Shanghai-Hong Kong Stock Connect Programme - revision

19.11.2014

Note: This announcement first published on 11 November 2014 has been updated to reflect the correct settlement timings in CET.

Effective

17 November 2014

Settlement and custody services for Chinese A-shares will be available to customers and Clearstream Banking1 via the Shanghai-Hong Kong Stock Connect Programme (the “Programme”).

The services will be offered via our existing Hong Kong depository Citibank N.A. (Hong Kong Branch).

Background

The Programme provides securities trading and clearing link to the Hong Kong Exchanges and Clearing Limited (HKEx), the Shanghai Stock Exchange (SSE) and the China Securities Depository and Clearing Corporation Limited (ChinaClear), enabling mutual market access between Mainland China and Hong Kong.

Under the Programme, HKEx and the SSE will establish mutual order-routing connectivity and related technical infrastructure to enable the investors in their respective market to trade designated equity securities listed in the market of the other participants.

Hong Kong and international investors will get direct access to China A-shares listed at the SSE via the Northbound Trading and Mainland Chinese investors will be able to trade eligible securities listed at HKEx via the Southbound Trading.

Restrictions

Please note that home market rules and laws apply for the SSE securities.

Free of payment

As per the existing market infrastructure, market settlement of Chinese A-shares via the Shanghai-Hong Kong Stock Connect Programme will be on a free of payment basis only; DVP instructions will be rejected by HKEx.

Types of transfers

Bridge settlement will not be allowed.

Customers will not be allowed to instruct internal transfers within Clearstream. As stipulated in Article 11 of the China Securities Regulatory Commission (CSRC) Stock Connect Rules, transfers of SSE Securities should be conducted on-exchange only and off-exchange trading is not permitted except in specific circumstamces.2

Pre-funding of account and short-selling

Short-selling and margin trading are not allowed. Customers must ensure that there are sufficient stock holdings with their brokers prior to placing an order in the market. Customers will need to pre-deliver shares to their broker on T-1 or on the morning of Trade date (T). See Settlement details below.

Eligible securities

Eligible shares for the Programme:

  • All constituent stocks of the SSE 180 and 380;
  • All dual-listed shares, that is SSE-SEHK A+H (68).

Trading days

In the initial stage of operation of the Programme, participants can only trade the A-shares on a Hong Kong business day, provided that both markets are open for trading and banking services are available in both markets on the corresponding money settlement days (T+1).

Below is an example illustrating the 2015 holiday arrangement of Northbound trading:

DateHKMainlandSecurities Settlement (for T-day's trades)Money Settlement (for T-1 day's trades)Trading (T-day))
1 Apr (Wed)Business DayBusiness DayYesYesYes
2 Apr (Thu)Business DayBusiness DayNoYesNo
3 Apr (Fri)Public HolidayBusiness DayNoNoNo
6 Apr (Mon)Public HolidayBusiness DayNoNoNo
7 Apr (Tue)Business DayBusiness DayYesYesYes

a. 2 April 2015 (Thu) is a business day for both Hong Kong and Mainland China. However, if customers trade SSE Securities on 2 April 2015, they will not be able to settle money positions on 3 April 2015 (Fri), which is a public holiday in Hong Kong. Hence Shanghai-Hong Kong Stock Connect will not be open for trading SSE Securities on 2 April 2015.

b. There will not be any money settlement for Northbound trades on 7 April 2015 as 6 April 2015 is not open for Northbound trading. However, as CCASS is open for business on 7 April 2015, it will still process money transactions in relation to nominees’ activities with respect to SSE Securities, if any.

Quota

There is an aggregate quota of RMB 300 billion (calculated at the end of each trading day) and a daily quota RMB 13 billion (calculated on a real-time basis).

Settlement details

Settlement window

Please note that there will be two deadlines for the Programme.

  • The Morning Settlement Window (see Settlement deadlines below) is only available to deliver shares from sub-custody banks to counterparties such as brokers. The delivery of shares from brokers to CBL is not allowed. Customers can use the Morning Settlement Window to do the necessary movement from CBL to the brokers for same day trading as short-selling is not allowed.
  • There is no restriction for the Afternoon Settlement Window (see Settlement deadlines below). Customers will be able to move the Chinese A-shares in either direction between CBL and their brokers.

The deadlines shown below are valid provided that the customer's instructions are complete, accurate and eligible for straight-through processing (STP) in CBL and in the local market. Customers must also ensure that any necessary provision is available. If any of these criteria are not met, CBL cannot guarantee timely settlement.

Settlement Deadlines for all Chinese A-shares (CET)

17 November 2014 - 28 March 2015

 

InstructionProvisioningDeadline for receipt of valid instructionExpected settlement results
startendfromtovalue
AP=Against payment FOP=Free of payment SD=Settlement date

Instruction morning settlement window

Chinese A-Shares moving from CBL to brokers and custodians

DeliveriesFOP20:00
SD-2
22:00
SD-1
22:00
SD-1
22:00
SD-1
01:45
SD

Instruction afternoon settlement window

Chinese A-Shares moving between brokers and custodians

ReceiptsFOP20:00
SD-2
06:55
SD
06:55
SD
06:55
SD
13:45
SD
DeliveriesFOP20:00
SD-2
06:55
SD
06:55
SD
06:55
SD
13:45
SD

 

Settlement Deadlines for all Chinese A-shares (local time)

InstructionProvisioningDeadline for receipt of valid instructionExpected settlement results
startendfromtovalue
AP=Against payment FOP=Free of payment SD=Settlement date

Instruction morning settlement window

Chinese A-Shares moving from CBL to brokers and custodians

DeliveriesFOP03:00
SD-1
05:00
SD
05:00
SD
05:00
SD
08:45
SD

Instruction afternoon settlement window

Chinese A-Shares moving between brokers and custodians

ReceiptsFOP03:00
SD-1
13:55
SD
13:55
SD
13:55
SD
20:45
SD
DeliveriesFOP03:00
SD-1
13:55
SD
13:55
SD
13:55
SD
20:45
SD

Corporate actions

HKSCC will advise CCASS participants of all general functions. Investors in SSE securities, via the Programme will not be able to attend meetings as a proxy.

Further information

More details will be available in the Creation Link Guide, the Market Profile and Disclosure Requirements for the Hong Kong market at launch on the Clearstream website.

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 AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500 (CBF), and 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 (CBL).

2. For more information visit the website here.