12.02.2020

Hong Kong Stock Connect Expands Eligible Stocks

To further refine interconnectivity mechanisms, the Shenzhen Stock Exchange (SZSE), the Shanghai Stock Exchange (SSE) and the Hong Kong Exchanges and Clearing Limited (HKEX) have reached a consensus on the following arrangements for expanding the scope of stocks eligible for trading under the Shenzhen-Hong Kong Stock Connect and the Shanghai-Hong Kong Stock Connect:

1. Arrangement of including stocks on the Science and Technology Innovation Board in the scope of stocks for trading under the Shenzhen-Hong Kong Stock Connect and the Shanghai-Hong Kong Stock Connect

Earlier, SZSE, SSE and HKEX reached a consensus on including stocks of A+H listed companies on the Science and Technology Innovation Board in the scope of stocks eligible for trading under the Shenzhen-Hong Kong Stock Connect and the Shanghai-Hong Kong Stock Connect. Recently, after further consultation, the three exchanges decided that the stocks on the Science and Technology Innovation Board that belong to constituent stocks of SSE 180 Index or SSE 380 Index or A shares of A+H listed companies will be transferred into the scope of stocks for northbound trading according to current regulations on the Shanghai-Hong Kong Stock Connect, and the corresponding H shares will be transferred into the scope of stocks for southbound trading according to the current regulations on the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect.

What’s more, as the Science and Technology Innovation Board implements investor suitability management, investors who buy and/or sell stocks on the Science and Technology Innovation Board for northbound trading will be limited to professional institutional investors defined by relevant Hong Kong rules. Relevant rules are to be approved by regulators in Chinese mainland and Hong Kong.

Next, SZSE, SSE and HKEX will actively advance relevant business and technological preparations. The foregoing stocks on the Science and Technology Innovation Board are expected to be included in the scope of stocks eligible for trading under the Shenzhen-Hong Kong Stock Connect and the Shanghai-Hong Kong Stock Connect in early 2021 after relevant market preparations are completed.

2. Arrangement of including stocks of biotech companies listed in Hong Kong in the scope of stocks for southbound trading

SZSE, SSE and HKEX unanimously agreed that stocks of biotech companies listed according to Chapter 18A of the Main Board Listing Rules of HKEX that belong to constituent stocks of the Hang Seng Composite Index or H shares of A+H listed companies on SZSE, SSE and HKEX will be transferred into the scope of stocks for southbound trading according to current regulations on the Shenzhen-Hong Kong Stock Connect and the Shanghai-Hong Kong Stock Connect (stocks of biotech companies that belong to H shares of A+H listed companies on the Science and Technology Innovation Board will be included in the scope of stocks for southbound trading as the foregoing stocks on the Science and Technology Innovation Board).

Next, SZSE, SSE and HKEX will actively promote relevant market preparations. The foregoing stocks of biotech companies are expected to be included in the scope of stocks for southbound trading within a month beginning on the date of issuance of this announcement. Biotech companies that don’t have the “B” mark at the end of their stock names and are already stocks for southbound trading on the date of issuance of this announcement will not be affected.

In future, SZSE, SSE and HKEX will continue to cooperate closely to optimize interconnectivity mechanisms and promote coordinated, stable, and healthy development of the capital markets in Chinses mainland and Hong Kong.

Source: HKEX

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