First rehearsal for Shanghai-HK Stock Connect completed

02 September 2014   Category: News, Asia, China, Global, Hong Kong   By Hui Ching-hoo

Hong Kong Exchanges and Clearing (HKEx) is putting the final touches to the soon-to-be-launched Shanghai-Hong Kong Stock Connect, with the completion of the first round of market rehearsals (MR1) for the pilot scheme.

The bourse conducted the two-day MR1 between August 30 and August 31. It allowed participants to gauge their system readiness for the programme. Both northbound and southbound trading processes, as well as clearing and settlement cycles in Hong Kong and Shanghai, were verified.

The exercise also provided the opportunity for participants to familiarise themselves with the features of northbound trading and test their trading and clearing operations, HKEx said.

The MR1, together with a previous connectivity test and the next round of market rehearsals (MR2) scheduled for September 13, is designed to enable participants to verify their readiness to participate in the Shanghai-Hong Kong Stock Connect at launch. 

HKEx said it would conduct a detailed analysis of all the testing results after the market rehearsal and take appropriate follow-up actions.

A total of 97 exchange participants (EPs), accounting for about 80% of the total market turnover, and 108 central clearing and settlement system (CCASS) participants were involved in the MR1.

John Zhu, greater China economist at HSBC, said in a report that the Shanghai-Hong Kong Stock Connect is another step towards capital account liberalisation, and demonstrates mainland China’s commitment to financial reform.

The Shanghai-Hong Kong Stock Connect, expected to launch in October, will let global investors trade China A-shares from Hong Kong, and also give Mainland investors access to shares in the former British territory.