The Hong Kong Exchanges and Clearing (HKEX) has welcomed the Securities and Futures (SFC) and the China Securities Regulatory Commissions’ (CSRC) move to add up to 10 trading days to northbound and southbound Stock Connect each year.
The Stock Connect allows qualified mainland China investors to access eligible Hong Kong shares – southbound – as well as Hong Kong and overseas investors to trade eligible A shares – northbound – subject to a certain amount of daily quota.
Currently, northbound trading on Stock Connect would be closed on the trading day before a Hong Kong public holiday, because banking services aren’t available in the Hong Kong market.
The new arrangement will mean that activity in both directions on Stock Connect will take place on all trading days that are mutual to the Hong Kong and mainland China markets.
The Commissions said that the first additional northbound trading day will be 25 May, followed by 20 October and 22 December for this year.
“The launch of these Stock Connect trading calendar enhancements is great news for the market, providing more trading opportunities to international and mainland investors alike,” said Wilfred Yiu, co-chief operating officer and head of equities at HKEX.
He added, “We look forward to working with all our stakeholders and regulators in delivering these enhancements, as we continue to build Hong Kong’s role as a global super connector.”
Hong Kong has been ramping up efforts to revitalise its Covid hit economy and consolidate its position as one of the most important international financial hubs.
Last week it rolled out a raft of measures to bolster its position as a link between the East and West.
In his 2023-24 budget, Hong Kong Financial Secretary Paul Chan Mo-po said that the stock exchange operator will study proposals to optimise its trading mechanism.
He added, that after consulting the market, the HKEX will introduce a listing regime for advanced technology firms in the first quarter of 2023 to expand the channel for issuers.
The China’s securities regulator also softened its curbs on local companies seeking initial public offerings overseas.
The watchdog said that non People’s Republic of China (PRC) companies operating primarily in China must file with the CSRC to list offshore.
The rules apply to so-called red chip offerings in Hong Kong and the variable interest entities (VIEs) that have been widely used to list tech companies in the US and Hong Kong.
Foreign listings will also need the approval of other supervisory agencies, such as the Cybersecurity Administration of China, especially if they implicate such areas as national security or data management.
In addition, companies already listed abroad now have to register with the CSRC.
Until 2021, China had been an active participant but activity shut down as fears over data security allegedly escalated.
However, recently China has been more welcome and agreed last December to allow the US Public Company Accounting Oversight Board “complete access” to the audit papers of US-listed Chinese companies.
©Markets Media Europe 2023
