In this newsletter, we provide a snapshot of the principal Asian, European, US and selected international governance and securities law developments of interest to Asian corporates and financial institutions.
The previous quarter's Governance & Securities Law Focus newsletter is available here.
Financial regulation developments are available here.
ASIA DEVELOPMENTS
Launch of Shenzhen-Hong Kong Stock Connect
On 5 December 2016, Shenzhen-Hong Kong Stock Connect, the mutual stock market access programme between the Shenzhen Stock Exchange ("SZSE") and The Stock Exchange of Hong Kong Limited ("SEHK"), was officially launched. Under Shenzhen-Hong Kong Stock Connect, Hong Kong and international investors may trade in eligible shares listed on SZSE through SEHK via a Northbound Shenzhen Trading Link. Likewise, eligible Mainland investors may trade in eligible shares listed on SEHK through SZSE via a Southbound Hong Kong Trading Link. Shenzhen-Hong Kong Stock Connect was modelled on Shanghai-Hong Kong Stock Connect launched in November 2014 and is a significant step towards broadening mutual stock market access between Hong Kong and the Mainland. For the key features of Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, you may refer to the January 2015 issue and October 2016 issue of Governance & Securities Law Focus.
Each of Shenzhen-Hong Kong Stock Connect and Shanghai-Hong Kong Stock Connect is subject to a daily quota of RMB 13 billion for its Northbound Trading Link and a daily quota of RMB 10.5 billion for its Southbound Trading Link. Please see below market highlights of 5 December 2016, the first trading day under Shenzhen-Hong Kong Stock Connect:
Stock Connect Highlights – 5 December 2016
Source: HKEX News Release issued on 5 December 2016
To strengthen the enforcement co-operation between the China Securities Regulatory Commission ("CSRC") and the Hong Kong Securities and Futures Commission ("SFC") and signify their joint commitment to take effective action against cross-boundary illegal activities and market misconduct, the CSRC and the SFC have entered into a new memorandum of understanding, which supersedes the "Memorandum of Understanding between the CSRC and the SFC on Strengthening of Regulatory and Enforcement Cooperation under Shanghai-Hong Kong Stock Connect" signed on 17 October 2014. In addition, the CSRC and the SFC have established arrangements and procedures for cross-boundary regulatory co-operation on any contingency or major event that may affect the mutual trading access, and for referring and handling investors' complaints.
The Joint Announcement by the CSRC and the SFC on 25 November 2016 approving the official launch of Shenzhen-Hong Kong Stock Connect is available at:
http://www.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=16PR126
The lists of eligible stocks under Shenzhen-Hong Kong Stock Connect and Shanghai-Hong Kong Stock Connect are available at the Stock Connect section of the HKEX website:
http://www.hkex.com.hk/eng/csm/securities_eligible_stocks.htm
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