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Introduction to China Connect

 

What is China Connect?

Hong Kong – China Stock Connect (“China Connect”) is the establishment of mutual market access between the Mainland and Hong Kong, with Shanghai and Shenzhen Connect for the stock market to enable investors of their respective market to trade designated equity securities listed in the other’s market.


 

What is the difference between Northbound Trading and Southbound Trading?

  1. The stocks in Northbound Trading are traded in CNY and settled in CNH by Hong Kong and overseas investors.

  2. The stocks in Southbound Trading are traded only by Mainland institutional investors and individual investors who have CNY 500,000 in their investment and cash accounts.


 

Who is eligible to apply for China Connect trading facility?

If you are

  1. non-citizen & non-permenent resident of the People Republic of China (PRC), and

  2. holding a valid trading account maintained with CGS-CIMB with non-ringgit securities facility;

    you are eligible to apply for China Connect trading facility.


Note: Islamic, Margin, Clicks Trader, Futures and Corporate Trading Accounts are not eligible to apply for China Connect.


 

What are the steps to apply for China Connect at iTrade platforms?

  1. You are required to sign up for cross border trading facility if you do not have it.

  2. Tick and agree the T&C for “Northbound Trading” by clicking “Other Services” > “Application for Northbound Trading….” > “Register” to apply for BCAN (Broker to Client Assigned Number). Kindly take note that 1 BCAN, only applies to 1 NRIC and is tagged to 1 trading account only.

        Italian Trulli

  1. If your account meets the eligible requirements, you will be able to register and your request will be processed within 2-3 working days.

  2. Once activated, you will be able to see Shanghai and Shenzhen Exchanges Price Feed (Delayed 15 minutes) under “Exchanges” button at CGS-CIMB iTrade.


 

What are the securities eligible for trading?

Only A-Shares and ETF of the following 2 Exchanges will be included for trading. Whilst for B Shares, Bonds and other listed securities will not be included. Also, at this stage, the program will be for secondary market trading only; i.e., it will not be applicable to IPOs.


Eligible securities under the initial phase are constituent stocks of:

Shanghai-HK Connect

Shenzhen-HK Connect

Shanghai Stock Exchange (SSE) 180 Index

Constituent stocks of the SZSE Component Index

SSE 380 Index

SZSE Small/Mid Cap Innovation Index which have a market capitalisation of not less than CNY 6 billion

All SSE listed A-Shares plus any other A-Shares which have corresponding H shares listed on SEHK except A-Shares shares not traded in CNY and shares included in the "risk alert board

All SZSE listed A-Shares which have corresponding H shares listed on SEHK except A-Shares shares not traded in CNY and shares included in the "risk alert board" or under delisting arrangement

* Full list of eligible securities is available on the HKEX website (http://www.hkex.com.hk/eng/market/sec_tradinfra/chinaconnect/Eligiblestock.htm)


Important Notes

The following securities are NOT applicable for “Retail Client”. It is only applicable for Institutional Professional Investors. However, it still appears in iTrade price feed but order submitted by the client will be rejected.

  1. ChiNext Securities of SZSE (stock code start with 30xxxx)

  2. STAR market of SSE (stock code start with 68xxxx)

  3. Special Segregated Account (SPSA)

     

What are the trading hours?

Trading Session

Trading Hours

Time for Exchange Participant (EP) to input Northbound orders

Opening Call Auction

9:15 a.m. – 9:25 a.m

9:10 a.m. – 11:30 a.m.

Continuous Auction (Morning)

9:30 a.m. – 11:30 a.m

Continuous Auction (Afternoon)

1:00 p.m. – 2:57 p.m

12:55 p.m. – 3:00 p.m.

Closing Call Auction

2:57 p.m. – 3:00 p.m

 

 

Important Notes

  09:20am - 09:25am

  SSE/SZSE will not accept order cancellation

  02:57pm – 03:00pm

  SSE/SZSE will not accept order cancellation

  09:10am - 09:15am
  09:25am - 09:30am
  12:55pm - 01:00pm

  Orders and order cancellations can be accepted by SEHK but will not be processed 
  by SSE/SZSE until SSE’s and SZSE's market open

  Although EP can input Northbound orders from 9.10am to11.30am and 12.55pm to 3.00pm, please note the
  Exchange will only process the order during the trading hours
.


 

Is China Connect price feed displayed in real time?

No, the price feed is delayed for 15 minutes.


 

What are the trading rules?

Item

China Connect

Order Type

Limit order (Day / GTD). SSE and SZSE limit orders can be matched at the specified price or a better price

Board Lot

Minimum of 100 shares, maximum of 1 million shares. Tick size is CNY 0.01

Odd Lot

Only applicable for sell order and through offline order. Minimum online trade through iTrade platforms is 100 units

Short Selling

Not allowed

Intra-Day Contra Trade (T)

Not allowed

Inter-Day Contra Trade (T+1)

Allowed

Trading on HK holidays

Not allowed

Order Modification

Allowed

Margin and SBL

Not available

Price Limit

±10% on the previous closing price.

Less than 3% of current best bid price (if no latest trade price) or
previous Close (if both are not available)

Trading Currency

CNY

Settlement Currency

MYR / CNH (Default settlement currency will be MYR for contra trading)

Settlement Cycle

T+1

Block Trade

Not allowed

 

 

What is the settlement cycle for China Connect trades?

Payment due date is T+1. Hence, you can only sell and perform settlement of shares on T+1. Force selling will take place on T+2 morning if no payment from clients by T+1.


 

What is the settlement currency for China Connect?

Settlement currency for China Connect can be either CNH (Offshore China Yuen currency) or MYR. Please take note that the denomination “CNY” displayed at iTrade platform is referring to traded currency, settlement currency for China Connect is to be denoted as CNH.


 

What is the difference between CNY and CNH?

  1. CNY - CNY is Renminbi that’s traded on Mainland China

  2. CNH - CNH is Renminbi that’s traded offshore from Mainland China, such as in Hong Kong


 

Am I able to remit fund from my trust account to my CNY bank account maintained in Mainland China?

Remittance or fund transfer from our end to your client’s CNY bank account maintained with mainland China is not allowed. However, you can remit CNH currency to your bank account maintained outside of Mainland China, eg: Bank of China located in KL.


 

Does contra trading allow in China Connect?

Intra-day contra (T day contra) is not allowed. However, contra is allowed on T+1. Default settlement currency will be MYR for contra trading.


 

Will China Connect contract be amalgamated?

No, the contract will not be amalgamated.


 

What is the default currency to be paid to clients for Corporate Actions, i.e Dividend?

The default currency is in SGD.


 

Where can I check SSE and SZSE trading hour and trading calendar?

The information is available at HKEx website at https://www.hkex.com.hk/Mutual-Market/Stock-Connect/Reference-Materials/Trading-Hour,-Trading-and-Settlement-Calendar?sc_lang=en


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