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Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect Basic Trading Rules

November 18, 2016 09:43
source: Oriental Wealth Network

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  >>>Hong Kong Stock Connect Basic Trading Rules and Shenzhen-Hong Kong Differences

Investors opened the Hong Kong Stock Connect (“Hong Kong Stock Connect”) trading authority under Shenzhen-Hong Kong Stock Connect and officially entered the actual stage of Hong Kong Stock Connect. The market environment that the Hong Kong stock market and mainland investors are familiar with has many different rules. When entering a complex overseas securities market, investors need to familiarize themselves with the “battlefield”, understand the rules, and forecast risks in order to be able to focus on their own investment decisions.

  First, the basic trading rules of Hong Kong stocks

【account】

Shenzhen-Hong Kong Stock Connect and Shanghai-Hong Kong Stock Connect adopt a "dual-channel" independent operation mechanism. Stocks in Hong Kong Stock Connect under Hong Kong Stock Exchange and Hong Kong Stock Connect under the Shanghai-Hong Kong Stock Connect cannot be cross-sell, but the Shanghai-Shenzhen Hong Kong Stock Connect Account sells Hong Kong stocks. Funds can be used interchangeably.

Currency

The Hong Kong Stock Connect transaction is quoted in Hong Kong dollars, settled in RMB and settled.

【Order Type】

When mainland investors participate in the Hong Kong Stock Exchange stock transaction, they can only use two types of orders: In the bidding period, they should be entrusted with a “bid price limit order”; during the continuous trading period, an “enhanced limit order” should be used to entrust.

[Delegation declaration]

Investors participating in the Hong Kong Stock Exchange commissioning application are required to enter parameters such as the stock code, the buying and selling price, and the number of transactions. The prices quoted by investors follow Hong Kong's local quotation rules. In the Hong Kong stock market, the opening quotation rules are different from the quotation rules for continuous trading sessions. However, the investor’s order prices entered during these two periods cannot be greater than the previous day’s closing prices or At nine-fold or more and less than one-ninth of the market price, each order must not exceed 3,000 shares. For details of the specific quotation rules, investors can log on to the website of the Stock Exchange and refer to the “Exchange Rules” in the “Regulations” option under “Regulations and Supervision”.

In addition, Hong Kong Stock Exchange investors can only withdraw orders at the corresponding time without modifying the order, the withdrawal time is 9:00-9:15; 9:30-12:00; 12:30-16:00; 16:01 -16:06.

[Number of tradable shares]

The balance of Hong Kong stocks in the investor’s securities account is divided into the number of transactions, the balance held at the end of the day, and the amount of uncompleted settlements. If a freeze occurs, it also includes the number of freezes. The formula for calculating the tradable quantity of Hong Kong Stock Exchange Investors is:

Tradable amount = balance held at the end of the day + uncompleted settlement amount - frozen amount

When the investors bought the Hong Kong stocks on the net, the uncompleted settlement amount was positive; when the investors sold the Hong Kong stocks on the net, the uncompleted settlement amount was negative.

[stock transactions]

Less than a handful of "fragmented stocks" in the hands of mainland investors will need to be traded through the "broken share/special trading unit market" of the Stock Exchange trading system. Hong Kong stock investors can only sell odd shares in the fragmented market and cannot buy it.

  Second, Shenzhen and Hong Kong trading system differences

There are many differences in the stock market trading system between Shenzhen and Hong Kong. It is necessary for investors to do their homework in advance and discern the differences so that they can do a good job in the investment of Hong Kong stocks. In order to facilitate investors' understanding, we have sorted out some of the major differences between Shenzhen and Hong Kong for your reference:

First, the transaction settlement mechanism is different. Unlike the T+1 trading system in the mainland A-share market, Hong Kong stocks adopt the T+0 swing transaction and the T+2 settlement system, which means that investors can sell on the same day they buy Hong Kong stocks and sell on T+2. The equity of the security is still available before the settlement is completed on a daily basis.

The second is that the limits of price increase and decrease are different. Shenzhen A-share market stocks,Fund transactionsThere is a 10% price increase and decrease limit, ST and *ST and other special-executed stocks have a 5% price increase and decrease limit; the Hong Kong stock market does not have a price limit, but the stock exchange to prevent individual stock prices in the short term Volatility, on August 22, 2016, introduced a market volatility adjustment mechanism. That is, some stocks that are subject to market volatility adjustment mechanism will trigger a five-minute cooling-off period when price fluctuations occur during the monitoring period. During the cooling-off period, trading prices will be affected. The limit of the upper and lower 10% range of the last trading price 5 minutes before the trigger.

Third, the rules for trading units are different. The number of shares bought in Shenzhen A-shares bidding transaction shall be 100 shares or an integer multiple thereof; there shall be no uniform requirement for the number of shares of each “hand” in Hong Kong stocks trading. The listed companies of Hong Kong stocks may set up a different number of their own lot-share trading units, which may be 100, 200, 1000 or 5000 and so on.

Fourth, the smallest quotation unit is different. Shenzhen A-shares are RMB 0.01; Hong Kong stocks with different prices have different minimum quoted units. The higher the stock price, the larger the smallest quoted unit.

Fifth, the transaction schedule is different. The trading hours of Shenzhen A-Shares are divided into: opening auction period (9:15-9:25), continuous auction period (9:30-11:30 and 13:00-14:57), closing auction period ( 14:57-15:00); The trading hours for investors to trade Hong Kong stocks shall comply with the relevant provisions of the Stock Exchange. The details are as follows: (attached)

Sixth is the special arrangement of "Hakkaichi". The Hong Kong stock market also has a rather special "half-day market", that is, if on Christmas Eve (December 24th), New Year's Eve (December 31st) and Lunar New Year's Eve (Last Day of the Lunar New Year) is the trading day, the Hong Kong market is only There is a half-day deal. If this day is the Hong Kong Stock Connect trading day, the Hong Kong Stock Connect transaction on that day will only be traded for half a day.

Seventh, the quotation shows differently. When the stock price of the Hong Kong stock market rises, the color displayed on the stock quotes screen is green, and when it falls, it is red, which is different from the mainland securities market. However, the market trend provided by different marketers can be reset. When investors use the market software, they should carefully check the software's parameter settings to avoid the risk of inertial thinking.

Eighth, differences in risk warning and delisting systems. In Shenzhen A-shares, warning signs (for example, ST, *ST, etc.) are added before the securities abbreviation, to indicate investors' investment risks, and delisting stocks are arranged for the delisting consolidation period. After delisting, stocks can still enter. The national small and medium sized enterprise share transfer system is listed on the stock exchange; the stock exchange uses non-quantitative delisting standards and there are no delisting risk warnings, delisting filing period, etc. Once Hong Kong stock pass stocks delist from the stock exchange market, there is no relevant follow-up transaction. Arrangements, investors will face the risk of not being able to continue to buy or sell related stocks through Hong Kong stocks.

For investors in Hong Kong Stock Exchange, we should carefully understand the above-mentioned differences between the Shenzhen and Hong Kong cities. This is both a real weapon and a defensive shield, so that we can know how to do it well in the Hong Kong stock market.


  >>>Notice on Amendments to the "Shanghai Stock Exchange Shanghai-Hong Kong Stock Exchange Pilot Program"

Market participants:

In accordance with the relevant arrangements for the trading mechanism adjustments such as the closing of the auction by the Stock Exchange of Hong Kong Limited (hereinafter referred to as the Stock Exchange of Hong Kong Stock Exchange), with the approval of the China Securities Regulatory Commission, the Shanghai Stock Exchange conducted the "Measures for the Shanghai-Hong Kong Stock Exchange Pilot Program of the Shanghai Stock Exchange". The amendments are as follows:

1. The first paragraph of Article 63 shall be amended as: "The trading hours and trading hours of the Hong Kong Stock Exchange shall be announced by the Securities Exchange Company of the Stock Exchange on its designated website. The trading hours for each trading day of the Hong Kong Stock Exchange include pre-opening hours and continuous trading. The time period and closing auction trading hours shall be implemented in accordance with the regulations of the Stock Exchange."

2. The second paragraph of Article 64 shall be amended as: "Investors participating in the Exchange's automated trading system shall be entrusted with a bid limit trading period at the time before the opening of the Stock Exchange and during the auction period for closing the market, The period of continuous trading should be enhanced by a limit order."

3. The second paragraph of Article 81 shall be amended to read as follows: "If the current day's quota has been used up on the Stock Exchange's continuous trading hours or during the closing auction trading hours, the stock exchange service company of the Stock Exchange will stop accepting the subsequent purchase declaration on the same day, but it still accepts it. Sales declarations. If you stop accepting purchase declarations during the above period, you will not be resumed on the same day, unless otherwise provided by this Law."

4. Article 112(17) is amended to read: “Attempt Limit Order: A type of trading in the pre-market opening hours and closing auctions as prescribed by the Stock Exchange Rules of the Stock Exchange. During the time period, orders can be placed at a specified price or at a better price."

The above amendments have been implemented since July 25, 2016.

Notice is hereby given.

Shanghai Stock Exchange

July 18, 2016

                (Editor: DF120)

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