The Shenzhen Stock Exchange (SZSE), the Stock Exchange of Hong Kong (SEHK), China Securities Depository and Clearing Corp (CSDC), and Hong Kong Securities Clearing Co (HKSCC) signed an agreement in Shenzhen, Guangdong province, on Oct 11 to establish the Shenzhen-Hong Kong Stock Connect.
The Shenzhen-Hong Kong Stock Connect is one of the central government’s top priorities to promote reform and opening-up of the capital market, said Wu Lijun, chairman of the Board of Governors of SZSE.
It would be of great significance in strengthening stock connectivity and cooperation between the mainland and Hong Kong, maintaining Hong Kong’s role as an international financial center, and boosting the opening of the capital market and the yuan’s internationalization, Wu said.
With the launch of the stock link, capital markets in Shenzhen and Hong Kong will be further connected, enhancing exchanges between the two cities, said Chow Chung Kong, chairman of the Hong Kong Exchanges and Clearing (HKEX).
Chow added that HKEX will continue to collaborate with both Shanghai and Shenzhen bourses and actively respond to market expectations.
Dai Wenhua, general manager of CSDC, said that the signing of the four-party agreement is a new starting point for further cooperation.
As a major financial infrastructure supporting the stock connect, CSDC will continue to improve risk control and emergency management, and to provide safe, convenient, and efficient depository and clearing services for investors, he said.
CSDC will lend full support to the implementation and operation of Shenzhen-Hong Kong Stock Connect, Dai added.
As a framework agreement and basic document for the connect program, the four-party agreement defines rights and obligations and clarifies business arrangement in various aspects, such as stock exchange, clearing, depository, and market supervision, said SZSE General Manager Wang Jianjun.
It’s an important achievement to reach a consensus among the four parties, Wang said.
The agreement marks a new step forward in preparing for the Shenzhen-Hong Kong Stock Connect, which will launch this year.