The FINANCIAL — Recently, the China Securities Regulatory Commission (CSRC) and the Securities and Futures Commission (SFC) of Hong Kong have agreed to announce that the northbound trading penetration mechanism (i.e. investor identification system) for Shanghai/Shenzhen-Hong Kong stock connect programs will be implemented on 17 September, 2018.
In order to implement the decisions and arrangements of the CSRC, the SZSE recently revised and issued the Measures of the Shenzhen Stock Exchange for the Implementation of Shenzhen-Hong Kong Stock Connect (Revised in 2018). After the implementation of the northbound trading penetration mechanism, the SZSE will implement the real-time penetration supervision on northbound trading according to the information such as investor identification code. This will help to fully practice the frontline supervisory functions of the SZSE and improve the cross-border market regulatory and cooperation mechanism, therefore lifting its supervision efficiency and maintaining the market order.
Since the launch of the Shenzhen-Hong Kong Stock Connect program, various transactions, such as securities trading, registration and settlement, currency exchanges, and corporate actions, have been proceeded smoothly in the steady market. As of 31 August, 2018, the Shenzhen-Hong Kong Stock Connect has posted a cumulative trading volume of CNY3.46 trillion, bringing a net capital inflow of CNY89.927 billion into the SZSE market. Specifically, 1,126 shares have been traded through the northbound trading link (NTL), with a total trading volume of CNY2.33 trillion and an average daily turnover of CNY5. 696 billion; 526 shares have been traded through the southbound trading link (STL), with a total trading volume of CNY1.13 trillion and an average daily turnover of CNY2.810 billion.
Next, under the unified leadership of the CSRC, the SZSE will continue to improve the interconnection mechanism and strengthen cross-border supervision and cooperation, and severely crack down on cross-border market manipulations and other forms of deliberate misconduct, hence effectively protecting the legitimate rights and interests of investors in the Mainland, Hong Kong, and other areas. This will help build a new pattern of international cooperation featuring mutual benefit and win-win outcomes, thus accelerating the building of SZSE into a world-leading innovative capital formation center.