Hong Kong: A-Shares - Improved settlement model via Special Segregated Account (SPSA)

07.06.2016

Clearstream Banking1 would like to inform customers that, effective

4 July 2016

Customers can settle delivery versus payment (DVP) and safekeep China A-shares by setting up a Special Segregated Account (SPSA) under Shanghai-Hong Kong Stock Connect Program. This enhancement eliminates the need for the pre-delivery of shares and provides a "True DVP" solution2.

Stock Connect facilitates foreign investors’ access to the Chinese market via the Hong Kong Market and makes it possible for non-domestic investors to hold China A-shares without the need to fulfil qualified investment requirements.

Stock Connect is a further step in the opening of the Chinese stock market for foreign investors and goes hand-in-hand with the Chinese government’s approach to establish the Renminbi as an international currency and to liberalise its financial market.

The improved DVP settlement model is part of Clearstream Banking’s ongoing commitment to enhance its settlement services and to provide our international customers with access to RMB-denominated shares that are listed on the Shanghai Stock Exchange (A-shares). This initiative further complements our existing access to Chinese B-shares that are listed on the mainland stock exchange.

Impact on customers

To safekeep China A-shares, customers must open a Special Segregated Account (SPSA). Clearstream Banking will support customers in the account opening process including in the setting up of the SPSA account, acquiring the Investor ID and maintaining the SPSA eligible Executing Brokers.

Morning / afternoon settlement timings will not be applicable via the SPSA model. The free of payment and against payment settlement instruction deadlines will be as follows:

Central European Summer Time (CEST)

InstructionDeadline from 4 July 2016
Receipts free of/against payment11:55 SD
Deliveries free of/against payment10:40 SD

Hong Kong Time (HKT)

InstructionDeadline from 4 July 2016
Receipts free of/against payment17:55 SD
Deliveries free of/against payment16:40 SD

Further information

The Creation Link Guide – Hong Kong and related documentation will be updated in due course.

For further information, customers may contact Clearstream Banking Client Services or their Relationship Officer.
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1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for CBF customers using CreationOnline), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.

2. "True DVP" refers to receiving cash proceeds immediately upon settlement of DVP transaction. Investors must use any of the brokers (Citi Global Markets) who appoint Citi as third party clearer or settlement agent.