Published On: Tue, Nov 11th, 2014

Clearstream To Offer Settlement And Custody For China A-shares

Berthold Kracke, Head of Business Management, Clearstream

Berthold Kracke, Head of Business Management, Clearstream

A new joint program between the Shanghai Stock Exchange (SSE) and the Hong Kong Stock Exchange (HKEx) will allow non-resident investors to invest in Chinese companies whose shares are listed on the SSE and denominated in Renminbi only, so-called “China A-shares”, without having to apply for a status as a Qualified Foreign Institutional Investor (QFII) or Renminbi Qualified Foreign Institutional Investor (RQFII). Doing so, the Shanghai-Hong Kong Stock Connect Program will enable Chinese firms to further broaden their investor base, who in return will gain another access opportunity to a desirable asset class.

Simultaneously to the launch of the program in the market on 17 November, Clearstream will be able to offer a range of settlement and custody services for China A-shares via its existing Hong Kong link, Citibank N.A., for the first time.

This will expand Clearstream customers’ access to Asian markets, which up until now includes China’s B-shares, Hong Kong, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand.

Anne-Pascale Malréchauffé, Head of Network Management at Clearstream, commented: “The Shanghai-Hong Kong Stock Connect program responds to the financial markets’ strong interest in the Chinese currency. As a core market infrastructure provider, it is a cornerstone of Clearstream’s strategy to support our customers’ increasing demand to invest in Asia and to facilitate their business in those markets. With this program we are now able to provide our customers with investment opportunities in China A-shares, a highly sought-after asset class. We have been supporting the internationalisation of the Renminbi since the early days and welcome this program as a further step towards a further development of an international Renminbi market and the Chinese capital markets in general.”

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