large tracking error. The cross-border ETF representative of the linked fund model is Taiwan Province Bora Biaozhi CSI 300, which is the linked fund of CSI 300ETF listed in Hong Kong, while Hong Kong Bora Taiwan Province Excellence 50 Fund is the linked fund of Taiwan Province 50 ETFs.
Independent establishment mode refers to the mode that domestic fund management companies develop and issue ETFs with overseas capital market index as the tracking target and list them on domestic exchanges. This model also has the conditions to realize the redemption mechanism of physical and cash redemption. Etf fund network believes that under this model, the development of cross-border ETF products is more complicated, but it can better cultivate the development and management capabilities of cross-border ETFs in China, and also facilitate the supervision and management of domestic securities regulators, which is more in line with the long-term development needs of cross-border ETFs in China. The United States and South Korea mainly adopt this model.