China’s A shares will for the first time be available to international retail investors, when a “through train” liking the Shanghai and Hong Kong stock markets is rolled out on Nov 17. Shanghai-Hong Kong Stock Connect will allow a net 23.5 billion yuan ($3.8 billion) of daily cross-boundary purchases, granting overseas investors greater access to A shares as well as diversifying domestic investments.
Eligible Investors
While all Hong Kong and overseas investors will be allowed to trade Shanghai-listed shares under stock connect, eligible participants for Southbound trade include mainland institutional investors and those individuals holding an aggregate balance of not less than 500,000 yuan in securities and cash accounts
Bank Account Opening
There are 94 brokers in Hong Kong and 89 in the mainland ready to participate in stock connect, according to a list provided by regulatory authorities as of Nov 12. To trade through these market participants, retail investors will need to open an account and application documents include:
Proof of identification — ID card, Entry Permit for traveling to and from Hong Kong and Macao or passport.
Proof of residence — property ownership certificate, utilities bill, mobile bill or social security statement.
Trading quota
Trading under stock connect will, initially, be subject to quota restrictions. Overseas investors can only invest a net value of as much as 300 billion yuan in A shares with a daily cap of 13 billion yuan, while mainland investors can only invest a net value of as much as 250 billion yuan in Hong Kong stocks with a daily cap of 10.5 billion yuan.
Both quotas apply on a “net buy” basis, which means investors will always be allowed to sell their cross-boundary securities regardless of the quota balance.
Trading Hours and Holiday Arrangements
In initial operation of Shanghai-Hong Kong Stock Connect, investors will only be allowed to trade on the other market on days when both are open for trading and banking services are available on the corresponding settlement days.
Northbound trading will follow the trading hours of Shanghai Stock Exchange, while Southbound trading will follow those of Hong Kong Stock Exchange. Investors can place Northbound orders five minutes before the mainland market session opens in the morning and in the afternoon.
Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.
Previous：Preferential Taxation Policies for Foreign Investment in China
Next：Investment, Reinvestment and Investment Promotion