HKEX launches dual counter model and market making programme to expand use of Renminbi internationally

New offering will enable mainland investors to trade Renminbi (RMB) stocks listed in Hong Kong using their onshore RMB.

Hong Kong Exchanges and Clearing (HKEX) has launched its new Hong Kong Dollar (HKD)-Renminbi (RMB) dual counter model and a dual counter market making programme in its securities market – in a bid to expand trading of RMB-denominated Chinese stocks.

The move comes as part of HKEX’s efforts to enable mainland investors to trade RMB stocks listed in Hong Kong using their onshore RMB.

Following the launch, 24 Hong Kong-listed companies will trade and transact as dual counter securities, offering HKD as well as RMB counters.

Nine exchange participants have also joined the dual counter market making programme as market makers.

All shares of the same securities in the two trading counters will be completely interchangeable between counters, according to HKEX.

“The ongoing internationalisation of the RMB will be one of the defining characteristics of global markets in the next decade, and at HKEX we are delighted to today be taking another step forward in building a liquid and accessible RMB ecosystem,” said Nicolas Aguzin, chief executive of HKEX.

“The launch of the dual counter initiative is the latest in our broad suite of RMB products, providing investors with more choice and companies with another channel to tap the Hong Kong offshore RMB pool.”

Designated shares listed in HKD and RMB counters are able to trade at settle in RMB or HKD under the new model. According to HKEX, dual counter market makers for eligible shares offer continuous buy and sell quotes for securities in the RMB counter, providing liquidity for HKD-RMB dual counter trading, alongside minimising price discrepancies between the two counters.

HKEX’s new model will support the next phase of development to allow investors in Mainland China to trade Hong Kong-listed RMB securities through Southbound Stock Connect – the mutual market access programme between the capital markets of mainland China and Hong Kong.