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We've had a very busy first quarter of 2015 at HKEx with the launch of a consultation paper on a closing auction session and volatility control mechanism, our review of submissions to our Concept Paper on weighted voting rights, and many other pressing issues. But along with these tasks, one of our top priorities has been to continue listening to the market and improving Stock Connect. We've built our first bridge to the Mainland, and now we want to make sure traffic can flow efficiently; fortunately, we're starting to see some real tangible results. With the strong market performance over the last few days, I thought now would be a good time for a quick reflection on what has transpired in the last several weeks and what is in our pipeline.
First, we're very pleased to see the increase in Southbound trading, which set another record today (2 April) with turnover of $5.998 billion. It was the third day this week that a new record was set, which indicates that Mainland investors are becoming more interested and comfortable trading Hong Kong-listed shares. In fact, the market capitalisation of companies listed on our exchange also hit a new record today at $27.3 trillion, while on Tuesday (31 March), stock market turnover reached $149.6 billion, the highest since January 2008.
The market will no doubt ebb and flow along with changing investor sentiment, but we should all be confident that we are heading in the right direction overall. Several enhancements have been rolled out in recent weeks to improve Stock Connect, as we promised to do when the scheme launched in November last year. Let me list them here.
First, we are pleased to see that the China Securities Regulatory Commission came out last week with the long anticipated announcement approving Mainland mutual funds to invest in Hong Kong shares. While formally allowing new mutual funds to invest in Hong Kong, its most important significance is that it clears the way for existing mutual funds to begin the process of amending their original investment charters to allow them to use Stock Connect to invest in Hong Kong. This is a great start, but there is more to be done. Since the launch of Shanghai-Hong Kong Stock Connect, we've organised more than 50 investor education seminars for Mainland investors, and just recently introduced a range of market data promotions aimed at meeting the needs of Mainland investors interested in Hong Kong stock market data. We will continue to roll out additional investor education programmes to help familiarise Mainland individual investors with the Hong Kong market, and have some exciting initiatives coming soon.
Secondly, we are also making it easier for international and Hong Kong investors to participate in Northbound trading. On Monday (30 March), we introduced a mechanism that largely resolves international investors' concerns over the Mainland's pre-trade checking requirement, which made some institutional investors reluctant or unable to trade through Stock Connect. Now, investors will only be required to transfer shares they are passing to their broker for settlement after their sell orders are executed, which is similar to how they settle trades of Hong Kong-listed stocks.
Thirdly, an issue that frequently came up was beneficial ownership in A shares held through the nominee structure established under Stock Connect. Under the existing structure, Hong Kong Securities Clearing Company Limited (HKSCC) holds the shares for investors as a nominee holder. Initially, some investors were worried that they would not have proprietary rights over the A shares held through HKSCC. Funds with fiduciary obligations in the US and Europe need to show that they've got good ownership title, and they need to be able to enforce their shareholder rights. We have since clarified the role of HKSCC under the Hong Kong and Mainland China legal and regulatory frameworks and have engaged with the international fund industry, investors and regulators to answer questions and explain the nominee structure. Most investors now accept that they do have beneficial ownership under both Hong Kong law and Mainland law, which eases those concerns. Also, HKSCC recently amended its rules to enable it to provide certificates to A share investors as evidence of their beneficial ownership, and even to help investors take legal action in the Mainland where necessary.
When we launched Shanghai-Hong Kong Stock Connect, we said it would be tweaked and refined over time to make trading through the scheme more convenient and efficient. While the changes I've outlined here have all helped, we can do more. We are now working alongside our counterparts in Shenzhen on the launch of a link with the Shenzhen Stock Exchange, which will open up even more investment opportunities and bring further improvements to the Stock Connect model.
Finally, it's important to keep Stock Connect in perspective. It's easy to get excited about record-breaking days or new links with Mainland exchanges, but these are all part of a much more profound structural change: the gradual but accelerating opening of Mainland China's financial markets. As I've written before, our goal is to work with Mainland authorities to create a multi-asset class Mutual Market that connects Chinese investors with international products, and international investors with Chinese products. The Shanghai and Shenzhen links bring equity products into the Mutual Market, and we aim to have equity derivatives included soon as well. Over time, we believe we can create a space that connects Mainland products with international investors and Mainland investors with international products across multiple asset classes including equities, equity derivatives, commodities, fixed income, and currencies. If international investors want to invest in Mainland products, they'll be able to do it here, and if Mainland investors are interested in international products, HKEx will have those too. This will be a win-win situation for all.
As I have said often, we are bridge builders and the bridges we build will be here for decades, not just months or years. We are now building the first bridges and will continue to improve the access roads, the direction signs and service stations, which will make it easier for people to cross. I am convinced that the traffic will increase significantly over time as investors on both sides of the border become more comfortable and more willing to venture out of their home markets now that new bridges are available, especially as the Mainland is accelerating the opening up of its markets. If China's capital markets one day get included in key global indices, hundreds of billions of dollars will need to be invested into China; and if China's national wealth is one day truly invested, not just sitting in bank accounts earning next to nothing, trillions will be deployed to capital markets both onshore and offshore.
I often get asked: will the bridge you have built become obsolete and useless once China fully opens up? I never really understand this question. If China truly opens up, it will just mean that they allow more bridges to be built and more tunnels to be opened. Yes, some people may then decide to move to the other side altogether, but a lot more will be just as happy to join the party by travelling freely back and forth. As long as our bridges are not more difficult to cross, why would they become obsolete? Especially if we build our bridges at the best locations with the highest traffic flows. Don't forget, the bridge we just built is actually toll-free. Investors on both sides just pay their normal exchange levies and brokerage commissions. There is no separate charge for people to use Stock Connect.
In short, this week's market performance and positive investor sentiment is an encouraging sign that we’re on the right path and we should continue pursuing our vision. But ultimately this is just a start, and there is much more to come.
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