HKEX Announces Stock Connect Expansion Arrangements

Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today (Friday) that its wholly-owned subsidiary, The Stock Exchange of Hong Kong Limited (SEHK), has reached an agreement with Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE) on the Stock Connect inclusion arrangements for eligible pre-revenue biotech companies listed in Hong Kong, as well as for eligible A-shares listed on the SSE’s Sci-Tech Innovation Board (STAR Market).

The announcement reflects the ongoing commitment by the three exchanges to continue enhancing the mutual market access programme between the capital markets of Mainland China and Hong Kong, to help ensure their continued healthy development.

Inclusion Arrangements for Companies Listed on STAR Market

SEHK, SSE and SZSE have previously reached consensus on the Stock Connect inclusion arrangements for A+H companies listed on the STAR Market. Upon further discussions, the three exchanges have agreed that STAR Market-listed shares that are constituent stocks of the SSE 180 Index and SSE 380 Index, or have H-share counterparts listed in Hong Kong, will be eligible for Northbound trading under the existing Shanghai-Hong Kong Stock Connect arrangements.

Accordingly, their corresponding H-shares will be included in Southbound trading of Stock Connect pursuant to the existing Stock Connect arrangements.

Given the special investor eligibility requirements of the STAR Market, STAR Market-listed shares will only be accessible via Northbound trading of Stock Connect by institutional professional investors as defined under relevant Hong Kong rules. The relevant rules for the arrangement are subject to regulatory approval in Hong Kong and Mainland China.

The three exchanges will actively engage in business and technical preparations and expect inclusion to take place in early 2021 after market preparations are complete.

Inclusion Arrangements for Biotech Companies Listed in Hong Kong

The three exchanges have also agreed that shares of pre-revenue biotech companies listed under Chapter 18A of Hong Kong’s Main Board Listing Rules that are eligible constituent stocks of the Hang Seng Composite Index, or have corresponding A-shares listed on SSE or SZSE, will be included in Southbound trading of Stock Connect under the existing Stock Connect arrangements.

Shares of biotech companies that are H-shares in STAR Market-listed A+H companies will be included in Southbound trading of Stock Connect pursuant to the inclusion arrangements for STAR Market-listed shares mentioned above.

The exchanges expect the inclusion of pre-revenue biotech stocks to take place one month from the date of this announcement. For the avoidance of doubt, the inclusion of biotech shares in Hong Kong whose stock names do not end with the marker “B”, or those that are already eligible for Southbound trading at the time of this announcement, will not be affected by this arrangement.


About HKEX

Hong Kong Exchanges and Clearing Limited (HKEX) is one of the world’s major exchange groups, and operates a range of equity, commodity, fixed income and currency markets.  HKEX is the world’s leading IPO market and as Hong Kong’s only securities and derivatives exchange and sole operator of its clearing houses, it is uniquely placed to offer regional and international investors access to Asia’s most vibrant markets.

HKEX is also the global leader in metals trading, through its wholly owned subsidiaries, The London Metal Exchange (LME) and LME Clear Limited.  This commodity franchise was further enhanced with the launch of Qianhai Mercantile Exchange (QME), in China, in 2018.

HKEX launched the pioneering Shanghai-Hong Kong Stock Connect programme in 2014, further expanded with the launch of Shenzhen Connect in 2016, and the launch of Bond Connect in 2017.