A team led by Wu Lijun, Chairman of the Board of Directors of Shenzhen Stock Exchange (SZSE) has recently paid a visit to Hong Kong, meeting with the Government of the Hong Kong Special Administrative Region, Hong Kong Monetary Authority (HKMA) and Hong Kong Securities and Futures Commission (HKSFC). They exchanged working ideas with Hong Kong Exchanges and Clearing Limited and had a group discussion with some market players located in Hong Kong.
During the visit, the preparing progress of “Shenzhen-Hong Kong Stock Connect” was introduced by Chairman Wu, who stressed the significant meaning of interconnection and interworking between Shenzhen and Hong Kong. By absorbing the pilot experience from “Shanghai-Hong Kong Stock Connect”, SZSE will work closely with Hong Kong Stock Exchange to explore ways to broaden methods and contents of cooperation and jointly propel the construction of “Shenzhen-Hong Kong Stock Connect” and the internationalization of A-share market. Both exchanges agreed to adhere to the following three principles in designing schemes for “Shenzhen-Hong Kong Stock Connect”:
- first, to keep the basic framework and model the same with “Shanghai-Hong Kong Stock Connect” with market players’ business and technical system architecture unchanged;
- second, to reflect the reciprocity principle and highlight the features of multi-level and multi-product of both markets; to consider expanding the scope of underlying securities based on “Shanghai-Hong Kong Stock Connect”, so as to put the general requirement of “higher level and wider scope” into practice; and
- third, to design schemes and optimize services on the basis of market demands, and to implement the schemes in a well-advised and well-organized manner.
At present, both exchanges have completed scheme design and started the development of technical systems. Once approved by both regulators, they will organize business and technical preparation and actively propel the implementation. Both of the exchanges agreed to strengthen the comprehensive and pragmatic cooperation under the guidelines of “deeper, broader and more innovative”. Besides, Chairman Wu also shared information about the construction of Qianhai Platform and the Technical Platform for the Mutual Recognition to Cross-border Funds. In a bid to deepening the services in the development and opening up in Qianhai, SZSE will actively take part in the construction of the Cross-border Trading Platform in Qianhai and explore the cooperation between Shenzhen and Hong Kong adhering to “Relying on Hong Kong, Serving Mainland China, and Facing the World”. The move is conducive to giving play to the superimposed policy advantages and geographical advantages in Qianhai, expanding mainland’s opening degree to Hong Kong, and widening the development space of the securities services in Hong Kong.
The interconnection and interworking between Shenzhen and Hong Kong is highly recognized by the government, regulators and market players in Hong Kong, who believe that it is an important part of the Service and Trade Liberalization between Guangdong and Hong Kong, and is good for Hong Kong to play the role as an offshore RMB and international financial center and promote the development of real economy in mainland China. Officers of HKMA and HKSFC said in the meeting that they will actively promote the smooth implementation of “Shenzhen-Hong Kong Stock Connect”, accelerate the construction of the Technical Platform for the Mutual Recognition to Cross-border Funds, and support the deepening cooperation between Shenzhen and Hong Kong.