Sale of HKEx-Shanghai Stocks Control Displays Mainland Rules Apply

Published By : 11 Aug 2014 | Published By : QYRESEARCH

Traders that want to sell their shares which are listed in Shanghai need to transfer their securities to a broker to comply with the Chinese regulations, according to Charles Li the CEO at Hong Kong Exchanges and Clearing Limited.

Investors that are using the Shanghai- Hong Kong exchange link for accessing China’s USD 3.6 trillion stock market need to follow the mainland rules. The pressure on mainland authorities and Hong Kong is growing to deliver clarity on rules of trading before the link which will allow foreigners an unprecedented control over the biggest emerging stock market.

According to Li, the system will not be perfect but the exchanges are pushing themselves forward due to the tie up and it will help open up the market in China and give rise to Hong Kong’s role as a leading global financial hub.

However, there are many constraints in the path of this merger. The exchange link will begin in October, and Hong Kong will not be completely ready before the month of Octobers. Regulators might announce the start date of the link two weeks before it begins.

According to Charles Li, if they wait for the mainland market to synch with Hong Kong’s, then they would end up waiting a decade or longer than that. He also said that they have managed to find a solution to most of the hurdles which are aligning two different markets. Some of these differences are so significant that their solutions will inevitably limit the market. Authorities have stated previously in the month of April that they will start the link around six months time.
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