SEHK and HKSCC Issue Participants Circular On Shanghai-Hong Kong Stock Connect

Charles Li CEO HKEx

Charles Li CEO HKEx

The Stock Exchange of Hong Kong Limited (SEHK) and Hong Kong Securities Clearing Company Limited (HKSCC), wholly-owned subsidiaries of Hong Kong Exchanges and Clearing Limited (HKEx), published on 29 April circulars and related materials to their respective participants to provide information on the key features of Shanghai-Hong Kong Stock Connect.

Background

On 10 April 2014, the Securities and Futures Commission (SFC) and the China Securities Regulatory Commission (CSRC) published their Joint Announcement regarding the in-principle approval for the development of the pilot programme, Shanghai-Hong Kong Stock Connect, for the establishment of mutual stock market access between Mainland China and Hong Kong. HKEx also published an announcement on 10 April 2014 confirming that SEHK and HKSCC were continuing discussions with the Shanghai Stock Exchange (SSE) and China Securities Depository and Clearing Corporation Limited (ChinaClear) (together, the Parties) regarding the establishment of mutual market connectivity initiatives in the form of stock market trading and clearing links following the principles set out in the Joint Announcement.

Circular issued

The reason for the publication of the circulars and related materials today is that pending the signing of the formal agreement between the Parties with regard to the establishment of Shanghai-Hong Kong Stock Connect (which will be the subject of further announcement by HKEx in accordance with the Securities and Futures Ordinance and the Listing Rules of The Stock Exchange of Hong Kong Limited), the Parties have agreed, after having consulted the SFC and the CSRC, that further information on Shanghai-Hong Kong Stock Connect be provided by SEHK and HKSCC as the exchange and clearing house operators respectively, for the purpose of facilitating market understanding of the proposed arrangements and readiness for the implementation of the pilot programme.

It should be noted that while discussions are continuing between the Parties, no formal agreement has been entered into at this stage. Implementation of arrangements for the establishment of Shanghai-Hong Kong Stock Connect will be subject to the satisfaction of conditions, including all necessary regulatory approvals having been obtained by the Parties. Accordingly, caution should be exercised when dealing in HKEx securities and any eligible shares referred to in the Joint Announcement.

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