Still no Stock Connect date, but regulators strike accord

Official silence on a start date for the Shanghai-Hong Kong Stock Connect persists, but the regulators of China and Hong Kong have struck an agreement on co-operation.

Expectations were high that a start date for the Shanghai-Hong Kong Stock Connect would be announced in a press conference held by the China Securities Regulatory Commission last Friday afternoon. It wasn’t. The reason for the continued delay is also unknown.

The reason could be due to technical obstacles, or because China’s premier Li Keqiang has been travelling in Europe. Also, it may not be inconceivable that the hiatus might contain some political repercussions connected to Hong Kong’s ongoing protests.

However, Hong Kong’s Securities and Futures Commission (SFC) and the CSRC have entered into a memorandum of understanding strengthening regulatory and enforcement cooperation under the new programme.

The accord provides for the sharing of information about potential or suspected wrongdoing in the Stock Connect. It establishes a commitment and a process for joint investigations and ensures that complementary enforcement action can be taken where there is wrongdoing in both jurisdictions.

Qiumei Yang, the CEO of industry body ICI Global Asia Pacific, said that the agreement offered investors greater confidence that regulators would work together to protect market integrity and investor interests.