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Shanghai–Hong Kong Stock Connect Northbound Service
Notice to processing of Personal Data:
To comply with the requirements of the Investor ID Model for Northbound Trading under the Stock Connect (the “NB Investor ID Model”), The Core Securities Company Limited (“TCSC”) will be required to assign a unique number to each of their Northbound trading clients (i.e.a “Broker-to-Client Assigned Number” or “BCAN”) and provide the corresponding investor identification information (i.e. “Client Identification Data” or “CID”) to The Stock Exchange of Hong Kong Limited before they submit client orders for Northbound trading, and tag the BCAN to every Northbound order on a real-time basis. As BCANs are assigned by TCSC to uniquely identify TCSC’s clients, BCANs may constitute personal data pursuant to the Personal Data (Privacy) Ordinance (Cap. 486) (the “PDPO”). As such, TCSC is required to comply with all applicable requirements under the PDPO when collecting, storing, using, disclosing and transferring personal data under the NB Investor ID Model. In light of the above, you are required to (i) read the Personal Information Collection Statement concerning Northbound China Connect Orders (the “PICS”) carefully, which is uploaded to TCSC’s account opening section: https://www.tcsec.com/ENHome/Download; (ii) signify your consent by ticking the box in the Acknowledgement and Consent section in the PICS; and (iii) return the completed and signed PICS to TCSC. If you have any questions, please contact us via email: Inquiry@tcsec.com or phone: +852-3653-8888.
Important Notice
Risk Disclosure
The following risk disclosure statements cannot disclose all the risks involved.
You should undertake your own research and study before your trade or invest. You
should carefully consider whether trading or investment is suitable in light of
your own financial position and investment objective. You are advised to seek independent
financial and professional advice before you trade or invest. You should seek independent
professional advice if you are uncertain of or have not understood any aspect.
General
Investment involves risk. The price of securities/structured products may move
up or down. Losses may be incurred as well as profits made as a result of buying
and selling securities/structured products.
You should carefully consider whether any investment products or services mentioned
herein are appropriate for you in view of your investment experience, objectives,
financial resources and circumstances.
Risks of investing
in RMB denominated securities
Risks of investing in Shanghai-Hong
Kong Stock Connect Northbound Securities
Q1. What is 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.
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.
SSE Securities for trading by Hong Kong and overseas investors is called
"Northbound Trading"
.
SEHK Securities for trading by Mainland investors is called
"Southbound
Trading"
.
The information provided here has been summarized from the Hong Kong Exchanges and Clearing Limited. For more information please see the information provided at:
http://www.hkex.com.hk/eng/market/sec_tradinfra/chinaconnect/chinaconnect.htm
Our summary provided is entirely qualified by the materials provided by the Hong Kong Exchanges and Clearing Limited, and to the extent there is a conflict between the two, please refer to the Hong Kong Exchanges and Clearing Limited materials.
Q2. What's the trading hours for trading SSE Securities?
Northbound trading will follow SSE's trading hours. However, SEHK will accept Northbound orders from EPs five minutes before the Mainland market session opens in the morning and in the afternoon.
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Q3. Who can participate in Northbound Trading ?
All Hong Kong and overseas investors will be allowed to trade SSE Securities through Shanghai-Hong Kong Stock Connect.
Q4. Is there a quota?
Northbound Trading * under Shanghai-Hong Kong Stock Connect will, initially, be subject to a maximum cross-boundary investment quota (i.e., Aggregate Quota), together with a Daily Quota, which is monitored by SEHK.
The Northbound Aggregate Quota is set at RMB 300 billion.
The Northbound Daily Quota is set at RMB 13 billion.
Both the Aggregate Quota and the Daily Quota will apply on a "net buy" basis. Under that principle, investors will always be allowed to sell their cross-boundary securities regardless of the quota balance.
SEHK will publish the remaining balance of the Northbound Aggregate Quota and Daily Quota at scheduled times on the HKEx's website.
At the end of each trading day, SEHK will calculate the remaining balance of the Northbound Aggregate Quota:
Aggregate Quota Balance = Aggregate Quota – Aggregate Buy Trades + Aggregate Sell
Trades.
If Aggregate Quota Balance is less than Daily Quota, Northbound buying will be
suspended on the next trading day. However, investors can continue to sell SSE Securities,
which will then increase the Aggregate Quota Balance. SEHK will re-open Northbound
buying once the Aggregate Quota balance returns to the Daily Quota level or above.
*To facilitate Hong Kong and overseas investors trading in SSE Securities through Shanghai-Hong Kong Stock Connect (i.e. Northbound trading).
Q5. Does SSE price limit apply under Shanghai-Hong Kong Stock Connect?
For SSE Securities, there is a general price limit of a ±10% (and a ±5% for stocks under special treatment (i.e. ST and *ST stocks) in the risk alert board) based on previous closing price.
All orders input for SSE Securities must be withisn the price limit. Any orders with price beyond the price limit will be rejected by SSE. The upper and lower price limit will remain the same intra-day.
Q6. Investors will only be allowed to sell an SSE Security but restricted from further buying if:
(a) the SSE Security subsequently ceases to be a constituent stock of the relevant
indices; and/or
(b) the SSE Security is subsequently under "risk alert"; and/or
(c) the corresponding H share of the SSE Security subsequently ceases to be
traded on SEHK,
as the case may be.
Q7. Levies Arrangement
Fees and taxes applicable to a Northbound trade:
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Summary of taxes related to trading of SSE Securities by the Hong Kong and overseas investors via Shanghai Hong Kong Stock Connect:
- Capital gains tax / Business tax : Hong Kong and overseas investors are exempted from paying both capital gains tax and business tax, when they trade SSE Securities via Shanghai-Hong Kong Stock Connect.
- Stamp duty : Hong Kong and overseas investors are required to pay stamp duty arising from the sale and purchase of SSE Securities and the transfer of SSE Securities by way of succession and gift in accordance with existing Mainland taxation regulations.
- Cash dividend and/or Bonus shares : Hong Kong and overseas investors are required to pay tax on cash dividend and/or bonus shares of SSE Securities at a standard rate of 10%, which will be withheld and paid to the relevant tax authority by the respective listed companies. For those investors whose residing country has entered into a tax treaty with China which allows them enjoying a lower dividend tax rate, the investors may apply to the tax authority for a refund of the differences.
Please refer to the following notice for complete information regarding the taxes arrangement mentioned above:
The notice jointly issued by the Ministry of Finance (MOF), the State Administration of Taxation (SAT) and CSRC on 14 November 2014
http://szs.mof.gov.cn/zhengwuxinxi/zhengcefabu/201411/t20141114_1158461.html
Q 8. What is the trading and settlement currency?
Hong Kong and overseas investors will trade and settle SSE Securities in RMB only. Mainland investors will trade SEHK Securities quoted in HKD only and settle the trades with ChinaClear or its clearing participants in RMB.
Q 9. What is the clearing and settlement cycle?
Northbound trades * will follow the A share settlement cycle. For securities settlement, ChinaClear will debit or credit its clearing participants' (including HKSCC as clearing participant) stock accounts before 6:00pm on T day to settle their A share trades. To facilitate SSE Securities settlement cycle, HKSCC will conduct securities settlement on Northbound trades for its CPs via two rounds of Batch Settlement Runs at around 4:30pm and 6:00pm on T day. For money settlement of Northbound trades, it will be effected by around noon on T+1 day.
*To facilitate Hong Kong and overseas investors trading in SSE Securities through Shanghai-Hong Kong Stock Connect (i.e. Northbound trading).
Q10. What is the holiday arrangement?
In the initial stage of operation of Shanghai-Hong Kong Stock Connect, investors
will only be allowed to trade on the other market on days where both markets are
open for trading, and banking services are available in both markets on the corresponding
settlement days. This arrangement is essential in ensuring that investors and brokers
will have the necessary banking support on the relevant settlement days when they
will be required to make payments.
The following table illustrates the holiday arrangement of Northbound trading of
SSE Securities:
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Q11. Can investor do day trading on SSE Securities?
Day trading * is not allowed for Mainland A shares market. Therefore, Hong
Kong and overseas investors buying SSE Securities on T-day can only sell the shares
on and after T+1 day.
*Establishing and liquidating the same position or positions within one day's trading.
Fund and Stock Trading