Shenzhen-Hong Kong Stock Connect gets launch date

Shenzhen-Hong Kong Stock Connect received approval from the Chinese government in August this year.

The Shenzhen-Hong Kong Stock Connect trading link will launch on 5 December following approval from regulators.

The Securities and Futures Commission and the China Securities Regulatory Commission have approved the launch date and all conditions under the agreement have been satisfied.

The Chinese government formally approved the trading link in August in a bid to create a better regulated trading environment.

Hong Kong Exchanges and Clearing Limited chief executive Charles Li welcomed the decision.

"I want to thank everyone for their support to ensure a smooth launch of Shenzhen Connect," said Li.

“Shenzhen Connect will open up another mainland market for international investors, give investors on both sides of the boundary more choices and enhance access to the mainland’s stock market through our market and to our market through the mainland market."

Launching Shenzhen alongside the existing Shanghai-Hong Kong venture, which launched in November 2014, is aimed at building a more extensive capital market and capitalising on the geographical advantages of Shenzhen.

It is also hoped that the venture will allow investors to experience increased economic benefits from both mainland China and Hong Kong, increase cooperation between the two and consolidate Hong Kong’s position in the financial industry.

Speaking to Global Custodian - The TRADE’s sister publication - in August, Florence Lee, head of China sales and business development, EMEA, securities services at HSBC, said the Shenzhen link represented a further sign of China’s markets becoming more liberal.

“In the past, no matter who you were, you would have to go through a very lengthy approval process in China with a lot of documents needing to be submitted to Chinese authorities,” said Lee.

“When the Stock Connect was launched, all an overseas investor has to do is go to Hong Kong, find a broker, set up a brokerage account in Hong Kong and start trading through the Stock Connect programme. The new development now finally includes the other stock exchange in China, the Shenzhen, and in terms of stock selection this will give a manager much wider scope."