| What is Shanghai-Hong Kong Stock Connect？ | |
|---|---|
| Shanghai-Hong Kong Stock Connect is a securities trading and clearing links programme for establishing mutual stock market access between Mainland China and Hong Kong. The mutual order-routing connectivity and related technical infrastructure established by The Stock Exchange of Hong Kong Limited (SEHK) and Shanghai Stock Exchange (SSE) will enable investors in their respective markets to trade designated equity securities listed in the other’s market. |
| Eligible investors and stocks | |
|---|---|
| Eligible investors︰ All Hong Kong and overseas investors are allowed to trade SSE Securities through Shanghai-Hong Kong Stock Connect |
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| Eligible stocks： | |
| Constituent Stocks： | SSE180*, SSE380* |
| Dual Listing stocks | SSE-listed A shares which have corresponding H shares listed on SEHK |
| * Except which under risk alert and which are not traded in RMB | |
| Shanghai Stock Exchange 180 Index (SSE 180) The Shanghai Stock Exchange 180 A-Share Index is a free float-weighted index. The index tracks the daily price performance of the 180 most representative A-share stocks listed on the Shanghai Stock Exchange. |
| Shanghai Stock Exchange 380 Index (SSE 380) The SSE 380 Index, consisting of top 380 companies in terms of their size, liquidity, growth potential and profitability excluding those in SSE 180 Index, is positioned as an emerging blue-chip index enjoying good growth prospect and aims to mirror the overall performance of an array of medium-sized emerging blue-chip companies with great growth potential and strong profitability. |
| Trading Hours | |
|---|---|
| Northbound trading will follow SSE trading hours. However, SEHK will accept Northbound orders from exchange participants five minutes before the Mainland market session opens in the morning and in the afternoon. |
| SSE Trading Session | SSE Trading Hours | Time for Exchange Participants to input Northbound Order |
| Opening Call Auction | 09:15-09:25 | 09:10-11:30 |
| Continuous Auction (Morning) | 09:30-11:30 | |
| Continuous Auction (Afternoon) | 13:00-15:00 | 12:55-15:00 |
| During 09:20-09:25, SSE will not accept order cancellation； During 09:10-09:15; 09:25-09:30 and12:55-13:00: Orders and order cancellations can be accepted by SEHK but will not be processed by SSE until SSE’s market open； Orders that are not executed during the opening call auction session will automatically enter the continuous auction session |
| Settlement Cycle | Securities settlement: Trade day (T) Money settlement: T + 1 |
| Currency | Trading and settlement: RMB |
| Price Limit ±10% on previous closing price Any orders with price beyond the price limit will be rejected The upper and lower price limit will remain the same within a trading day |
| Other Rules No day trades Only limit orders are accepted throughout the day. (SSE limit orders can be matched at the specified price or a better price) |
| Levies Arrangement |
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| 1. Are Hong Kong and overseas investors required to pay stamp duty on their transactions in SSE Securities？(Update on 14/11/2014) |
| According to the notice jointly issued by the Ministry of Finance (MOF), the State Administration of Taxation (SAT) and CSRC on 14 November 2014 at http://szs.mof.gov.cn/zhengwuxinxi/zhengcefabu/201411/t20141114_1158461.html , Hong Kong and overseas investors are required to pay stamp duty arising from the sale and purchase of SSE Securities and the transfer of SSE Securities by way of succession and gift in accordance with existing Mainland taxation regulations. |
| 2. Are Hong Kong and overseas investors required to pay taxes on cash dividend and / or bonus shares of SSE Securities？(Update on 14/11/2014) |
| According to the notice jointly issued by MOF, SAT and CSRC on 14 November 2014, Hong Kong and overseas investors are required to pay tax on cash dividend and/or bonus shares of SSE Securities at a standard rate of 10%, which will be withheld and paid to the relevant tax authority by the respective listed companies. For those investors whose residing country has entered into a tax treaty with China which allows them enjoying a lower dividend tax rate, the investors may apply to the tax authority for a refund of the differences. The tax rate and the dividend rate will be available via the existing “Enquire Announcement Information” function. |
| 3. Are Hong Kong and overseas investors required to pay capital gains tax or business tax when they trade SSE Securities？(Update on 14/11/2014) |
| Hong Kong and overseas investors are exempted from paying both capital gains tax and business tax, when they trade SSE Securities via Shanghai-Hong Kong Stock Connect. |
| What will be the trading arrangement for SSE Securities under severe weather conditions? |
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| 1.If SSE is suspended due to bad weather, there will be no trading on the Northbound Trading Link and Hong Kong investors and Exchange Participants will be informed by the SEHK |
| 2.If typhoon signal number 8 (or above) and / or black rainstorm warning is issued in Hong Kong before Hong Kong market opens, Northbound trading will not open. If the signal / warning is subsequently discontinued on the same day, arrangement for the resumption of Northbound trading will follow that for the SEHK market (detailed arrangement is available on the HKEx website at http://www.hkex.com.hk/eng/market/typhoons/tradingarrangement.htm |
| 3.If typhoon no 8 (or above) is issued in Hong Kong after Hong Kong market opens but before SSE market opens, Northbound trading will not open (between 9a.m. and 9:15 a.m.) |
| 4.If typhoon signal number 8 (or above) is issued in Hong Kong after SSE market has opened, trading will continue for 15 minutes during which order input and cancellation will be allowed. After 15 minutes, only order cancellation is allowed until SSE market is closed. |
| Scenarios | Northbound Trading of SSE Securities | Current arrangement of HK market |
| T8 / Black rainstorm issued before HK market opens (i.e. 9:00 a.m.) | Not Open | Not Open |
| T8 issued between 9:00 a.m. and 9:15 a.m. | Not Open | Trading will be postponed after the pre-Market Opening Period |
| T8 issued after SSE market opens | To be announced | Trading will continue for 15 minutes after T8 issuance15 |
| Black rainstorm issued after HK market opens (i.e. 9:00 a.m.) | Business as usual | Business as usual |
| T8 / Black rainstorm discontinued before 12:00 noon | Trading resumes after 2 hours | Trading resumes after 2 hours |
| T8 / Black rainstorm discontinued after 12:00 noon | Not open | Not open |
| For details of the existing typhoon / rainstorm procedure for Hong Kong market, please refer to the HKEx website: |
| http://www.hkex.com.hk/eng/market/typhoons/trading_arrangements_during_typhoon_and_black_rainstorm.htm |
| Are we protected by the investor compensation fund？ |
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| Hong Kong investors participating in the Shanghai-Hong Kong Stock Connect through SEHK Participants will continue to be protected by Hong Kong laws. Similar to any overseas investment which involves a sub-custody arrangement, investors will also be facing the counterparty risks of any additional parties along the value chain, and in this case ChinaClear which is the central registration company in the Mainland. Similarly for the trading and settlement activities, Hong Kong investors will continue to deal with SEHK Participants and be protected by the SFO. It should however be noted that the current Investor Compensation Fund will not cover any Northbound activities. |