SFC welcomes Central Government's support to enhance Hong Kong's IFC status
In his address at a financial forum this morning, Mr Fang Xinghai, Vice-Chairman of the CSRC, announced the broadening of the scope of Stock Connect to include foreign companies primary-listed on the Stock Exchange of Hong Kong Limited to be accessible by Mainland investors via southbound trading while additional companies listed on the Shanghai and Shenzhen stock exchanges can be provided for trading by overseas investors via northbound trading.
“The inclusion of foreign companies in southbound trading of Stock Connect is a significant breakthrough in broadening the mutual access scheme and augmenting the attractiveness of our stock exchange as a leading destination for fundraising by international companies,” said Ms Julia Leung, the SFC's Acting Chief Executive Officer. “The SFC will be working closely with the CSRC, Hong Kong Exchanges and Clearing Limited (HKEX) and its Mainland counterparts to determine additional securities eligible for inclusion in both trading links.”
Mr Fang also announced the CSRC’s support for Hong Kong to introduce treasury bond futures and for expediting the opening up of China’s treasury bond futures market to overseas investors, as well as the inclusion of RMB counters in Stock Connect for southbound trading.
To this end, a working group comprising the SFC, the Hong Kong Monetary Authority and HKEX has completed a feasibility study earlier this year on promoting trading of RMB-denominated securities in Hong Kong and discussions with the CSRC are underway to explore the inclusion of RMB-denominated securities in southbound trading.
“As overseas investment in China’s bond market via Bond Connect increases, the CSRC’s support of introducing treasury bond futures in Hong Kong will help overseas investors better manage the risks associated with their exposures,” said Ms Leung, adding: “The support for Hong Kong to develop an offshore treasury bond futures and RMB dual counter trading will further strengthen Hong Kong's role as a risk management centre and an offshore RMB centre.”
The SFC will be working closely with the CSRC and HKEX on all three initiatives. Further announcement on their details will be made in due course.
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