Hong Kong - China Stock Connect
Hong Kong – China Stock Connect (“China Connect”) is a mutual market access program through which Hong Kong and international investors can trade shares listed on the Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE) via the Stock Exchange of Hong Kong (SEHK) and their existing clearinghouse. As a member of SEHK, IBKR provides you with direct access to trade with eligible listed products on the Shanghai and Shenzhen Stock Exchange. IBKR clients with China Connect trading permissions will be eligible to trade SSE/SZSE securities through Shanghai and Shenzhen - Stock Connect.
Among the different types of SSE/SZSE-listed securities, only A shares (shares in mainland China-based companies that trade on Chinese stock exchange) are included in the Shanghai and Shenzhen Stock Connect.
Shanghai Connect includes all the constituent stocks of the SSE 180 Index, SSE 380 Index and all the SSE-listed A shares that have corresponding H shares listed on the SEHK.
Product List and Stock Codes for SSE
Shenzhen Connect includes all the constituent stocks of the SZSE Component Index, the SZSE Small/Mid Cap Innovation Index that have a market capitalization of not less than RMB 6 billion and all the SZSE-listed A shares that have corresponding H shares listed on SEHK.
Product List and Stock Codes for SZSE
IBKR Commission for Trading SSE/SZSE Securities
Same as trading Hong Kong stocks, IBKR charges only 0.08% of trade value as a commission with a minimum CNH 15 per order. Detailed fee rates can be found in the Hong Kong – China Stock Connect Northbound fee table.
Daily Quota
Trading under Shanghai Connect and Shenzhen Connect is subject to a Daily Quota. The Daily Quota is applied on a “net buy” basis. The Daily Quota limits the maximum net buy value of cross-boundary trades under Shanghai Connect and Shenzhen Connect each day.
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. Or if it happens during a continuous auction session or closing call auction session, no further buy orders will be accepted for the remainder of the day. SEHK will resume the Northbound buying service on the following trading day.
SEHK will also publish the remaining balance of the Aggregate Quota and Daily Quota.
For details, please refer to HKEX Stock Connect FAQ or HKEX Stock Connect Rule 1407
Trading Information of Shanghai and Shenzhen Connect
|
Trading currency |
RMB |
|
Order Type |
IBKR offers various order types but will stimulate the order into limit order for execution. More information can be referred to our website.
|
|
Tick Size / Spread |
Uniform at RMB 0.01 |
|
Board Lot |
100 shares (applicable for buyers only) |
|
Odd Lot |
Sell orders only (odd lot should be made in one single order) |
|
Max Order Size |
1 million shares |
|
Price Limit |
±10% on previous closing price (±5% for stocks under special treatment under risk alert, i.e. ST and *ST stocks) |
|
Day (Turnaround) Trading |
Not allowed |
|
Block Trade |
Not available |
|
Manual Trade |
Not available |
|
Order Modification |
IBKR will cancel and replace the order for any order modification |
|
Settlement cycle |
Securities: Settlement on T day Cash from China Connect trades: Settlement on T+1 day Forex*: Settlement on T+2 day |
*Due to the unsynchronized settlement cycle, clients who exchange CNH themselves should execute the Forex trade one day prior to the stock trade (T-1) to avoid the extra day’s interest payment (considering normal settlement without involving holidays).
Trading Hours
|
SSE/SZSE Trading Sessions |
SSE/SZSE Trading Hours |
|
Opening Call Auction |
09:15 - 09:25 |
|
Continuous Auction (Morning) |
09:30 – 11:30 |
|
Continuous Auction (Afternoon) |
13:00 – 14:57 |
|
Closing Call Auction |
14:57 – 15:00 |
Half-day Trading
If a Northbound trading day is a half-trading day in the Hong Kong market, it will continue until respective Connect Market is closed. Refer to the exchange website for holiday trading arrangements and additional information.
Disclosure Obligation
If client holds or controls up to 5% of the issued shares of China Connect, the client 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 client is not allowed to continue purchasing or selling shares in that Mainland listed company during the three days notification period. Visit the IBKR Knowledge Base for more information.
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. Visit the IBKR Knowledge Base for more information.
Forced-sale Arrangement
Each IBKR client is not allowed to hold more than a specific percentage of the China Connect listing company's total issued shares. HKEX requires the client to follow the forced-sell requirements if the shares exceed the limit:
|
Situation |
Shareholding (in a listed company) |
|
A single foreign investor |
> = 10% of the company’s total issued shares |
|
All foreign investors |
> = 30% of the company’s total issued shares |
Margin Financing
Margin trading in China Connect securities will subject to restrictions and only certain A shares will be eligible for margin trading. Eligible Securities, as determined by SSE and SZSE from time to time, are listed on the HKEX website.
According to the relevant rules of SSE and SZSE, either market may suspend margin trading activities in specific A shares when the volume of margin trading activities for a specific A share exceeds the prescribed threshold. The market will resume margin trading activities in the affected A share when its volume drops below a prescribed threshold.
Stock Borrowing and Lending (SBL)
SBL in China Stock Connect Securities is subject to restrictions set by the SSE or SZSE and stated in the Rules of the Exchange.
IBHK does not offer this service at the moment.
Eligible Short Selling Securities
SBL for the purpose of short selling will be limited to those China Stock Connect Securities that are eligible for both buy orders and sell orders through Shanghai and Shenzhen Connect (i.e., excluding Connect Securities that are only eligible for sell orders).
IBHK does not offer this service at the moment.
Trading Shenzhen ChiNext and Shanghai Star shares
Trading Shenzhen ChiNext and Shanghai Star shares are limited to institutional professional investors.
Holidays
Clients will only be allowed to trade China Connect on days where Hong Kong and Mainland markets are both open for trading and banking services are available in both Hong Kong and Mainland markets on the corresponding settlement days. This arrangement is essential in ensuring that investors and brokers will have the necessary banking support on the relevant settlement days when they will be required to make payments.
The following table illustrates the holiday arrangement of Northbound trading of SSE/SZSE Securities:
|
|
Mainland |
Hong Kong |
Open for Northbound Trading |
|
Day 1 |
Business Day |
Business Day |
Yes |
|
Day 2 |
Business Day |
Business Day |
No, HK market closes on money settlement day |
|
Day 3 |
Business Day |
Public Holiday |
No, HK market closes on trading day |
|
Day 4 |
Public Holiday |
Business Day |
No, Mainland market closes |
Severe Weather Conditions
Information on the trading arrangement available under severe weather conditions can found on the HKEx website.
Where to Learn More?
Please refer to the following exchange website links for additional information regarding Hong Kong China Stock Connect:
If you have any questions regarding Hong Kong-China Stock Connect, please contact IBKR Client Services for further information.