The China Securities Regulatory Commission (CSRC) and Hong Kong’s Securities and Futures Commission (SFC) have given their blessing to a new trading link between mainland China and Hong Kong.
Following on the heels of Shanghai-Hong Kong Stock Connect, which launched in 2014, the CSRC and SFC earlier this week approved in principle a new mutual stock market access deal between the markets in Shenzhen and Hong Kong.
The new Shenzhen-Hong Kong Stock Connect will be established by the Shenzhen Stock Exchange, The Stock Exchange of Hong Kong Ltd., China Securities Depository and Clearing Corporation Ltd. and Hong Kong Securities Clearing Company Ltd.
As with the Shanghai-Hong Kong Stock Connect, the new arrangement will facilitate mutual access to trading on one another’s markets for investors and brokers, under the existing laws, regulations, and operating models governing trading and clearing in each market.
The CSRC and the SFC have also agreed to include exchange-traded funds (ETFs) under the mutual market access schemes; and, they have also agreed to jointly study the possible introduction of other financial products.
The formal launch of Shenzhen-Hong Kong Stock Connect will happen once the necessary rules and systems have been finalized, all regulatory approvals have been granted, and market participants have prepared their systems, which is expected to take approximately four months.