About Shanghai-Hong Kong Stock Connect

Shanghai-Hong Kong Stock Connect is a securities trading and clearing links programme to be developed by Hong Kong Exchanges and Clearing Limited (HKEx), Shanghai Stock Exchange (SSE) and China Securities Depository and Clearing Corporation Limited (ChinaClear), aiming to achieve a breakthrough in mutual market access between the Mainland and Hong Kong.

Hong Kong and foreign investors can trade SSE stocks through Northbound trading while Mainland investors can trade SEHK stocks through Southbound trading.

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The structure and operation of Shanghai-Hong Kong Stock Connect

Under Shanghai-Hong Kong Stock Connect, the Stock Exchange of Hong Kong Limited (SEHK), a wholly-owned subsidiary of HKEx, and SSE will establish mutual order-routing connectivity and related technical infrastructure to enable investors of their respective market to trade designated equity securities listed in the other’s market. For facilitating Hong Kong and overseas investors trading in SSE Securities through Shanghai-Hong Kong Stock Connect (i.e. Northbound trading), SEHK will establish SEHK Subsidiary in Shanghai, whose principal function will be to receive orders to trade in SSE Securities from Exchange Participants and route them onto SSE’s trading platform for matching and execution on SSE. Upon trade execution, trade confirmation received from SSE will be sent to Exchange Participants. Details can be referred to the followings:

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Investor and Participant Eligibility

	Institutional Investors	Individual Investors
Northbound Trading	All Hong Kong and Overseas Institutional Investors	All Hong Kong and Overseas Individual Investors
Southbound Trading	All Mainland Institutional Investors	Individual Investors who hold an aggregate balance of not less than RMB 500,000 in their securities and cash accounts

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General eligibility criteria and regulations

• For SSE-listed securities, only A shares will be included in Shanghai-Hong Kong Stock Connect in the initial stage. Other product types such as B shares, Exchange Traded Funds (ETFs), bonds, and other securities will not be included.
• In the initial phase, Hong Kong and overseas investors will be able to trade selective stocks listed on the SSE market (i.e. SSE Securities). These include all the constituent stocks of the SSE 180 Index and SSE 380 Index, and all the SSE-listed A shares that are not included as constituent stocks of the relevant indices but which have corresponding H shares listed on SEHK. The Stock Exchange of Hong Kong Limited (SEHK) would regularly update the list of those eligible Shanghai-Hong Kong Stock Connect Northbound Securities on HKEx website which the clients should closely monitor the updated publishing list.
• Clients will only be allowed to sell an SSE Security but restricted from further buying if:
  1. the SSE Security subsequently ceases to be constituent stock of the relevant indices; and/or
  2. the SSE Security is subsequently put under “risk alert board”; and/or
  3. the corresponding H share of the SSE Security subsequently ceases to be traded on SEHK, as the case may be.

For details, please refer to the HKEx website for further reference http://www.hkex.com.hk

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Important notes on trading arrangement and information of SSE Securities

Regarding the trading arrangement and information of SSE Securities, please refer to A-shares (Shanghai – Hong Kong Stock Connect) trading platform.

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Other Information

1. Since SSE Securities are issued in scripless form, physical deposits and withdrawals of SSE Securities into/from the CCASS Depository are not available.
2. Hong Kong and overseas investors trading SSE Securities through Shanghai-Hong Kong Stock Connect should note that SSE-listed issuers will continue to publish corporate documents in Chinese only as their current practice, and English translation will not be available.
3. Following the existing Mainland market practice, Hong Kong and overseas investors being the beneficial owners of SSE Securities will not be able to attend meetings as proxy in person, as opposed to what they can do in Hong Kong if they hold SEHK-listed shares. And HKSCC is the “nominee holder”of the SSE Securities acquired by Hong Kong and overseas investors through Shanghai-Hong Kong Stock Connect. However, it should be noted that, under the CCASS Rules, HKSCC as nominee holder shall have no obligation to take any legal action or court proceeding to enforce any rights on behalf of the investors in respect of the SSE Securities in Mainland China or elsewhere. HKSCC will, upon the request of a participant holding SSE Securities through HKSCC, provide certification of the participant’s holdings of SSE Securities in CCASS.
4. The company may forward the client’s identity to SEHK which may on-forward to SSE for surveillance and investigation purposes. If the SSE Rules are breached, or the disclosure and other obligations referred to in the SSE Listing Rules or SSE Rules is breached, SSE has the power to carry out an investigation, and may, through SEHK, require the company to provide relevant information and materials and to assist in its investigation. SEHK may upon SSE’s request, require the company to reject orders from the client. SSE may request SEHK to require the company to issue warning statements (verbally or in writing) to the clients, and not to extend Northbound trading service to the clients.
5. HKEx, SEHK, SEHK Subsidiary, SSE and SSE Subsidiary and their respective directors, employees and agents shall not be responsible or held liable for any loss or damage directly or indirectly suffered by the clients or any third parties arising from or in connection with Northbound trading or the CSC.
6. Clients should understand fully the PRC rules and regulations in relation to short-swing profits, disclosure obligations and follow such rules and regulations accordingly. And must comply with SSE Rules and other applicable laws of Mainland China relating to Northbound trading;