On November 25, 2016, China Securities Regulatory Commission (CSRC) and the Securities and Futures Commission of Hong Kong (SFC) jointly approved the launch of Shenzhen-Hong Kong Stock Connect, which will commence operation on 5 December 2016.
On the same day, Shenzhen Stock Exchange (SZSE) and China Innovation Market Service Company Limited, a wholly-owned subsidiary of SZSE that will provide securities trading service for the connect, announced the list of southbound trading stocks, trading calendar arrangement, list of the first batch of members and other trading participants that are included in the connect and the designated information disclosure websites. They also required these members and trading participants to further enhance technical readiness for the launch of Shenzhen-Hong Kong Stock Connect.
The eligible trading list of 417 southbound stocks published by SZSE includes 100 constituents of Hang Seng Composite LargeCap Index, 193 constituents of Hang Seng Composite MidCap Index, 95 constituents of Hang Seng Composite SmallCap Index, and 29 A+H stocks that are not included in the above indices, representing 87% of the total market capitalization of all the stocks listed on the Stock Exchange of Hong Kong Limited (SEHK) and 91% of SEHK’s average daily trading value. The eligible trading list of 881 northbound stocks as announced by SEHK on the same day includes 267 SZSE Main Board-listed stocks, 411 SME Board-listed stocks and 203 ChiNext-listed stocks, representing 71% of the total market capitalization of Shenzhen A-share market and 66% of SZSE’s average daily trading value. The lists of southbound and northbound stocks are now available in the relevant sections of SZSE and SEHK websites respectively for easy access by market participants and will be updated on a timely manner.
The 121 members and other trading participants published by SZSE included 94 members, 27 fund companies and other trading participants. According to an officer from SZSE, in order to ascertain market readiness and urge securities companies to speed up preparation, the CSRC, SZSE and China Securities Depository and Clearing Corporation Limited (CSDC) have earlier completed on-the-spot inspections of selected securities companies in Beijing, Shanghai and Shenzhen and found that securities companies have put in place all the preparations in terms of trading, clearing, technical systems, investor education and investor suitability management. On November 11, the technical systems of SZSE and CSDC first went live. So far, the technical systems of selected members and other trading participants have also been put into operation and are ready for launch.
Next, SZSE will, under the unified arrangement of CSRC and in collaboration with relevant parties concerned, conduct final pre-launch preparations and urge its members to proceed with investor education and service, investor suitability management and risk disclosure in order to ensure the smooth launch and safe operation of Shenzhen-Hong Kong Stock Connect.
