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Premier Li Keqiang announced today (April 10) at the opening ceremony of the Boao Forum mutual stock market access between Hong Kong and Shanghai, implementing the two-way opening up of the capital markets of the two sides. The Hong Kong Special Administrative Region (HKSAR) Government warmly welcomes the decision of the Central Government.
The HKSAR Government also welcomes the announcement jointly made by the China Securities Regulatory Commission and the Securities and Futures Commission that they have approved, in principle, the development of Shanghai-Hong Kong Stock Connect, a pilot programme for establishing stock market trading links between Shanghai and Hong Kong. This pilot programme will allow Mainland investors who satisfy the eligibility criteria to trade for the first time eligible stocks listed on the Stock Exchange of Hong Kong (SEHK) through the Shanghai Stock Exchange (SSE) directly. At the same time, it will also allow Hong Kong and overseas investors to trade for the first time eligible stocks listed on the SSE through the SEHK directly.
Shanghai-Hong Kong Stock Connect follows the decision made at the Third Plenary Session of the 18th Communist Party of China Central Committee to enhance the two-way opening up of the Mainland's capital market and expand the co-operation with Hong Kong by further opening up the market. The government and regulatory authorities of the two sides, together with the SSE, the SEHK, the China Securities Depository and Clearing Corporation Limited and the Hong Kong Securities Clearing Company Limited, have worked closely together on the development of Shanghai-Hong Kong Stock Connect. To launch Shanghai-Hong Kong Stock Connect, the preparatory work will take approximately six months. The Financial Secretary, Mr John C Tsang, said, "Shanghai-Hong Kong Stock Connect will connect the Hong Kong and Shanghai securities markets. It will not only help strengthen the two securities markets, but will also have long-term and strategic significance. I am pleased to see that Hong Kong plays an important role in the two-way opening up of the Mainland's capital market to the world."
Initially, under Shanghai-Hong Kong Stock Connect, all Mainland institutional investors and eligible individual investors (i.e. individuals who hold an aggregate balance of not less than RMB500,000 in their securities and cash accounts) will be accepted to trade eligible stocks listed on the SEHK through the SSE directly. At the same time, all Hong Kong and overseas institutional and individual investors will be accepted to trade eligible stocks listed on the SSE through the SEHK directly. Since Shanghai-Hong Kong Stock Connect is a pilot programme, it will be implemented in a progressive and risk-controllable manner, and cross-border investment will be subject to quotas. The buying of the aforesaid SEHK securities by Mainland investors will be capped at an aggregate net quota of RMB250 billion and a daily net quota of RMB10.5 billion. The buying of the aforesaid SSE securities by Hong Kong and overseas investors will be capped at an aggregate net quota of RMB300 billion and a daily net quota of RMB13 billion. The aforesaid quotas will be subject to consideration of any appropriate adjustment in accordance with the actual operational circumstances.
Mr Tsang said, "This is a mutually beneficial development. For the Mainland, Shanghai-Hong Kong Stock Connect will help increase the participation of institutional investors in the Shanghai securities market, which will promote the further development of the market in a step-by-step manner, enable Mainland investors to invest in overseas markets in an orderly way, enhance the opening up of the Mainland's capital market and promote the internationalisation of the Renminbi (RMB). For Hong Kong, Shanghai-Hong Kong Stock Connect will strengthen the strategic co-operation and interaction between the Hong Kong and the Mainland markets, catalyse the two-way RMB fund flows between the onshore and offshore markets, and further increase the liquidity of the offshore RMB market in Hong Kong, whilst reinforcing and enhancing Hong Kong's position as the premier international financial centre and offshore RMB business centre through this process."
Ends/Thursday, April 10, 2014
Issued at HKT 16:03
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