The Shanghai and Hong Kong stock exchanges have ironed out most of the details for the cross-border “through train” stock trading program, the China Securities Journal reported Thursday, citing an unnamed source.
Most brokers on both sides of the border are expected to sign up for the program, and some plan to upgrade their trading systems to handle the changes, the paper said.
In an initiative to open up its capital market further to offshore investors, the State Council announced on April 10 that it had approved a mutual market access mechanism between the Shanghai and Hong Kong bourses, paving the way for greater cross-border investment and money flows.
To limit market risks, regulators will set investment quotas and other curbs on investors. The total cross-border trade quota will be capped at 250 billion yuan (US$40.48 billion) for Hong Kong-listed stocks, with a daily ceiling of 10.5 billion yuan, and 300 billion yuan for Shanghai shares with a daily ceiling of 13 billion yuan.
The source was quoted as saying that the daily ceiling does not refer to an upper limit on money inflows, but to net volume, pointing to higher-than-market investment flows at the two bourses.
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