CSRC Announces Plans to Expand Stock Connect

The CSRC (China Securities Regulatory Commission) has announced plans to expand Stock Connect to give mainland Chinese investors access to overseas companies primary-listed in Hong Kong.

Speaking at a financial forum in Beijing on Friday (2 September), CSRC vice chairman Fang Xinghai said more companies listed in Shanghai and Shenzhen will also be added to Stock Connect.

He added that regulators in China and Hong Kong are also studying a plan to create a special trading counter in Hong Kong for yuan-denominated stocks to facilitate the internationalisation of the Chinese currency.

Earlier this year, a working group comprising the SFC (Securities and Futures Commission), HKMA (Hong Kong Monetary Authority) and HKEX (Hong Kong Exchanges and Clearing) completed a feasibility study on promoting trading of yuan-denominated securities in Hong Kong.

Fang also said the CSRC will also support Hong Kong to introduce treasury bond futures and expedite the opening up of mainland treasury bond futures market to overseas investors "to realise coordinated development in the two markets."

On Friday, Chinese exchanges announced a further opening up of futures and options contracts trading in the mainland to foreign investors, as part of efforts to deepen the country's global pricing power in commodities.

In July, ETFs were added to the Stock Connect scheme, which links markets in Shanghai and Shenzhen with Hong Kong. Regulators have also recently proposed to align Northbound and Southbound trading holidays under the programme in a bid to boost trading volume.

A new mutual market access programme between China and Hong Kong known as Swap Connect is also expected to be launched early next year.