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Shanghai-Hong Kong Stock Connect to launch next week

BBR Staff Writer Published 11 November 2014

The Chinese regulators have approved the launch of the long-awaited stock market access between Hong Kong and mainland China.

Scheduled to be launched by Stock Exchange of Hong Kong Limited, Shanghai Stock Exchange, China Securities Depository and Clearing Corporation, and Hong Kong Securities Clearing, the Shanghai-Hong Kong Stock Connect enables Chinese and Hong Kong investors to trade a specified range of listed stocks in their respective markets through local securities companies.

Starting 17 November, the cross-border trading venture will provide global investors with access to Chinese stocks from Hong Kong, resulting in $3.8bn worth of trades a day.

The system was originally expected to start operations in October, but was delayed for reasons unknown.

Hong Kong Monetary Authority chief executive Norman Chan said: "This marks an important milestone in the liberalisation of the Mainland's capital account, allowing overseas investors to invest in the Mainland A-share market through Hong Kong, and Mainland investors to trade Hong Kong shares through Shanghai.

"The linking of the Hong Kong and Shanghai stock markets will also propel the development of offshore renminbi (RMB) business in Hong Kong to new heights."

HKMA has already committed to offer intraday RMB funds of up to RMB10bn ($1.6bn) to authorized institutions participating in RMB business in Hong Kong.