Stock Connect rules may be eased to lure small investors

April 16, 2015 08:38
Hong Kong stocks could get a further boost as authorities are said to be planning to relax the rules on a cross-border trading program. Photo: Bloomberg

Chinese and Hong Kong regulators are looking at easing the rules governing the cross-border stock trading program in a bid to facilitate investments in Hong Kong by small mainland investors, the Wall Street Journal reported.

Authorities could relax a requirement that mainland investors have 500,000 yuan (about US$80,000) on account to qualify for participation in the Shanghai-Hong Kong Stock Connect program, the paper said, citing people familiar with the matter.

Other changes being considered for the Stock Connect program include significantly expanding or even eliminating quotas capping how much mainland investors can buy in Hong Kong, and vice versa, according to the report.

Currently, mainland investors are allowed to purchase a total of 10.5 billion yuan of Hong Kong stocks on a trading day, while global investors are permitted to buy a daily total of 13 billion yuan worth of shares trading in Shanghai.

The planned move to make it easier for funds to flow in and out of the mainland could give another boost to the Hong Kong market, the paper noted.

One reason for the possible adjustments to the rules is the pending launch of a second trading link between the Shenzhen and Hong Kong markets, it said. 

Chinese central bank governor Zhou Xiaochuan said last month that the design of the Shanghai-Hong Kong link is "a bit conservative", and that it "offers some fodder for thought for the next stock link between Shenzhen and Hong Kong". 

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