China Connect

Account Opening

Hong Kong and Oversea investors could open an account with us for Shanghai/Shenzhen-Hong Kong Stock Connect trading, please click here for more details.

Trading Arrangement

Same as the current arrangement for trading Hong Kong stocks, investors who want to participate in Shanghai and Shenzhen Connect will trade through SEHK Participants(e.g.Securities brokers). Investors should check with their SEHK Participants on any specific conditions that their SEHK Participants may require them to satisfy before accepting their Northbound orders. Northbound trades are executed on the SSE/SZSE platform, and therefore follow the SSE/SZSE market practices in general. This Section explains the market practices that are applicable to Northbound and Southbound under Shanghai and Shenzhen Connect.
It is contemplated that SEHK, SSE and SZSE would reserve the right to suspend Shanghai Connect and/or Shenzhen Connect respectively if necessary for ensuring an orderly and fair market and that risks are managed prudently. Suspension may be executed for a specific stock or all stocks of the relevant market(s). Consent from the relevant regulator would be sought before a suspension is triggered.

Trading Comparision between Shanghai and Shenzhen Stock Connect A shares and Hong Kong Stock

  Shanghai Stock Connect、 Shenzhen Stock Connect A Shares Hong Kong Stocks
Investment Quota Subject to a Daily Quota
RMB 13 billion for each market
N/A
Settlement Currency Renminbi
Phillip could provide preferential exchange rate of Renminbi for money settlement)
Hong Kong Dollar or Renminbi
Stock Code 6 digits 5 digits at most
Board Lot 100 shares per lot Customized by the listed company
Settlement Date Stock: On T day;
Money: On T+1 day
Stock and Money: T+2 day
Order Types Only accept limit orderscan be matched at the specified price or a better price) at-auction(market price), limit and others, 5 types of order in total
Order amendment Not allowed
(The order must be cancelled and input again.)
Allowed.
Tick Size Uniformly at RMB 0.01 Tick Size differ in the securities
Price Limit
  • general price limit of ±10% based on previous closing price
  • ±5% based on previous closing price for stocks under special treatment (i.e. ST and *ST stocks) under risk alert
  • The upper and lower price limit will remain the same intra-day
No
Dynamic price checking
  • To prevent mischievous behavior towards the use of the quota,SEHK has put in place a dynamic price checking for buy orders,Dynamic price checking will be applied throughout the trading day, from the 5-minute input period before the start of Opening Call Auction until the end of the afternoon Continuous
    Auction (until the end of the Closing Call Auction for SZSE).
  • Buy orders with input prices lower than the current best bid (or last traded price in the absence of current best bid, or previous closing price in the absence of both current best bid and last traded price) beyond a prescribed percentage will be rejected by CSC.
  • The dynamic price checking at 3% during the initial phase and may be adjusted from time to time subject to market conditions.
No
Maximum order size per transaction 1 million shares 3,000 lots
Odd Lot

Only available for sell orders and all odd lots should be sold in one single order.
Board lot and odd lot orders are both matched on the same platform on SSE 16 and SZSE, and subject to the same share price.

Odd lot could be only matched and sold on the specific platform through account executives. Odd lot trading may likely be executed at a price which is not as favourable as the prevailing market price.
Turnaround Trading
("Day trade")
Not allowed Allowed
Block Trades Not allowed Allowed
Manual Trades Not available Available

Quota

Trading under Shanghai and Shenzhen Connect will be subject to a Daily Quota.


Daily Quota is set at RMB 13 billion for each of Shanghai Connect and Shenzhen Connect,Daily Quota Balance will be updated on the HKEX website every minute。

Daily Quota Balance = Daily Quota – Buy Orders + Sell Trades + Adjustments

  • The Daily Quota is applied on a “net buy” basis.
  • Investors are always allowed to sell their cross-boundary securities regardless of the quota balance.
  • The Daily Quota will be reset every day. Unused Daily Quota will NOT be carried over to next day’s Daily Quota.
  • If the Northbound Daily Quota Balance drops to zero or the Daily Quota is exceeded during the opening call auction session, new buy orders will be rejected.
  • Once the Northbound Daily Quota Balance drops to zero or the Daily Quota is exceeded during a continuous auction session, no further buy orders will be accepted for the remainder of the day.
  • Buy orders already accepted will not be affected by the Daily Quota being used up and will remain on the order book of SSE and SZSE respectively unless otherwise cancelled by relevant SEHK Participants.

Pre-trade checking


In general, Mainland investors are only allowed to sell SSE-listed and SZSE-listed securities which are available in their stock accounts at the end of the previous day. Based on the shareholdings of an investor, SSE/SZSE will reject a sell order if the investor does not have sufficient shares in his account.

SEHK applies similar checking on all Northbound sell orders to ensure there is no overselling by individual SEHK Participants. Under SEHK’s pre-trade checking model, sell orders will be rejected if the cumulative sell quantity for the day is higher than the SEHK Participant’s shareholding position at market open.  Therefore, when placing sell orders, investors must ensure they have sufficient shares in their accounts opened with the SEHK Participant who acts as the selling broker. If the shares are kept in an account opened with another SEHK Participant or a custodian, investors must first transfer the shares to the selling SEHK Participant on T-1 in order to sell their shares on T day. A Special Segregated Account (“SPSA”) arrangement as mentioned below has been put in place, in which case investors whose Connect Securities are maintained with custodians may sell their Connect Securities without having to pre-deliver the Connect Securities from their custodians to their executing brokers. Please read the information book for investor to get more details.

Shanghai and Shenzhen Stock Connect Trading Hours

Northbound trading follows SSE’s and SZSE’s trading hours. However, SEHK will accept Northbound orders from SEHK Participants five minutes before the Mainland market sessions open in the morning and in the afternoon.

Trading hours Shanghai Stock Connect Shenzhen Stock Connect
SSE Trading HoursTime for SEHK Participants
to input Northbound orders
SZSE Trading HoursTime for SEHK Participants
to input Northbound orders
Opening Call Auction 09:15-09:25 09:10-11:30 09:15-09:25 09:10-11:30
Continuous Auction (Morning) 09:30-11:30 09:30-11:30
Continuous Auction (Afternoon) 13:00-15:00 12:55-15:00 13:00-14:57 12:55-15:00
Closing Call Auction Not Applicable Not Applicable 14:57-15:00
Note
  1. 09:20 – 09:25: SSE will not accept order cancellation
  2. Orders that are not executed during the opening call auction session will automatically enter the continuous auction session
  3. 09:10 – 09:15; 09:25 – 09:30; 12:55 – 13:00: Orders and order cancellations can be accepted by SEHK but will not be processed by SSE until SSE’s market open
  4. Order cancellations will not be processed in the system of SEHK immediately in the time slots mentioned above. Those cancellations will be processed together with original orders by SSE accordingly. Therefore, those orders may be executed before the order cancellations. To avoid misunderstanding, the company will not accept order cancellation during the time slots mentioned above (09:10-09:15; 09:25-09:30; 12:55-13:00).
  1. 09:20 – 09:25, 14:57 – 15:00: SZSE will not accept order cancellation
  2. 09:10 – 09:15; 09:25 – 09:30; 12:55 – 13:00: Orders and order cancellations can be accepted by SEHK but will not be processed by SZSE until SZSE’s market open
  3. Any buy or sell orders not executed during the opening call auction session will automatically enter the continuous auction session. Any buy or sell orders not executed during the continuous auction session will automatically enter the closing call auction session.

Holiday、Half trading day、Severe Weather Conditions

Holiday

Investors will only be allowed to trade on the other market on days where Hong Kong and Mainland markets are both open for trading, and banking services are available in both Hong Kong and Mainland markets on the corresponding settlement days. This arrangement is essential in ensuring that investors and brokers will have the necessary banking support on the relevant settlement days when they will be required to make payments.
The following table illustrates the holiday arrangement of Northbound trading of SSE/SZSE Securities:holiday arrangement

Half day trading

If a Northbound trading day is a half trading day in the Hong Kong market, Northbound trading will continue until respective Connect Market is closed.  Please refer to the HKEX website for the Northbound trading calendar for Shanghai Connect Northbound trading and Shenzhen Connect Northbound trading.

Severe Weather Conditions

The trading arrangement under severe weather conditions is as follows:
Severe Weather Conditions
For details of the existing typhoon/rainstorm procedure for the Hong Kong market, please refer to the HKEXwebsite.

Others

Corporate Actions

Common types of corporate actions of Connect Securities include but are not limited to cash dividend, bonus issues and voting etc. Besides, take-over offers and rights issue/ open offer may occur but they are relatively uncommon. HKSCC will keep CCASS participants informed of the corporate actions of Connect Securities, in particular those that require CCASS Participants / investors to take actions.

Cash Dividend/Bonus Issues

To the extent practicable arrangement, the cash dividend distribution arrangement would be similar to the SEHK.

Meeting

Client can give a SSE Securities voting instruction via Phillip Securities. Hong Kong and overseas investors of SSE / SZSE Securities will not be able to attend meetings themselves or as proxy in person.  

Take-over offers and rights issue/ open offer

For Take-over offers, the offer period of SSE Securities normally will be around 30 days. Client who is qualified can accept the take-over offers during the offer period via Phillip Securities.  For right issue/ open offer, the subscription period of SSE Securities normally will be around one week, but it may be as short as one business day only. Client who is qualified can subscribe for the rights/ open offer during the subscription period via Phillip Securities. Rights/ open offerare non-tradable. No excess application is available in general.

Initial public offering (IPO)

Initial public offering (IPO) It is currently contemplated that Shanghai-Hong Kong Stock Connect will not support initial public offering.

* Investors should note that the time for them to take actions for some types of corporate actions of SSE Securities may be as short as one business day only. * Client should note and comply with the arrangement and deadline specified by Phillip Securities in order to participate in the corporate actions relating to their SSE Securities.  

All approved corporate actions of SSE Securities and SZSE Securities are announced by issuers through the SSE website or the SZSE website, as the case may be, and officially appointed newspapers (both the printed papers and their websites): the Shanghai Securities News, Securities Times, China Securities Journal, Securities Daily and www.cninfo.com.cn.   

Investors are reminded that issuers listed on the ChiNext Market are required to publish certain corporate announcements on their corporate websites and the officially appointed websites only. HKSCC will also record all corporate actions relating to SSE and SZSE Securities in CCASS and advise CCASS Participants of the details via the CCASS terminals as soon as practicable on the announcement date. Hong Kong and overseas investors can visit the SSE, SZSE and newspaper websites for the latest listed company announcements.  

Hong Kong and overseas investors can also visit HKEX website’s China Stock Markets Web for the company announcements of Connect Securities issued on the previous trading day.  

Securities received by investors

Hong Kong and overseas investors may receive securities which are not already accepted as SSE Securities as a result of any distribution of rights (including the right to subscribe for rights issues or open offers) or entitlements, conversion, takeover, other corporate actions or special circumstances:
    1. If such securities are SSE-listed securities and traded in RMB, Hong Kong and overseas investors will be allowed to sell them through Shanghai Connect; and
    2. if such securities are not SSE-listed securities, Hong Kong and overseas investors will not be able to sell them through Shanghai Connect. HKSCC will consider alternative arrangements to handle such securities and will notify CCASS Participants accordingly.

Shareholding Restrictions and Disclosure on Connect Securities

A single/All foreign investor's / investors's shareholding in a listed company is not allowed to exceed a specific percentage of the company's total issued shares. Force-sell requirements would be arranged if investor(s) exceed the limit:
SituationShareholding (in a listed company)
A single foreign investor < = 10% of the company’s total issued shares
All foreign investors < = 30% of the company’s total issued shares
*Once SSE or SZSE informs SEHK that the aggregate foreign shareholding of an SSE Security reaches 28%, further Northbound buy orders in that SSE Security will not be allowed, until the aggregate foreign shareholding of that SSE Security is sold down to 26%.

*If the 30% threshold is exceeded due to Shanghai or Shenzhen Connect, HKEx will identify the relevant EP and require it to follow the force-sell requirements.

If such selling activities cause the aggregate foreign shareholding to drop below the 30% threshold within 5 trading days, EPs who were subject to the forced-sale requirement may submit application to the SEHK for forced-sale exemption via Phillip Securities.

Shareholding Disclosure

Investor is required to make disclosure within three working days in the following situations:
  1. An investor holds or controls up to 5% of the issued shares of a Mainland listed company.
  2. Every time when a change in an investor’s shareholding reaches 5%
  3. If a change in shareholding of the investor is less than 5% but results in the shares held or controlled by him falling below 5% of the relevant Mainland listed company.
The investor is not allowed to continue purchasing or selling shares in that listed company during the three working days.
*Working days refer to the dates in Shanghai/ Shenzhen.

Not protected by Investor Compensation Fund

The current Investor Compensation Fund will not cover any Northbound activities.For details, please refer to website of HKEX  Frequently Asked Questions

Data Distribution

Real-time SSE data is updated once every 5 seconds and real-time SZSE data is updated once every 3 seconds.Information includes:
  • Best Bid Price/Volume
  • Best Offer Price/Volume
  • Volume Traded and Value Traded
  • Highest Price and Lowest Price
  • Previous Price
  • Open Price
  • Latest Price
*Broker order queue will not be shown in Shanghai-Hong Kong Stock Connect trading system.

Non-trade Transfer

As stipulated in Article 11 of the CSRC Stock Connect Rules, transfers of SSE Securities should only be conducted on SSE and off-exchange trading is not allowed unless otherwise permitted. To facilitate market players in conducting Northbound trading and the normal course of business operation, the following types of off-exchange or “non-trade” transfer of SSE Securities are allowed (Article 29 of the SSE Stock Connect Pilot Provisions):
  1. SBL for covered short selling purpose (not more than one month duration);
  2. SBL for the purpose of satisfying the pre-trade checking requirement (one-day duration which cannot be rolled over);
  3. transfers between SEHK Participants and their clients for the purpose of rectifying error trades;
  4. post-trade allocation of shares to different funds/sub-funds by fund managers; and
  5. other situations specified by SSE and ChinaClear, including:
    1. succession;
    2. divorce;
    3. the dissolution, liquidation or winding-up of any company or corporation;
    4. donation to a charitable foundation;
    5. assisting in any enforcement in connection with proceedings or action taken by any court, prosecutor or law enforcement agency; and
    6. any other transfer as may be permitted by SSE.
Details of the arrangement for the collection of stamp duty from investors for these non-trade transfers in SSE Securities have been included in the CCASS Operational Procedures published on the HKEX website at: Click here

The information above are provided by HKEX. The latest version released by HKEX shall prevail in case of any changes.

Important Notes and Specific Risks of trading via Shanghai-Hong Kong Stock Connect and/or Shenzhen-Hong Hong Stock Connect (China Connect), please click here,or visit HKEX website to view Information Book for Investor and Frequently Asked Questions

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