Overview
To facilitate Hong Kong and overseas investors trading in SSE Securities through Shanghai Connect (i.e. Northbound trading), SEHK has established an SEHK Subsidiary in Shanghai, whose principal function is to receive orders to trade in SSE Securities from SEHK Participants and route them onto SSE's trading platform for matching and execution on SSE. Upon trade execution, trade confirmation received from SSE will be sent to SEHK Participants. For Shenzhen Connect, SEHK has established another SEHK Subsidiary in Qianhai Shenzhen, whose principal function is to receive orders to trade in SZSE Securities from SEHK Participants and route them onto SZSE's trading platform for matching and execution on SZSE.
Same as the current arrangement for trading Hong Kong stocks, investors who want to participate in Shanghai and Shenzhen Connect will trade through SEHK Participants. Investors should check with their SEHK Participants on any specific conditions that their SEHK Participants may require them to satisfy before accepting their Northbound orders.
Northbound trades are executed on the SSE / SZSE platform, and therefore follow the SSE / SZSE market practices in general. The following sections explain the market practices that are applicable to Northbound and Southbound under Shanghai and Shenzhen Connect.
Eligible Stocks for Shanghai-Hong Kong / Shenzhen-Hong Kong Stock Connect
| Northbound Trading | Southbound Trading | |
|---|---|---|
| Constituent stock of relevant indices | SSE: SSE 180 Index and SSE 380 Index SZSE: All the constituent stocks of the SZSE Component Index and the SZSE Small / Mid Cap Innovation Index which have a market capitalization of not less than RMB¥ 6 billion * | Hang Seng Composite LargeCap Index and Hang Seng Composite MidCap Index |
| A+H shares | All the SSE-listed and SZSE-listed A Shares that are not included as constituent stocks of the relevant indices, but which have corresponding H shares listed on SEHK | All H shares that are not included as constituent stocks of the relevant indices, but which have corresponding shares in the form of SSE-listed Shares / SZSE-listed Shares |
| Except | SSE-listed / SZSE-listed shares which are not traded in RMB¥ and SSE-listed / SZSE-listed shares which are included in the “risk alert board” | Hong Kong shares that are not traded in Hong Kong dollars (HKD); H shares which have corresponding shares listed and traded on an exchange in Mainland China other than SSE / SZSE; and H shares which have corresponding A shares put under “risk alert” |
| Eligible Stocks (updated by HKEX) | ||
* ChiNext Stocks of Shenzhen Stock Exchange (SZSE) which may only be traded by institutional professional investors in the initial stage
Investors will only be allowed to sell an SSE / SZSE Security but restricted from further buying if:
- The SSE / SZSE Security subsequently ceases to be a constituent stock of the relevant indices; and/or
- The SSE / SZSE Security is subsequently under “risk alert”; and/or
- The corresponding H share of the SSE / SZSE Security subsequently ceases to be traded on SEHK, as the case may be.
Northbound Trading Details
| Northbound Trading Details | |
|---|---|
| Trading Currency | RMB¥ |
| Stock Code | 6 digits |
| Order type | Only limit orders |
| Order amendment | Cannot be amended |
| Tick Size | RMB¥0.01 |
| Price Limit |
General price limit of ±10% based on previous closing price Special Price Limit: ±5% for ST and *ST stock |
| Dynamic Price Check | The dynamic price checking at 3% |
| Board Lot Size | 100 shares per lot |
| Upper limit for Order size | 1,000,000 shares |
| Odd Lot trade | For sell order only |
| Money Settlement | T+1 |
| Securities Settlement | T |
| Day (Turnaround) Trading |
Day trading is not allowed. Buying Securities on T-day can only sell the shares on and after T+1 |
| Block Trade | Not available |
| Short Sell | Not provided in CHIEF |
| Margin Trading | Not provided in CHIEF |
| Initial Public Offering | Not available |
| Shareholder Voting Instructions | HKSCC will consolidate the voting instructions from CCASS Participants and endeavor to submit a combined single voting instruction (with ”For” and/or ”Against” votes together with ”Abstain” and/or cumulative votes if applicable) to the relevant SSE-listed / SZSE-listed company via the designated on-line voting platform. |
Quota
| Quota | |
|---|---|
| Daily quota | The Northbound Daily Quota is set at RMB¥ 13 billion for each of Shanghai Connect and Shenzhen Connect, and the Southbound Daily Quota is set at RMB¥ 10.5 billion for each of Shanghai Connect and Shenzhen Connect. |
| Principle |
Apply on a 'net buy' basis Investors will always be allowed to sell their cross-boundary securities regardless of the quota balance |
| Daily quota |
SEHK monitors the usage of the Northbound Daily Quota on a real-time basis and the Northbound Daily Quota Balance will be updated on HKEX website every minute: Daily Quota Balance = Daily Quota – Buy Orders + Sell Trades + Adjustments Daily Quota will be refreshed and remain the same every day, subject to the balance of the Aggregate Quota. Unused Daily Quota will NOT be carried over to next day's Daily Quota. Once the Northbound Daily Quota Balance drops to zero or is exceeded during a continuous auction session (Continuous Trading), no further buy orders will be accepted for the remainder of the day. Subject to the Aggregate Quota Balance, SEHK will resume the Northbound buying service on the following trading day. Once the Northbound Daily Quota Balance drops to zero or the Daily Quota is exceeded during the opening call session, new buy orders will be rejected. However, as order cancellation is common during opening call auction, the Northbound Daily Quota Balance may resume to a positive level before the end of the opening call auction. When that happens, SEHK will again accept Northbound buy orders. It should be noted that buy orders already accepted will not be affected by the Daily Quota being used up and will remain on the order book of SSE / SZSE unless otherwise cancelled by the relevant EPs. |
Shareholding Restrictions on SSE / SZSE Securities
- All foreign investors' shareholding in the A Shares of a listed company is not allowed to exceed 30% of its total issued shares;
- A single foreign investor's shareholding in a listed company is not allowed to exceed 10% of the company's total issued shares;
- SSE / SZSE Securities purchased through Shanghai-Hong Kong / Shenzhen-Hong Kong Stock Connect will be considered in totality with those purchased by QFII and RQFII and be subject to the same foreign shareholding restriction. Once SSE / SZSE informs SEHK that the aggregate foreign shareholding of an SSE / SZSE Security reaches 28%, further Northbound buy orders in that SSE / SZSE Security will not be allowed, until the aggregate foreign shareholding of that SSE / SZSE Security is sold down to 26%. If the 30% threshold is exceeded due to Shanghai-Hong Kong / Shenzhen-Hong Kong Stock Connect, HKEX will identify the relevant EP and require it to follow the force-sell requirements.
Trading arrangement
Trading hours:
Northbound trading will follow SSE's / SZSE's trading hours as below:| SSE / SZSE Trading Session | SSE Trading Hours | SZSE Trading Hours | Time for EPs to input Northbound orders |
|---|---|---|---|
| Opening Call Auction | 09：15 ─ 09：25 | 09：15 ─ 09：25 | 09：10 ─ 11：30 |
| Continuous Auction (Morning) | 09：30 ─ 11：30 | 09：30 ─ 11 : 30 | 09：10 ─ 11：30 |
| Continuous Auction (Afternoon) | 13：00 ─ 15：00 | 13：00 ─ 14：57 | 12：55 ─ 15：00 |
| Closing Call Auction | - | 14：57 ─ 15：00 | 12：55 ─ 15：00 |
Remark:
During 09：20 ─ 09：25, 14：57 ─ 15：00, SSE / SZSE will not accept order cancellation
During 09：10 ─ 09：15, 09：25 ─ 09：30 and 12：55 ─ 13：00, orders and order cancellations can be accepted by SEHK but will not be processed by SSE / SZSE until SSE's / SZSE's market open. Any buy or sell orders not executed during the opening call auction session will automatically enter the continuous auction session. For SZSE, any buy or sell orders not executed during the continuous auction session will automatically enter the closing call auction session.
Holiday Arrangement:
In the initial stage of operation of Shanghai-Hong Kong/ Shenzhen-Hong Kong Stock Connect, investors will only be allowed to trade on the other market on days where both markets are open for trading.
Severe Weather Conditions
The trading arrangement under severe weather conditions will be as follows:
| Items | Rate | Charged by |
|---|---|---|
| Handling Fee | 0.00487% of the consideration of a transaction per side | SSE / SZSE |
| Securities Management Fee | 0.002% of the consideration of a transaction per side | CSRC |
| Transfer Fee |
0.002% of the consideration of a transaction per side 0.002% of the consideration of a transaction per side |
ChinaClear HKSCC |
| Stamp Duty | 0.05% of the consideration of a transaction on the seller | SAT |
Tax
Fees and taxes to be confirmed with the relevant regulators / authorities:
| Items | Description | Charged by |
|---|---|---|
| NEW CCASS Fee |
• A new fee for providing depository and nominee services to CPs for SSE / SZSE securities • Subject to SFC's approval |
HKSCC |
| Dividend Tax |
• Applicable to cash dividend and bonus issue • Subject to clarification with SAT |
SAT |
| Capital Gain Tax |
• Applicable to share disposal • Subject to clarification with SAT |
SAT |
Differences in Trading Details between SSE / SZSE Securities and Hong Kong Stock
| Item | SSE | SZSE | HK Stock |
|---|---|---|---|
| Stock Code | 6 digits (e.g. 601633) | 6 digits (e.g. 000002) | 5 digits (e.g. 02333) |
| Pre-opening Session |
09：15 ─ 09：30 * Orders and order cancellations can be accepted at 09:10 |
09：15 ─ 09：30 * Orders and order cancellations can be accepted at 09:10 |
09：00 ─ 09：22 |
| Trading Hour |
09：30 ─ 11：30 13：00 ─ 15：00 * Orders and order cancellations can be accepted at 12:55 |
09：30 ─ 11：30 13：00 ─ 14：57 * Orders and order cancellations can be accepted at 12:55 |
09：30 ─ 12：00 13：00 ─ 16：00 |
| Closing Call Auction | - | 14：57 ─ 15：00 | 16：01 ─ 16：10 |
| Board lot size | 100 shares per lot | 100 shares per lot | Subject to the listing company |
| Tick Size | RMB¥0.01 | RMB¥0.01 | Subject to the stock price |
| Price Limit |
General price limit of ±10% based on previous closing price Special Price Limit: ±5% for ST and *ST stock |
General price limit of ±10% based on previous closing price Special Price Limit: ±5% for ST and *ST stock |
No Limit |
| Upper limit for Order size | 1,000,000 shares | 1,000,000 shares | 3,000 lots |
| Day (Turnaround) Trading |
Day trading is not allowed. Buying SSE / SZSE Securities on T-day can only sell the shares on and after T+1 |
Day trading is not allowed. Buying SSE / SZSE Securities on T-day can only sell the shares on and after T+1 |
Allowed |
| Odd lot trade | For sell order only | For sell order only |
For both buy and sell order (the price of odd lot trade may be lower) |
| Fee |
Handling Fee (0.00487%) Securities Management Fee (0.002%) Transfer Fee* (0.004%) Seller Stamp Duty (sell side only,0.05%) |
Handling Fee (0.00487%) Securities Management Fee (0.002%) Transfer Fee* (0.004%) Seller Stamp Duty (sell side only,0.05%) |
CCASS Stock Settlement Fees (0.004%) Trading Fee (0.00565%) Transaction Levy (0.0027%) Stamp Duty (0.1%) Accounting and Financial Reporting Council Transaction Levy (0.00015%) |
| Settlement Cycle |
Securities settlement on Trade day Money settlement on T+1 day |
Securities settlement on Trade day Money settlement on T+1 day |
Both Securities settlement and Money settlement on T+2 day |
| Corporation action notice | SSE / SZSE Website | SSE / SZSE Website | HKEX news Website |
Northbound Trading Important Notice
- It should be noted that the current Investor Compensation Fund will not cover any Northbound activities.
- Similar to any overseas investment which involves a sub-custody arrangement, investors will also be facing the counterparty risks of any additional parties along the value chain, and in this case, ChinaClear which is the central registration company in the Mainland.
