On August 11, 2023, in order to further deepen the Mainland-Hong Kong Stock Connect program (hereinafter referred to as the Stock Connect program), and promote the joint development of capital markets in both regions, the China Securities Regulatory Commission (CSRC) and the Hong Kong Securities and Futures Commission (SFC) issued a joint announcement, declaring their consensus on promoting the inclusion of block trading (manual trades) in the Stock Connect program.
Block trading (manual trades) is an important trading method in both the Mainland and Hong Kong markets. Implementing this trading method can further improve trading efficiency and avoid unnecessary impact on prices in the auction market. The current Stock Connect program only supports auction trading. The inclusion of block trading (manual trades) in the future will further enrich the trading methods of the Stock Connect program, enhance trading convenience for investors, especially professional institutions, in both regions, and contribute to further enhancing market liquidity, market activity and price discovery function, thereby promoting the high-quality development of capital markets.
Since the launch of the Shanghai-Hong Kong Stock Connect in 2014, under the unified arrangement of the CSRC, the Shanghai Stock Exchange (SSE) has continuously improved trading arrangements and expanded the scope and variety of eligible securities, receiving extensive attention and recognition from the market. As of the end of July 2023, the Shanghai Stock Connect program has recorded a net inflow of RMB 1.02 trillion yuan, with a total turnover of RMB 50.57 trillion yuan. The Hong Kong Stock Connect program under the Shanghai-Hong Kong Stock Connect has recorded a net inflow of RMB 1.22 trillion yuan, with a total turnover of RMB 17.19 trillion yuan. Currently, the Shanghai-Hong Kong Stock Connect program operates smoothly with active trading, making it an important channel for Mainland and Hong Kong investors to participate in each other's markets.
Moving forward, under the coordinated guidance of the CSRC, the SSE will adhere to the principle of seeking progress while ensuring stability, collaborate with relevant parties, comprehensively and systematically analyze the differences between the markets in both regions, study the business, technology, and regulatory arrangements related to block trading, and develop an implementation plan for the inclusion of block trading (manual trades) in the Stock Connect program with the least delay, based on fully studying opinions from the market. The SSE will continue to optimize and improve the Stock Connect program, contributing to the realization of high-standard, two-way opening up of the capital markets.
