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Today, the China Securities Regulatory Commission (CSRC) and the Securities and Futures Commission of Hong Kong issued a Joint Announcement, which in principle approved the further expanding the scope of eligible stocks under Stock Connect, marking an important result newly achieved in the expansion of pragmatic cooperation between the capital markets in the Mainland and Hong Kong.
According to the arrangement of the Joint Announcement, the constituent stocks of the Shanghai Stock Exchange (SSE) A-share Index with a market value of 5 billion yuan or above that meet liquidity criteria would be included in Shanghai-Hong Kong Stock Connect to replace the original constituent stocks of the SSE 180 Index and SSE 380 Index, while the A shares of the A+H shares would still be included in line with the existing arrangement. Based on the current scope, the Hong Kong Stock Connect would include eligible stocks of primary-listed foreign companies that are constituents of Hang Seng Composite SmallCap Index and Hang Seng Composite Index with a market value of 5 billion HK dollars or above. With the scope expansion, the Shanghai Stock Connect will include SSE-listed stocks more extensively to provide foreign investors with more growth-oriented and innovative asset allocation options and attract foreign capital to the market. While the Hong Kong Stock Connect would include foreign companies to further support Hong Kong in enhancing its attractiveness to international corporations.
As an important step to implement the Report to the 20th CPC National Congress on promoting high-standard opening up, the expansion of scope of eligible stocks under Stock Connect is of positive significance in facilitating cross-border investment activities of domestic and foreign investors and advancing the coordinated development of the capital markets of the Mainland and Hong Kong. Next, under the unified deployment of the CSRC, the SSE will adhere to the general principle of pursuing progress while ensuring stability and work with stakeholders, such as Hong Kong Exchanges and Clearing Limited, China Securities Depository and Clearing Corporation Limited, Hong Kong Securities Clearing Company Ltd. to get ready for business and technology. In addition, the SSE will announce specific arrangements on selection conditions, adjustment mechanisms and implementation time for underlying stocks expansion as soon as possible to fully ensure the smooth implementation of the expanding scheme.
