Customer Service FAQs Shanghai and Shenzhen Connect

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FAQs

FAQs

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Shanghai and Shenzhen Connect

    Eligible Investors
  1. It is the establishment of mutual market access between the Mainland and Hong Kong, with Shanghai and Shenzhen Connect for the stock market.

    Shanghai Connect is a securities trading and clearing links programme developed by Hong Kong Exchanges and Clearing Limited (HKEX), Shanghai Stock Exchange (SSE) and China Securities Depository and Clearing Corporation Limited (ChinaClear), aiming to achieve a breakthrough in mutual market access between the Mainland and Hong Kong.

    Under Shanghai Connect, The Stock Exchange of Hong Kong Limited (SEHK), a wholly-owned subsidiary of HKEX, and SSE have established mutual order-routing connectivity and related technical infrastructure to enable investors of their respective market to trade designated equity securities listed in the other's market.

    Hong Kong Securities Clearing Company Limited (HKSCC), also a wholly-owned subsidiary of HKEX, and ChinaClear are responsible for the clearing, settlement and the provision of depository, nominee and other related services of the trades executed by their respective market participants and/or investors.

    Shanghai Connect was launched on 17 November 2014. Information relating to the development of Shanghai Connect can be found on the HKEX website.

    Following the successful launch of Shanghai Connect, Shenzhen Connect is considered as its natural extension. Shenzhen Connect will by and large apply similar programme principles and design.

    On 16 August 2016, the Securities and Futures Commission ("SFC") and China Securities Regulatory Commission ("CSRC") made a Joint Announcement ("Joint Announcement") regarding the in-principle approval for the development of Shenzhen Connect for the further establishment of mutual stock market access between the Mainland and Hong Kong.

    As of 2016 December 07, eligible SSE-listed stocks of Shanghai Stock Connect are more than 560, eligible Shenzhen Stock Exchange (SZSE)-listed stocks of Shenzhen Stock Connect are more than 670 and also there are more than 200 ChiNext stocks listed on SZSE are eligible in Shenzhen Stock Connect. (Note: Currently, BOOM does not provide trading service for ChiNext Stocks.)
  2. Trading of SSE Securities under Shanghai Connect is open to all Hong Kong and overseas investors including institutional and individual investors.

    Trading of SZSE Securities, under Shenzhen Connect except ChiNext stocks, is open to all Hong Kong and overseas investors including institutional and individual investors. ChiNext stocks will be limited to institutional professional investors during the initial launch of Shenzhen Connect. (Note: Currently, BOOM does not provide trading service for ChiNext Stocks.)
    Eligible Securities
  1. Among the different types of SSE-/SZSE-listed securities, only A shares are included in Shanghai and Shenzhen Connect. Other product types such as B shares, Exchange Traded Funds ("ETFs"), bonds, and other securities are not included.

    The Joint Announcement dated 16 August 2016 provides that the CSRC and the SFC have reached consensus to include ETFs as eligible securities under the mutual market access program. A launch date will be announced separately after Shenzhen Connect has been in operation for a period of time and upon the satisfaction of relevant conditions.

    To learn more about the eligible securities of Shanghai and Shenzhen Connect, please refer to: Shanghai and Shenzhen Connect Eligible Securities List (source: HKEx)
    How to Trade?
  1. No need to make additional request. All new clients are ready to trade SSE / SZSE securities under the Shanghai and Shenzhen Connect after opening the account successfully. To learn more about the eligible securities of Shanghai and Shenzhen Connect, please refer to the "Eligible Securities" section of the FAQs.
  2. Yes. All existing clients are ready to trade SSE / SZSE securities under the Shanghai and Shenzhen Connect without any additional setting or application. To learn more about the eligible securities of Shanghai and Shenzhen Connect, please refer to the "Eligible Securities" section of the FAQs.
    Trading Hours
  1. Hong Kong and overseas investors are required to follow SSE's trading hours to trade SSE Securities (i.e. Northbound trading). It includes an opening call auction session from 9:15 a.m. to 9:25 a.m., and two continuous auction sessions from 9:30 a.m. to 11:30 a.m. and 1:00 p.m. to 3:00 p.m.

    SEHK will accept Northbound orders from EPs five minutes before the opening of each SSE trading session. Therefore, EPs can input Northbound orders from 9:10 a.m. to 11:30 a.m. and from 12:55 p.m. to 3:00 p.m. Hong Kong and overseas investors are required to follow SZSE's trading hours to trade SZSE Securities (i.e. Northbound trading). It includes an opening call auction session from 9:15 a.m. to 9:25 a.m., two continuous auction sessions from 9:30 a.m. to 11:30 a.m. and 1:00 p.m. to 2:57 p.m. and one closing call auction session from 2:57 p.m. to 3:00 p.m.

    SEHK will accept Northbound orders from EPs five minutes before the opening of each SZSE trading session. Therefore, EPs can input Northbound orders from 9:10 a.m. to 11:30 a.m. and from 12:55 p.m. to 3:00 p.m. However, it should be noted that SZSE will only process the orders during SZSE's trading hours.
  2. EPs can only trade SSE and SZSE Securities on a Hong Kong business day, and only if both the markets in Hong Kong and Mainland are open for trading (T-day) and banking services are available in the Hong Kong and Mainland markets on the corresponding money settlement days (T+1). This arrangement is essential in ensuring that proper banking support is available for CCCPs to settle their money obligations for Northbound trades on T+1.

    Below is an example illustrating the holiday arrangement of Northbound trading of SSE and SZSE Securities:

    Shanghai Connect or Shenzhen Connect
    Date Hong Kong Mainland Trading(T-day) Money Settlement (for T-1 day's trades) Securities Settlement (for T-day's trades)
    23 Mar 2016 (Wed)
    Hong Kong
    Business Day
    Mainland
    Business Day
    Trading (T-day)
    Money Settlement (for T-1 day's trades)
    Securities Settlement (for T-day's trades)
    24 Mar 2016 (Thu)
    Hong Kong
    Business Day
    Mainland
    Business Day
    Trading (T-day)
    ^
    Money Settlement (for T-1 day's trades)
    Securities Settlement (for T-day's trades)
    ^
    25 Mar 2016 (Fri)
    Hong Kong
    Public Holiday
    Mainland
    Business Day
    Trading (T-day)
    Money Settlement (for T-1 day's trades)
    Securities Settlement (for T-day's trades)
    28 Mar 2016 (Mon)
    Hong Kong
    Public Holiday
    Mainland
    Business Day
    Trading (T-day)
    Money Settlement (for T-1 day's trades)
    Securities Settlement (for T-day's trades)
    29 Mar 2016 (Tue)
    Hong Kong
    Business Day
    Mainland
    Business Day
    Trading (T-day)
    Money Settlement (for T-1 day's trades)
    #
    Securities Settlement (for T-day's trades)

    ^ 24 Mar 2016 (Thu) is a business day for both Hong Kong and Mainland. However, if EPs trade SSE and SZSE Securities on 24 Mar 2016, CCCPs may have difficulty settling their money positions with HKSCC on 25 Mar 2016 (Fri), which is a public holiday in Hong Kong. Hence Shanghai Connect and Shenzhen Connect will not be open for trading SSE and SZSE Securities on 24 Mar 2016.

    # There will not be any money settlement for Northbound trades on 29 Mar 2016 as 28 Mar 2016 is not open for Northbound trading. However, as CCASS is open for business on 29 Mar 2016, it will still process money transactions in relation to nominees activities with respect to SSE and SZSE Securities, if any.
  3. The Northbound trading arrangement under severe weather conditions will be as follows:
    1. If SSE or SZSE is suspended due to inclement weather, there will be no Northbound trading in the relevant market and Hong Kong investors and CCEPs will be informed by SEHK;
    2. If typhoon signal number 8 or above and/or black rainstorm warning is issued in Hong Kong before the Hong Kong market opens, Northbound trading will not open. If the signal or warning is subsequently discontinued on the same day, arrangement for the resumption of Northbound trading will follow that for the SEHK market (detailed arrangement is available on the HKEX website );
    3. If typhoon no. 8 or above is issued in Hong Kong after the Hong Kong market opens but before SSE's market and SZSE's market open (between 9:00 a.m. and 9:15 a.m.), Northbound trading will not open; and
    4. If typhoon signal number 8 or above is issued in Hong Kong after SSE's market and SZSE's market have opened:
      • Northbound trading will continue for 15 minutes during which order input and order cancellation will be allowed;
      • after 15 minutes and until the close of SSE's market or SZSE's market, only order cancellation will be allowed;
      • in addition to mid-day and day end trade files, preliminary trade files (retrieved through Electronic Communication Platform) will be generated multiple times before the close of SSE's market or SZSE's market so that CCEPs who have inputted order cancellations can use such trade files to continue their reconciliation;
      • HKEX will make broadcast message (via the HKEX website) to provide alerts/warnings to CCEPs on the arrangement when a typhoon is approaching; and
      • EPs are encouraged to make pre-arrangement with their clients to allow them to cancel clients' orders in this situation and conduct order cancellation as soon as possible.

    Scenarios Northbound Trading of SSE / SZSE Securities Money Settlement (for T-1 position) Securities Settlement (for T position)
    1. T8 / Black rainstorm issued before HK market opens (i.e. 9:00 a.m.) and discontinued after 12:00 noon
    Northbound Trading of SSE / SZSE Securities
    Not open
    Money Settlement (for T position)
    No
    Securities Settlement (for T position)
    N/A
    1. T8 issued between 9:00 a.m. and 9:15 a.m.
    Northbound Trading of SSE / SZSE Securities
    Not open
    Money Settlement (for T-1 position)
    Yes
    Securities Settlement (for T position)
    N/A
    1. T8 issued after SSE / SZSE market opens (i.e. 9:15 a.m.)
    Northbound Trading of SSE / SZSE Securities
    Trading will continue for 15 minutes after T8 issuance, thereafter, only order cancellation is allowed till SSE / SZSE market close
    Money Settlement (for T-1 position)
    Yes
    Securities Settlement (for T position)
    Yes
    1. Black rainstorm issued after HK market opens (i.e. 9:00 a.m.)
    Northbound Trading of SSE / SZSE Securities
    Trading continues as normal
    Money Settlement (for T-1 position)
    Yes
    Securities Settlement (for T position)
    Yes
    1. T8 / Black rainstorm discontinued at or before 12:00 noon
    Northbound Trading of SSE / SZSE Securities
    Trading resumes after 2 hours
    Money Settlement (for T-1 position)
    Postpone to 3 p.m.
    Securities Settlement (for T position)
    Yes
    Market Operations and Trading
  1. Currently, all SSE and SZSE Securities are traded in RMB. Investors therefore trade and settle SSE and SZSE Securities via Shanghai Connect and Shenzhen Connect in RMB.
  2. Yes. BOOM account supports 6 currencies (including RMB) and is able to automatically convert your money into settlement currency after trade.
  3. Yes. When clients sold their SSE and SZSE Securities via Shanghai and Shenzhen Connect, the buying power will be increased immediately and is able to trade in any market.
  4. No. Shares purchased by investors cannot be sold before settlement, which means day trading is not allowed.
  5. All SSE and SZSE Securities are subject to the same trading board lot size, which is 100 shares (buy orders must be in board lots). Odd lot trading is only available for sell orders and all odd lots should be sold in one single order. It is common that a board lot buy order may be matched with different odd lot sell orders, resulting in odd lot trades. It should be noted that unlike Hong Kong, board lot and odd lot orders are both matched on the same platform on SSE and SZSE, and subject to the same share price.

    The maximum order size is 1 million shares and the tick size is uniformly set at RMB 0.01.
  6. For SSE Securities, there is a general price limit of ±10% (and ±5% for stocks under special treatment (i.e. ST and *ST stocks) under risk alert) based on previous closing price. All orders input for SSE Securities must be at or within the price limit. Any order with a price beyond the price limit will be rejected by SSE. The upper and lower price limit will remain the same intra-day.

    The same price limit arrangement will apply to SZSE Securities. Stocks traded on SZSE's ChiNext Market are also subject to a ±10% price limit based on the previous closing price.
  7. BOOM's supported order types are "Limit Order", "Market Order" and Chain Order". Please noted that the execution of orders are subject to the limitation of day-trading restriction and price limit.
  8. Northbound trades executed under Shanghai and Shenzhen Connect will follow the settlement cycles of the Shanghai and Shenzhen markets. Both markets adopt the same settlement cycle – stock settlement on T day, and money settlement on T+1 day. For securities settlement, ChinaClear will debit or credit its participants' (including HKSCC as clearing participant) stock accounts before 6:00pm on T day to settle their trades in the Connect Markets. To facilitate the settlement cycles of Connect Securities, HKSCC will conduct securities settlement on Northbound trades for its CCASS Participants via two rounds of Batch Settlement Runs at around 5:30pm and 7:00pm on T day for each Connect Market.

    Money settlement for Northbound trades will be effected by around noon on T+1 day on a net money position of SSE Securities and SZSE Securities.
    Market Information
  1. For Shanghai Connect, the 1-depth data of eligible stocks for Southbound trading is provided via SSE's platform. For Shenzhen Connect, the 1-depth data of eligible stocks for Southbound trading will be provided through SZSE's platform.

    Data content from both SSE and SZSE is the same and it includes Best Bid Price/Volume, Best Offer Price/Volume, Volume Traded, Value Traded, Previous Price, Open Price, Latest Price, Highest Price and Lowest Price.
  2. All approved corporate actions of SSE Securities and SZSE Securities are announced by issuers through the SSE website or the SZSE website, as the case may be, and officially appointed newspapers (both the printed papers and their websites): the Shanghai Securities News, Securities Times, China Securities Journal, Securities Daily and www.cninfo.com.cn. Investors are reminded that issuers listed on the ChiNext Market are required to publish certain corporate announcements on their corporate websites and the officially appointed websites only. HKSCC will also record all corporate actions relating to SSE and SZSE Securities in CCASS and advise CCASS Participants of the details via the CCASS terminals as soon as practicable on the announcement date. Hong Kong and overseas investors can visit the SSE, SZSE and newspaper websites for the latest listed company announcements.

    Hong Kong and overseas investors can also visit HKEX website's China Stock Markets Web for the company announcements of Connect Securities issued on the previous trading day.

    Hong Kong and overseas investors trading Connect Securities through Shanghai and Shenzhen Connect should note that SSE-listed and SZSE-listed issuers will continue to publish corporate documents in Chinese only as their current practice, and English translation will not be available.
    Pass-on Charges and Tax Levies
  1. Under Shanghai and Shenzhen Connect, Hong Kong and overseas investors will be subject to the following fees and levies imposed by SSE, SZSE, ChinaClear, HKSCC or the relevant Mainland authority when they trade and settle SSE Securities and SZSE Securities:

    Items Rate Charged by
    Handling Fee
    Rate
    0.00487% of the consideration of a transaction per side
    Charged by
    SSE / SZSE
    Securities Management Fee
    Rate
    0.002% of the consideration of a transaction per side
    Charged by
    CSRC
    Transfer Fee
    Rate
    0.002% of the consideration of a transaction per side
    Charged by
    ChinaClear Shanghai / ChinaClear Shenzhen
    Rate
    0.002% of the consideration of a transaction per side
    Charged by
    HKSCC
    Stamp Duty
    Rate
    0.1% of the consideration of a transaction on the seller
    Charged by
    SAT


    All the above fees and levies will be collected from CCASS Participants' designated bank accounts at day-end of T day.

    Investors should note that certain existing CCASS fees still apply, including stock settlement fee for settlement instructions and money settlement fee. HKSCC also imposes a Portfolio Fee on its CCASS Participants for providing depository and nominee services for their SSE Securities and SZSE Securities held in CCASS. The Portfolio Fee will be collected in HKD on a monthly basis based on a single portfolio of SSE Securities and SZSE Securities of each CCASS Participant. The relevant fee arrangement may change subject to SFC's approval.

    Besides, taxes imposed by the State Administration of Taxation (SAT), including stamp duty and dividend tax will also be applied to the Northbound trades and SSE Securities acquired through Shanghai Connect as well as SZSE Securities acquired through Shenzhen Connect. Any additional tax imposed by the SAT, if applicable, will be subject to further clarification with the SAT.

    The following illustrates the calculation of the relevant fees and taxes using Northbound Trading and Clearing under Shanghai Connect as an example:

    Assume that on T day, a Clearing Participant has to clear Northbound Sell Trades with details as follows:

    Trade Quantity: 300 shares Trade Price: ￥ 10 per share

    Fee Type Description Formula Amount*
    Handling Fee
    Description
    0.00487% of the consideration of the Sell Trade
    Formula
    300 X ¥ 10 X 0.00487% = ¥0.1461
    Amount*
    ¥0.15
    Securities Management Fee
    Description
    0.002% of the consideration of the Sell Trade
    Formula
    300 X ¥10 X 0.002% = ¥0.06
    Amount*
    ¥0.06
    Transfer Fee
    Description
    0.002% of the consideration of the Sell Trade to be charged under ChinaClear’s Shanghai-Hong Kong Stock Connect Rules
    Formula
    300 X ¥10 X 0.002% = ¥0.06
    Amount*
    ¥0.06
    Description
    0.002% of the consideration of the Sell Trade to be charged under the General Rules of CCASS
    Formula
    300 X ¥10 X 0.002% = ¥0.06
    Amount*
    ¥0.06
    Stamp Duty
    Description
    0.1% of the consideration of the Sale Trade (imposed only on the seller)
    Formula
    300 X ¥10 X 0.1% = ¥3.00
    Amount*
    ¥3.00
    Total transaction cost to settle the Sell Trade
    Amount*
    ¥3.33

    * Note: Fees are rounded to the nearest cent.
    Dividend tax will be withheld by issuers of Connect Securities and ChinaClear upon dividend payment.
    Quota
  1. Trading under Shanghai and Shenzhen Connect will be subject to a Daily Quota. There is no Aggregate Quota for Shanghai and Shenzhen Connect as the Aggregate Quota for Shanghai Connect was abolished since 16 August 2016 and none will be introduced for Shenzhen Connect.

    The Daily Quota is applied on a "net buy" basis. Based on that principle, investors are always allowed to sell their cross-boundary securities regardless of the quota balance.
  2. The Daily Quota limits the maximum net buy value of cross-boundary trades under each of Shanghai and Shenzhen Connect each day. 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.

    Daily Quota Balance = Daily Quota – Buy Orders + Sell Trades + Adjustments

    The Daily Quota will be reset every day. Unused Daily Quota will NOT be carried over to next day's Daily Quota.

    If the Northbound Daily Quota Balance drops to zero or the Daily Quota is exceeded during the opening call auction 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.

    Once the Northbound Daily Quota Balance drops to zero or the Daily Quota is exceeded during a continuous auction session, no further buy orders will be accepted for the remainder of the day. The same arrangement will be applied to the closing call auction of SZSE. 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 and SZSE respectively unless otherwise cancelled by relevant SEHK Participants.
  3. To prevent mischievous behavior towards the use of the Northbound quota, SEHK has put in place a dynamic price checking for buy orders.

    Buy orders with input prices lower than the current best bid (or last traded price in the absence of current best bid, or previous closing price in the absence of both current best bid and last traded price) beyond a prescribed percentage will be rejected by CSC. During opening call auction, the current bid (or previous closing price in the absence of the current bid) will be used for checking. During closing call auction of SZSE, the current bid (or last traded price in the absence of the current bid) will be used for checking. Dynamic price checking will be applied throughout the trading day, from the 5-minute input period before the start of opening call auction until market close of SSE/SZSE. SEHK has set the dynamic price checking at 3% during the initial phase. The percentage may be adjusted from time to time subject to market conditions.
  4. Anyone who wish to amend their Northbound orders must cancel the original orders first and then input new orders. The quota released at the time of order cancellation may immediately be taken up by orders input by others. Hence, quota cannot be "reserved" by using this method. Do not place buy orders with fictitious prices in order to secure or reserve the quota.
    Limitation & Important Notes
  1. Investors will only be allowed to sell but restricted from buying SSE Securities via Shanghai Connect if:
    1. such securities subsequently cease to be a constituent stock of the relevant indices; and/or
    2. they are subsequently placed under risk alert; and/or
    3. the corresponding H shares of such securities are subsequently delisted from SEHK, as the case may be; and/or
    4. daily quota is used up or the buy order exceeds the remaining daily quota
    Investors will only be allowed to sell but restricted from buying SZSE Securities via Shenzhen Connect if:
    1. such securities subsequently cease to be a constituent stock of the relevant indices; and/or
    2. such securities are, based on any subsequent periodic review, determined to have a market capitalisation of less than RMB 6 billion; and/or
    3. they are subsequently placed under risk alert; and/or
    4. the corresponding H shares of such securities are subsequently delisted from SEHK, as the case may be; and/or
    5. daily quota is used up or the buy order exceeds the remaining daily quota
  2. Shanghai Connect and Shenzhen Connect only encompass secondary market trading. Primary market activities, such as initial public offering (IPO) are not supported.
  3. According to the Law of the PRC on Securities, when an investor holds or controls up to 5% of the issued shares of a Mainland listed company, the investor is required to report in writing to the CSRC and the relevant exchange, and inform the listed company within three working days. The investor is not allowed to continue purchasing or selling shares in that listed company during the three days.

    For such investor, every time when a change in his shareholding reaches 5%, he is required to make disclosure (in the same manner as mentioned above) within three working days. From the day the disclosure obligation arises to two working days after the disclosure is made, the investor may not buy or sell the shares in the relevant Mainland listed company.

    If a change in shareholding of the investor is less than 5% but results in the shares held or controlled by him falling below 5% of the relevant Mainland listed company, the investor is required to disclose the information within three working days.
  4. Since SSE and SZSE Securities are issued in scripless form, physical deposits and withdrawals of SSE and SZSE Securities into/from the CCASS Depository are not available.

    As explained above, Hong Kong and overseas investors can only hold SSE and SZSE Securities through their brokers/custodians. Their ownership of such is reflected in their brokers/custodians' own records such as client statements.
  5. BOOM will keep our clients informed of the corporate actions of SSE and SZSE Securities companies if they are required to take actions. Clients should note that the time to take actions for some types of corporate actions of SSE and SZSE Securities companies may be as short as one business day only.

Last Update: July 2017.