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Shanghai-HK Stock Exchange Link Delayed

by Mary Swire, Lowtax.net, Hong Kong
29 October, 2014

Hong Kong Exchanges and Clearing Limited (HKEx) has confirmed that a date has not yet been set for the start of the Shanghai-Hong Kong Stock Connect (SHKSC) program.

SHKSC will for the first time allow eligible Mainland Chinese investors to trade stocks listed on The Stock Exchange of Hong Kong Limited (SEHK) directly through the Shanghai Stock Exchange (SSE). It will also newly enable Hong Kong and overseas investors to trade stocks listed on the SSE directly through the SEHK.

In a statement on October 26, HKEx noted that the market had expected a commencement date in October 2014, on the basis of the original announcement on April 10 that said preparations for SHKSC should take approximately six months to complete. Although the parties are now technically ready to implement the program, HKEx stated that it has not yet received the relevant regulatory approval for SHKSC's launch and there is no firm date for its implementation. Further announcements, it added, will be made as and when there are any material developments.

In its announcement, HKEx did not link the delay to the continuing protests concerning the city's electoral process, but these have been addressed lately by Chan and also Hong Kong Financial Secretary John Tsang with reference to the health and growth prospects of the Hong Kong financial system.

Discussing the SHKSC on October 24, Hong Kong's Secretary for Financial Services and the Treasury, K C Chan, said: "The regulators, in both Hong Kong and the Mainland, will review the situation and decide when will be the launch date. … [They will] have to review the overall stage of readiness and decide when will be the date of launch."

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