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Shanghai-Hong Kong Stock Connect

Introduction

Shanghai-Hong Kong Stock Connect is a securities trading and clearing links programme developed by Hong Kong Exchanges and Clearing Limited (HKEX), the Shanghai Stock Exchange (SSE) and China Securities Depository and Clearing Corporation Limited (ChinaClear), aiming to achieve a breakthrough in mutual market access between the Mainland and Hong Kong.

 

Trading Arrangement

Northbound Trading: Hong Kong and overseas investors may buy stocks listed in Shanghai within the scope of Shanghai-Hong Kong Stock Connect.

Southbound Trading: Mainland investors may buy stocks listed in Hong Kong within the scope of Shanghai-Hong Kong Stock Connect.

Illustration of Order Flow

 

Eligible Investors

All Hong Kong and overseas individual and institutional investors are eligible to participate in northbound trading.

 

Eligible Stocks

Index components

SSE 180 Index*, SSE 380 Index*

Stocks listed in both Shanghai and Hong Kong

A shares of companies listed on both SEHK (H Share) and SSE (A Share)*

* Excluding stocks on the risk alert board and stocks not traded in Renminbi.

 

Investment Quota Restriction

Aggregate Quota

RMB300 billion

▪ Calculated at the end of each trading day

▪ Balance: Aggregate Quota – aggregate buy trades + aggregate sell trades

If Aggregate Quota Balance < Daily Quota:

▪ Suspend buy order input for the next trading day

If Aggregate Quota Balance increases to Daily Quota level:

▪ Resume buy order input for the next trading day

Daily Quota

RMB13 billion

▪ Calculated real-time during trading hours

▪ Balance: Daily Quota – Buy Orders + Sell Trades + Adjustments (e.g. Buy Order cancelled, Buy Order rejected by SSE, Buy Order executed at a better price)

If Daily Quota balance ≤ 0:

▪ During opening call auction (Pre-opening): Reject new buy orders until daily quota balance becomes positive (e.g. due to Buy Order cancellation)

▪ During continuous auction (continuous trading): Suspend buy order for the remaining of the day

▪ Buy orders already input before suspension will not be affected

 

Trading Session

SSE Trading Session

SSE Trading Hours

Time for SEHK Exchange Participants to input Northbound orders

Opening Call Auction

09:15 - 09:25

09:10 - 11:30

Continuous Auction (Morning)

09:30 - 11:30

Continuous Auction (Afternoon)

13:00 - 15:00

12:55 - 15:00

  • During the period from 09:20 a.m. to 09:25 a.m., SSE will not accept order cancellation;
  • During the period from 09:10 a.m. to 09:15 a.m., from 09:25 a.m. to 09:30 a.m. and from 12:55 p.m. to 01:00 p.m., orders and order cancellations can be accepted by SEHK but will not be processed by SSE until SSE’s market opens;
  • Orders that are not executed during the opening call auction session will automatically enter the continuous auction session.

Shanghai-Hong Kong Stock Connect operates only on trading days for both Shanghai and Hong Kong markets. If the fund settlement day is not a trading day in Hong Kong, Northbound Trading will be closed on the previous trading day.

 

Mainland China

Hong Kong

Open for Northbound Trading?

Day 1

Business Day

Business Day

Yes

Day 2

Business Day

Business Day

Not open

Settlement Cycle

Hong Kong market closes

Day 3

Business Day

Holiday

Not open

Hong Kong market closes

Day 4

Holiday

Business Day

Not open

Mainland market closes

 

Trading Rules

Trading Currency

The stocks in Northbound Trading are traded and settled in Renminbi by Hong Kong and overseas investors.

Settlement Cycle

Stock settlement: Trading day (T)

Fund settlement: T+1

Swing trading (Day trading)

Not allowed

Hong Kong and overseas investors who buy SSE Securities on T-day can only sell the stocks on and after T+1 day.

Board Lot

All SSE Securities are subject to the same trading board lot size, which are 100 shares. (Buy orders must be placed in board lots)

Odd lot trading is only available for sell orders and all odd lots should be sold in one single order.

It is common that a board lot buy order may be matched with different odd lot sell orders, resulting in odd lot trades.

SSE Price Limit

Price limit of ±10% based on previous closing price.

Any orders with a price beyond the price limit will be rejected by SSE.

The upper and lower price limits will remain the same on the same day.

 

Taxes and Fees

Taxes and fees related to northbound trades under Shanghai-Hong Kong Stock Connect:

Fees

Rate

Charged by

Handling Fee

0.00487% of the consideration of a transaction per side

SSE

Securities Management Fee

0.002% of the consideration of a transaction per side

CSRC

Transfer Fee

0.002% of the consideration of a transaction per side

0.002% of the consideration of a transaction per side

ChinaClear

HKSCC

Stamp Duty

0.1% of the consideration of a transaction on the seller

State Administration of Taxation

 

Inclement Weather Conditions

Scenario

Northbound Trading

Fund settlement (for T-1 position)

Securities settlement (for T position)

Typhoon No.8/Black rainstorm signal issued before Hong Kong market opens (i.e. 9:00 a.m.) and discontinued after 12:00 noon

Not open

No

Not applicable

Typhoon No.8 issued between 9:00 a.m. and 9:15 a.m.

Not open

Yes

Not applicable

Typhoon No.8 issued after SSE market opens (i.e. 9:15 a.m.)

Trading will continue for 15 minutes after Typhoon No.8 issuance, thereafter, only order cancellation is allowed till SSE market close

Yes

Yes

Black rainstorm signal issued after HK market opens (i.e. 9:00 a.m.)

Trading continues as normal

Yes

Yes

Typhoon No.8/Black rainstorm signal discontinued at or before 12:00 noon

Trading resumes after 2 hours

Postpone to

3:00 p.m

Yes

Source: HKEx

The information above is for reference only. It is subject to changes with respect to the implementation of Shanghai-Hong Kong Stock Connect or the promulgation or enactment of the relevant laws, regulations, agreements and other documents. Notice will not be issued upon any changes. For the latest news on Northbound Trading, please visit the HKEX website.

 

Dear Client,

Office Removal Notice

Please be informed that our office will be relocated to the following address with effective from 6 April 2020 (Monday):

Room 2603A, 26/F, One Harbour Square,

181 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong

 

Other contact details remain unchanged as follows:

Tel: (852) 3585 8988
Fax: (852) 3585 3622
Email: cs.securities@sunisec.com
Website: www.sunisec.com

Should you have any queries, please feel free to contact us.

 

Yours faithfully,

Sun International Securities Limited