The China Securities Regulatory Commission (CSRC), Hong Kong Securities & Futures Commission (SFC) issued a joint announcement on 16 August, 2016, approving in principle the establishment of mutual stock market access between Shenzhen and Hong Kong (Shenzhen-Hong Kong Stock Connect). The Stock Connect will be launched by Shenzhen Stock Exchange (SZSE), the Stock Exchange of Hong Kong Limited (SEHK), China Securities Depository & Clearing Company Limited (China Clear), and Hong Kong Securities Clearing Company Limited (HKSCC). It signifies a firm step forward towards legalization, market-orientation and internationalization of the Chinese capital market.
According to a person in charge with SZSE, the joint announcement specifies the scope of eligible shares included in Shenzhen-Hong Kong Stock Connect. The eligible shares are listed on the Main Board, SME Board and ChiNext Market and represent China’s emerging industries, highlighting high-growth market feature and offering expanded investment opportunities for both domestic and overseas investors. The launch of Shenzhen-Hong Kong Stock Connect is of great significance in SZSE’s reform and opening-up process.. In order to ensure the smooth launch and safe operation of Shenzhen-Hong Kong Stock Connect, SZSE will make careful preparations, actively carry out lawful, strict and comprehensive supervision, strengthen market surveillance, prevent risks associated with cross-border speculations, crack down on irregularities and violations such as market manipulation, and enhance relevant risks disclosure and promoting investor education.
At present, development and testing of technical systems as well as drafting of major rules has been finished. In the next stage, under the unified coordination of CSRC, SZSE will work closely with SEHK, China Clear and other relevant parties to advance preparation in all fronts including detailed business rules, technical development and testing by market institutions, member brokers’ training to ensure all business and technical preparations are fully in place within the timetable of the joint announcement.
