Asian authorities up Stock Connect daily quotas

Regulators in China and Hong Kong agree to increase the daily quotes for both Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programmes.

Financial regulators in Hong Kong and China have increased the daily quotas under the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect initiatives in Asia.

The new daily quota for each of the northbound trading links will be RMB52 billion and RMB42 billion of the southbound trading links.

Hong Kong’s Securities and Futures Commission (SFC) and the China Securities Regulatory Commission (CSRC) said they will work closely on implementing the agreed daily quotas effective from 1 May this year.

“The increase in the daily quotas will facilitate investors’ access to Hong Kong and Mainland stock markets and promote the future development of mutual market access,” said Ashley Alder, the SFC’s chief executive.

The Shanghai-Hong Kong Stock Connect launched in November 2014 and the Shenzhen-Hong Kong Stock Connect was established two years after. The links were created to improve the regulated trading environment and to open up Chinese markets to global investors.

Hong Kong Exchanges and Clearing (HKEX) chief executive, Charles Li, welcomed the regulators decision to increase the quotas to keep up with demand and respond to the markets’ needs.

Li added the initiative “has continued to gain momentum as the world’s most effective mutual market access programme. We are committed to working with our regulators and business partners to ensure that Stock Connect will continue to be effective and operate smoothly”.

The Stock Connect programme has sparked discussion of a possible similar trading link between London in the UK and Shanghai in China. However, news of a potential launch was short-lived following regulatory and technical difficulties, and an overall lack in interest and benefits to such a deal.