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Q: For some HKEX-listed companies with a weighted voting rights (WVR) structure (hereinafter as “companies with a WVR structure”) such as BILIBILI-W (09626) which have already had or plan to have their secondary listings converted into primary listings on the HKEX, could they be included into the eligible stocks for southbound trading under the Shenzhen-Hong Kong Stock Connect after the conversion? If yes, when would they be included?
A: According to relevant business rules of the Implementation Measures of Shenzhen Stock Exchange for the Shenzhen-Hong Kong Stock Connect (hereinafter as the Implementation Measures), after converting their secondary listings on the HKEx into primary listings, companies with a WVR structure will be inspected on the inspection day and those that meet the conditions specified in Articles 65, 66 and 67 of the Implementation Measures will be included into the eligible stocks for southbound trading under the Shenzhen-Hong Kong Stock Connect.
China Innovation Market Service Company Limited issued the Notice on Relevant Arrangements for Including Relevant Companies into the Eligible Stocks for Southbound Trading Under the Shenzhen-Hong Kong Stock Connect (hereinafter as the Notice) on October 7, which has laid out the arrangements for including companies with a WVR structure after their secondary listings are converted into primary listings. Take BILIBILI-W for example. After its conversion into a primary listing officially became effective on 3 October 2022, the company may be inspected to see if it could be included into the southbound trading under the Shenzhen-Hong Kong Stock Connect according to the Implementation Measures. Since the company has been listed on the HKEX for six months and for 20 HKEX trading days after that, which is the second circumstance as described in the Notice, the inspection day shall be the second HKEX trading day (March 2023) prior to the next effective date of the periodic adjustment of constituent stocks of the Hang Seng Composite Index. At that time, SZSE will inspect the company according to the Implementation Measures, and if it meets relevant conditions, we will include it into the eligible stocks for southbound trading under the Shenzhen-Hong Kong Stock Connect.
Next, SZSE will keep a close watch on the changes in the listing statuses of companies with a WVR structure on the HKEX and include companies with a WVR structure that meet relevant conditions into the eligible stocks for southbound trading under the Shenzhen-Hong Kong Stock Connect, so as to better meet investors’ needs and firmly promote the high-standard two-way opening up of the capital market.
