In a highly-anticipated announcement today, the Securities and Futures Commission (SFC) and the China Securities Regulatory Commission (CSRC) have approved the launch of Shenzhen-Hong Kong Stock Connect after completing all necessary regulatory approvals and arrangements required for its commencement.
5 December Launch
Trading through Shenzhen-Hong Kong Stock Connect is due to commence on 5 December 2016.
The expanded trading link will further strengthen mutual access between the Mainland and Hong Kong stock markets.
Since the joint announcement was made back in August regarding Shenzhen-Hong Kong Stock Connect, as reported by Finance Magnates, the CSRC and the SFC have worked together to prepare for the launch with all the necessary trading and clearing rules, daily quota mechanism and other regulatory and operational arrangements having been finalised.
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The stock exchanges and the clearing houses have also completed a series of market rehearsals with participants in both markets and reported that systems are ready and contingency plans are in place. Market training and investor education programmes have also been conducted.
SFC Chairman, Mr Carlson Tong, commented: “The expanded trading link will further strengthen mutual access between the Mainland and Hong Kong stock markets. Similar to the arrangements for Shanghai-Hong Kong Stock Connect, the two regulators have established mechanisms to protect the integrity of both markets under Shenzhen-Hong Kong Stock Connect.”
The regulatory arrangements for Shenzhen-Hong Kong Stock Connect include an expansion of cross-boundary regulatory cooperation to facilitate real-time surveillance by the SFC and the CSRC of activity in their respective markets under the programme.
Earlier, the two regulators also entered into a new memorandum of understanding on strengthening cross-boundary regulatory and enforcement cooperation which will supersede the previous memorandum of understanding applicable to Shanghai-Hong Kong Stock Connect.
Today’s announcement marks a significant step in the new Stock Connect scheme which will allow international investors to trade 880 Shenzhen listed stocks while mainland investors will be able to trade 417 Hong Kong stocks.