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HKEx To Launch RMB Products Through Shanghai

by Mary Swire, Lowtax.net, Hong Kong
27 May, 2014

Charles Li, the Chief Executive of Hong Kong Exchanges and Clearing Limited (HKEx), hopes to eventually enable trading in renminbi-denominated fixed income and currency products through the pilot for mutual stock market access between Hong Kong and Shanghai.

Last month, the China Securities Regulatory Commission and Hong Kong's Securities and Futures Commission approved, in principle, the development of Shanghai-Hong Kong Stock Connect (SHKSC), a pilot program for establishing stock market trading links through local securities firms or brokers.

For the first time, the pilot program will allow eligible Mainland investors to trade stocks listed on the Stock Exchange of Hong Kong (SEHK) directly through the Shanghai Stock Exchange (SSE). At the same time, it will also allow Hong Kong and overseas investors to trade, for the first time, stocks listed on the SSE directly through the SEHK. The preparatory work to launch SHKSC is expected to take approximately six months.

During his remarks to a recent RMB forum, Li talked of an HKEx strategy that could extend the initial equity-based SHKSC project into currency and fixed income products in three to five years, when SEHK anticipates efforts also to collaborate with other Shanghai, and Chinese exchanges.

Li said there is demand to be tapped from international investors, who currently are unable to trade such products in the Mainland, and also Mainland investors, who would also benefit from the proposed offering in Hong Kong.

A comprehensive report in our Intelligence Report series giving a country-by-country analysis of offshore investment funds, stock exchanges and trusts, with an analysis of the US QI regime, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report9.asp

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