Both Interactive Brokers, in its role as a China Connect Exchange Participant, and investors trading SSE/SZSE Securities through Interactive Brokers are required to comply with these requirements. 

I. Disclosure Obligation

-      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 China Securities Regulatory Commission (“CSRC”) and the relevant exchange, and inform the Mainland listed company within three working days of reaching 5%.

-      The investor is not allowed to continue purchasing or selling shares in that Mainland listed company during the three day notification period.

-      For such investor, whenever there is an increase or decrease in his shareholding that equals or exceeds 5% of the existing holdings, he is required to make disclosure within three working days of the change. 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/her falling below 5% of the relevant Mainland listed company, the investor is required to disclose the information within three working days of the event.

II. Shareholding Restriction

-      A single foreign investor’s shareholding in a Mainland listed company is not allowed to exceed 10% of the company’s total issued shares, while all foreign investors’ shareholding in the A shares of the listed company is not allowed to exceed 30% of its total issued shares.

-      When the aggregate foreign shareholding of an individual A share reaches 26%, SSE or SZSE  will publish a notice on its website.

-      Once SSE or SZSE informs the Stock Exchange of Hong Kong Limited (SEHK) that the aggregate foreign shareholding of an SSE or SZSE Security reaches 28%, further Northbound buy orders in that SSE or SZSE Security will not be allowed, until the aggregate foreign shareholding of that SSE or SZSE Security is sold down to 26%.

-      If the 30% threshold is exceeded due to Shanghai Connect or Shenzhen Connect, HKEX will identify the relevant China Connect Exchange Participant and require it to follow the forced-sale requirements, whereupon the foreign investors concerned will be requested to sell the shares on a last-in-first-out basis within five trading days of notifying the relevant China Connect Exchange Participant.

III. Additional Information

For additional information, including details of position disclosure and restriction, please refer to the following website links:

Stock Connect FAQ (10 April 2017): http://www.hkex.com.hk/-/media/hkexmarket/mutual-market/stock-connect/getting-started/information-bookletand-faq/faq/faq_en

Chapter 14A China Connect Service - Shanghai:

http://www.hkex.com.hk/-/media/hkex-market/services/rules-and-forms-andfees/rules/sehk/securities/rules/chap-14a_eng

Chapter 14B China Connect Service - Shenzhen:

http://www.hkex.com.hk/-/media/hkex-market/services/rules-and-forms-andfees/rules/sehk/securities/rules/chap-14b_eng