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HKEX and Mainland exchanges agree on adjusting inclusion arrangements for eligible securities under Stock Connect’s Southbound trading

Mutual Market
18 Jul 2018

The Stock Exchange of Hong Kong, a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), reached a consensus yesterday (Tuesday) with the Shanghai and Shenzhen stock exchanges on adjusting the inclusion arrangements for eligible securities for Stock Connect’s Southbound trading.  This followed a productive meeting of the three exchanges. 

The agreement is comprised of three points:

  1. The three exchanges share the objective of enhancing and improving Stock Connect, with the intention to continue to grow and develop the scheme in a stable manner over time. 

  2. The meeting acknowledged that as Mainland investors are not yet familiar with weighted voting rights (WVR) companies, there is a need to consider the maturity and regulatory practices of the two markets when including WVR companies in the list of eligible securities for Southbound trading under Stock Connect. An initial Special Stability Trading Period (SSTP) will be required for Hong Kong-listed WVR companies, following which the WVR shares will be included in Southbound trading under Stock Connect if such shares are otherwise eligible for inclusion under the current Stock Connect rules.

  3. The three exchanges have agreed to set up a joint working group to formulate the specific programmes and supplementary rules for the inclusion of WVR companies in Stock Connect trading as soon as possible.



Updated 03 Dec 2018