Date
17 December 2017
If the HKEx plan is adopted, there's a chance that local market players will be working during the Christmas holidays. Photo: Bloomberg
If the HKEx plan is adopted, there's a chance that local market players will be working during the Christmas holidays. Photo: Bloomberg

So you think cross-border stock trading is such a swell idea?

Market players cheered when the cross-border stock trading link was announced, but there’s one aspect of the scheme that they probably won’t like. 

The Hong Kong Exchanges and Clearing Ltd. (HKEx, 00388.HK) is floating the idea that the city’s bankers and stock brokers should work on public holidays when Chinese stock markets are open. 

And since the linkage between the Hong Kong and Shanghai stock exchanges is likely to kick off in October, there’s a chance that local market players will be working during the Christmas holidays.

“How to settle equity transactions in Shanghai during public holidays in Hong Kong is a big matter for the bourse linkage,” Bryan Chan, HKEx co-head of equity, fixed income and currency at the  global market division, told reporters attending a workshop on the bourse linkage on Thursday.

The exchange will discuss the matter with banks and brokerages, Chan said, adding that it remains just an idea.

Initially, there won’t be any transaction between the two sides if either market is on holiday. Also, there won’t be any transaction on the day before a public holiday on either side as trading cannot be settled under the current T+1 system, he said.

Meanwhile, HKEx reiterated that the Shanghai-Hong Kong Stock Connect, as the scheme is called, will follow the “home market” rules of the exchange where the orders are matched and executed. For example, day trade will not be available to Hong Kong investors as the mainland does not have this practice.

But there are exceptions. The Hong Kong exchange, for example, will follow the mainland’s pre-trading checking rules to ensure that traders have sufficient stocks to complete their deals, HKEx chief administrative officer Monica Wong said.

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AM/JP/CG

Ayishah Ma is a financial reporter on Greater China issues.

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