21 February 2019

Stock exchange rules unlikely to be unified under SHSC scheme

Rules of the stock exchanges of Shanghai and Hong Kong are unlikely to be unified under the Shanghai-Hong Kong Stock Connect (SHSC) pilot scheme, Hong Kong Economic Times reported Tuesday, citing Wang Guogang, chief of the Institute of Finance and Banking under the Chinese Academy of Social Sciences.

The cross-border stock trading scheme only pertains to the investors, particularly to investment limits, and as such, it is not necessary to unify the rules of the two stock exchanges, which are intended to answer the specific needs of the markets they serve, Wang was quoted as saying.

Also, the government consultant said it is highly unlikely that the Shanghai bourse will replace its T+1 trading system with T+0 for blue chips. He noted the stock trading rules should be uniform for all stocks as allowing different rules in one market may result in subjective criteria and breed corruption.

Strengthening regulation is one of the authorities’ most important duties under the SHSC, Wang said, adding that the two exchanges will gradually adjust their regulatory regimes in line with market changes.

Regulators will also boost cooperation on information disclosure and investor education, with the aim of helping investors from both sides better understand each other’s stock market, the report said.

Meanwhile, the government is discussing details of a plan to raise the 20,000 yuan daily limit for Hong Kong residents to exchange the local currency for renminbi, Sing Tao Daily News reported Tuesday.

The move is expected to be announced this year as part of efforts to support SHSC, the newspaper said.

However, Hong Kong investors are not likely to rush into the A-share market in view of its sluggish performance over the past years despite government efforts to boost trading, a market player was quoted as saying.

Chinese companies with shares listed both in Hong Kong and the mainland may attract more investment through the pilot scheme than pure A-share stocks as Hong Kong investors are concerned over the corporate governance of pure A-share companies, the source said.

– Contact HKEJ at [email protected]



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