Shenzhen-Hong Kong Stock Connect
Shenzhen-Hong Kong Stock Connect will be launched soon. Core Pacific-Yamaichi (“CPY”) would by then provide you with services to trade Shenzhen Stock Exchange Securities through PC download version, mobile app, your designated Account Executive and online trading platform. Please find below a brief summary of details relating to Shenzhen Stock Exchange Securities (namely “Northbound Trading”).
A. Trading Rules for Shenzhen Stock Exchange (SZSE)
Trading Rules
Trading Hours

Opening Call Auction: 09:15–09:25
Continuous Auction: 09:30–11:30 / 13:00–14:57
Closing Auction: 14:57-15:00
Allow order input 5 minutes prior to opening of each trading session

Settlement Cycle

Securities settlement: Trade day
Money settlement: T+1

Trading and Settlement Currency

RMB

Price Limit

± 10% on previous closing price
Any orders with price beyond the price limit will be rejected

Trading

No day trades
No block trades
No manual trade facility
No trading by designated broker
No naked short selling

Orders

Limit orders only
No amendment order
Buy orders at a price lower than the reference price by 3% will be blocked

Fees & Levies

Existing fees and levies applicable to A share market:#
» Handling Fee:0.00487%
» Securities Management Fee:0.002%
» Seller Stamp Duty: 0.1%
» 0.004% of the amount of the consideration for each purchase or sale
Portfolio fee for depository and nominee services for A shares

# Details please refer to our service charges
Charges

B. Points to note to trade Shenzhen Stock Exchange Securities (SZ-HK Connect)

    1. Shenzhen Stock Exchange Securities can be traded through PC download version, mobile app, web online and simply call your account executive.

    2. Only Cash account is allowed to trade A Shares, Margin account is unable to trade A Shares.

    3. The order is only valid within trading hour. Non executed order will be cancelled after market close.

    4. SZ-HK Connect does not accept day trade.

    5. SZ-HK Connect does not accept order amendment. Client can only cancel the original order and then input a new order.

    6. Northbound trading will follow SZSE’s trading hours. However, SEHK will accept Northbound orders from SEHK Participants five minutes before the Mainland market session opens in the morning and in the afternoon. Orders and order cancellations input during 09:10–09:15; 09:25–09:30; 12:55–13:00 can be accepted by SEHK but will not be processed by SZSE until SZSE’s market open. If client need to cancel an order, such cancellation cannot be sent to SZSE until SEHK transmit the order by 13:00. At 09:20 – 09:25 and 14:57-15:00 SZSE will not accept order cancellation. Client is reminded that the cancellation order may not have been canceled due to the order is being completely executed if cancellation order input in mentioned period.

    7. The holiday schedule of Shenzhen A share market and SZ-HK Connect is different and there is the trading quota of SZ-HK Connect. Also, there is the risk when Shenzhen A share market trades normally whereby the daily quota being used up or being suspended for SZ-HK Stock Connect. (Please refer to Holding table and Northbound Quota on the website of HKEx)

    8. Shenzhen Stock Exchange Securities are issued in scripless form. Physical deposits and withdrawals into/from the CCASS Depository of Shenzhen Stock Exchange will not be available.

C. Details of CPY’s RMB Bank Accounts
Bank Core Pacific-Yamaichi International (H.K.) Limited
Bank of China 012-875-9-250310-4
HSBC 808-847784-285
Standard Chartered Bank 447-1776373-3
D. Cross-boundary Investment Quota

Shenzhen-Hong Kong stock trading is subject to quota restrictions. The quota is issued on a "first come, first served" basis. The daily quota is calculated on the basis of "net buying". Investors are free to sell the securities at any time, regardless of the amount of the balance.

The balance of the daily quota will be posted on the Hong Kong Stock Exchange website and at 5-seconds intervals through the dedicated gateway "CC OG" and the OMD index transmission line at 1-minute interval.


Northbound Quota
Aggregate Quota

Not Available

Daily Quota

RMB52 billion

CalculatedReal‐Time during trading hours
Balance:Daily Quota Buy OrdersSell
Trades+ Adjustments (e.g. Buy Order cancelled, Buy Order rejected by SZSE, Buy Order executed at a better price)

If Daily Quota balance equals to 0 or below
» During opening call auction (Pre-opening): Reject new buy orders until quota balance becomes positive (e.g. due to Buy Order cancellation)
» During continuous auction (continuous trading):Suspend buy order for the remaining of the day
» Buy orders already input before suspension will not be affected

E. Comparison of Shenzhen Stock Exchange Securities (related to SZ-HK connect) and HK stock trading
Comparison of Shenzhen Stock Exchange Securities (related to SZ-HK connect) and HK stock trading
  Shenzhen Stock Exchange Securities HK stock
Trading hours

9:15am-9:25am (Opening Call Auction)
9:30am-11:30am (Continuous Auction - Morning)
1:00pm-2:57pm (Continuous Auction - afternoon)
2:57pm-3:00pm (Closing Call Auction)

9:30am-12:00am
1:00pm-4:00pm

Board lot size

100 shares per lot

Subject to the specific stock

Upper limit for Order size

1,000,000 shares

3,000 lots

Price Limit

± 10% base on previous closing price;
±5% for stock under special treatment (ST) and *ST stock under risk alert;
Any orders with price beyond the price limit will be rejected

No limit

Tick size

RMB 0.01

Subject to the stock price

Day Trade

Not allowed
(stocks purchased on T day can only be sold on or after T+1 day)

Allowed

Odd lot trade

For sell order only

For both buy and sell order
(the price of odd lot trade may be lower)

Settlement cycle

Securities settlement: Trade day
Money settlement: T+1 day

Securities settlement: T+2 day
Money settlement: T+2 day

Fee

Handling Fee, Securities Management Fee, Stamp Duty, Transfer Fee and Portfolio fee

Transaction Levy ,Trading Fee ,Stamp Duty, CCASS Stock Settlement Fees Trading Tariff

Language of Corporation action notice

Simplified Chinese only
(Shenzhen Stock Exchange Website and 4 officially designated newspapers)

English and traditional Chinese
(HKEx's website)

Physical deposits and withdrawals

Not allowed
(in scripless form)

Allowed
(for most of the stocks)

Stock Code

6 digits

5 digits

F. Shareholding limits on foreign investors

Clients must comply with the 10% individual shareholding limit applicable to foreign investors (including Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors approved under the applicable laws of Mainland China, and other investors using the China Connect Service) as stipulated in applicable laws of Mainland China including the CSRC regulations concerning Shenzhen-Hong Kong Stock Connect.

Clients shall note and understand the 30% aggregate shareholding limit in relation to A shares and the related forced-sale requirements applicable to foreign investors who invest in China Connect Securities as stipulated in applicable laws of Mainland China including the CSRC regulations concerning Shenzhen-Hong Kong Stock Connect.

G. Shareholding Monitoring Procedures

Where foreign investors (including investors holding China Connect Securities through CCASS) hold 28% or more of the issued shares of a relevant issuer in aggregate, SZSE will notify the SEHK Subsidiary, and the Hong Kong Exchange and SEHK Subsidiary will as soon as practicable thereafter suspend accepting China Connect buy orders in respect of the relevant China Connect Securities until the aggregate shareholding of foreign investors is reduced to below 26%, as advised by SZSE.

Forced-sale Procedures

    Notwithstanding Rule 14B08(4), where the aggregate shareholding of foreign investors (including investors holding through CCASS) in respect of a relevant issuer exceeds 30% of the issued shares of the issuer on an SZSE trading day, SZSE may, pursuant to the SZSE Rules, issue a forced-sale notice to the SEHK Subsidiary on the following trading day, requiring it to arrange for a sell down of the portion of the China Connect Securities that exceeds 30% within 5 SZSE trading days on a “last-in, first-out” basis (as determined in accordance with Rule 14B08(11)).

    Upon receipt of a forced-sale notice under Rule 14B08(5), the SEHK Subsidiary will notify the relevant China Connect Exchange Participant(s) through the Hong Kong Exchange, requiring or directing them to, or arrange for their clients to, sell and liquidate the specified number of China Connect Securities within a period specified by the Hong Kong Exchange.

    Upon receipt of the notice under Rule 14B08(6), the China Connect Exchange Participant shall comply with the notice, and where applicable, it shall issue a corresponding notice to the relevant client(s) or their custodian(s) requesting for the sale and liquidation of the number of China Connect Securities specified by the China Connect Exchange Participant within the period specified by the Hong Kong Exchange. If a client fails to comply with the China Connect Exchange Participant’s notice, the China Connect Exchange Participant shall, if necessary, exercise its power to sell the specified number of China Connect Securities through the use of the China Connect Service on the client’s behalf before expiry of the period specified by the Hong Kong Exchange.

    China Connect Exchange Participants shall implement appropriate measures to enable them to comply with Rule 14B08(7) on a timely basis including entering into legally enforceable client agreements to facilitate compliance with the forced-sale arrangements referred to in that Rule.

    Where a forced-sale notice is issued by SZSE under Rule 14B08(5), no China Connect buy orders for the relevant China Connect Securities will be accepted by the CSC until SZSE informs the SEHK Subsidiary or the Hong Kong Exchange that the aggregate foreign shareholding falls below 30%. China Connect sell orders for the relevant China Connect Securities will not be affected by a forced-sale notice.

    If, within the 5-day period mentioned in Rule 14B08(5), the aggregate foreign shareholding is reduced to below 30% due to other foreign investors selling down the relevant shares, the SEHK Subsidiary may, on its own or upon request from a China Connect Exchange Participant referred to in Rules 14B08(6) and (7) apply for permission to hold the relevant shares without a sell down at such time and in such manner as the Hong Kong Exchange may prescribe from time to time.

    The relevant China Connect Exchange Participants referred to in Rule 14B08(6) will be identified by the Hong Kong Exchange based on its or the SEHK Subsidiary’s own records (which shall be final and conclusive) generally by reference to the time of purchase of the relevant China Connect Securities, on a “last in, first out” basis. Notwithstanding the foregoing, the Hong Kong Exchange has absolute discretion to determine which China Connect Exchange Participants and what quantity of China Connect Securities should be subject to a forced sale notice.

    Where the 30% aggregate foreign shareholding limit is exceeded due to a share repurchase conducted by the relevant issuer, investors and China Connect Exchange Participants holding China Connect Securities through CCASS may continue to hold the relevant shares without being subject to a forced-sale. However, the SEHK Subsidiary and the Hong Kong Exchange will suspend acceptance of China Connect buy orders for those China Connect Securities until the aggregate foreign shareholding limit is reduced to below 26%.

H. Disclosure Obligations regarding China Connect Securities

14B09. Clients must comply, with the 5% shareholding disclosure requirement applicable to persons who invest in A shares under applicable laws of Mainland China. China Connect Exchange Participants shall put appropriate monitoring arrangements in place to comply with this Rule and to alert their clients to comply with the relevant disclosure requirements.

I. Compliance with applicable laws in Mainland China

    14B10. As required by SZSE, Clients must comply, with SZSE Rules (to the extent applicable to the trading of China Connect Securities in the SZSE Market, and not inconsistent with these Rules and any regulations, requirements or conditions prescribed or published pursuant to these Rules) and laws and regulations of Mainland China relating to the use of the China Connect Service and the trading of China Connect Securities;

    Clients must acknowledge and understand the risks associated with investing in China Connect Securities through appropriate arrangements including, without limitation, the risk that their instructions to trade in China Connect Securities may not be accepted and that they may be liable to regulatory investigations and the relevant legal consequences if they are in breach of or fail to comply with the SZSE Rules and the laws and regulations referred to in this Rule 14B10;

    Clients must acknowledge that the Hong Kong Exchange has the power not to extend the China Connect Service to them and the power to require China Connect Exchange Participants not to accept instructions from them, if it is found that the China Connect Exchange Participant or any of its clients (as the case may be) has or may have committed any abnormal trading conduct set out in or fail to comply with the SZSE Rules and the laws and regulations referred to in Rule 14B10(1);

    Clients must acknowledge that if the SZSE Rules are breached, or if the disclosure and other obligations referred to in the listing rules of the SZSE (including the rules of the SZSE for stock listing on ChiNext) or the SZSE Rules are breached, SZSE has the power to carry out investigations, and may, through the Hong Kong Exchange or the SEHK Subsidiary, require China Connect Exchange Participants to provide relevant information and materials (including the information and personal data of their clients and other persons referred to in Rule 537) to assist in its investigation;

    Clients must acknowledge that where there is a serious breach of the SZSE Rules, SZSE may request the Hong Kong Exchange to take appropriate regulatory actions or commence disciplinary proceedings against China Connect Exchange Participants, or request the Hong Kong Exchange to require China Connect Exchange Participants to issue warning statements (verbally or in writing) to their clients, and not to extend the China Connect Service to them or to their clients;

    Clients must acknowledge that the Hong Kong Exchange may (for the purpose of assisting SZSE in its regulatory surveillance of the SZSE Market and enforcement of the SZSE Rules and as part of the regulatory cooperation arrangement between the Hong Kong Exchange, the SEHK Subsidiary and SZSE), at the request of SZSE, require China Connect Exchange Participants to provide information concerning their clients and other persons referred to in Rule 537 with respect to any China Connect orders input or China Connect Securities Trades made or entered into by China Connect Exchange Participants on their behalf; and

      Clients must understand that, for the purposes referred to in paragraphs (4) to (6), China Connect Exchange Participants shall authorize the Exchange (whether directly or through the SEHK Subsidiary) to disclose, transfer and provide information and personal data concerning their clients and other persons referred to in Rule 537 to SZSE upon request and shall make appropriate arrangements (including obtaining the relevant consents) to ensure that the relevant information and personal data may be disclosed, transferred and provided in compliance with applicable laws including the Personal Data (Privacy) Ordinance.


    Our Company does not represent that the above related information provided is up-to-date or complete, nor does our Company undertakes to update it from time to time. For further information, please refer to the materials published on the HKEx website, the SFC website and/or the SZSE website applicable to Stock Connect from time to time and other relevant sources. If in doubt, the Client should seek professional advice.

J. Q & A session

1. What is Shenzhen-Hong Kong Stock Connect trading ?

    Shenzhen-Hong Kong Stock Connect, which will provide mutual stock market access between Hong Kong and Shenzhen via a northbound trading link and a southbound trading link.

2. How to trade Shenzhen Stock Exchange Securities though CPY Online trading platform ?

    Client can trade Shenzhen Stock Exchange Securities though PC download version, mobile app, web online and simply call your account executive.
    Client who opened a valid securities account can trade Shenzhen Stock Exchange Securities.

    CPY Online Trading platform:

    a. Login your securities account at www.cpetrade.com

    b. Choose A share at the section of securities trading

    c. Input the order information and click the “stock search” to find the stock name for the order

    d. Click the icon “Submit” to send the order to market

3. What should I pay attention for trading at Shenzhen-Hong Kong Connect ?

    Only Limit orders are accepted.

    Order is only valid at same day. All non-executed order will be cancelled after market close.

    There is no day trade for A share market.

    Change order is not accepted for Shenzhen Stock Exchange Securities. You have to cancel it and replace a new order.

4. Is there any regulation for cancellation of order ?

    HKEx will open the function for order entry at Shenzhen Stock Exchange before 5 minutes of the morning and afternoon session but the order will be sent to market at market open (9:15am, 9:30am and 1pm).

    Therefore, new order or cancel order will be in queued and pending at the system.

    For example, client want to cancel the order at 12:55 to 13:00, the cancel order will not be sent to market until market open as the regulation of Shenzhen Stock Exchange.

    Client need to pay attention that the order may not be cancelled when the order might have already executed when market open.

5. What is the settlement cycle of trading Shenzhen –Hong Kong Connect ?

    The settlement cycle follows the regulation of Shenzhen Stock Exchange Securities market.

    Securities settlement: T

    Money settlement: T+1

6. Are we protected by the Investor Compensation Fund ?

    Investor should be reminded that the current Investor Compensation Fund will not cover any Northbound and Southbound trading activities.

7. Any Disclosure obligation for trading at Shenzhen Stock Exchange Securities market ?

    Clients must comply, with the 5% shareholding disclosure requirement applicable to persons who invest in A shares under applicable laws of Mainland China. China Connect Exchange Participants shall put appropriate monitoring arrangements in place to comply with this Rule and to alert their clients to comply with the relevant disclosure requirements.

8. Any Market risk for trading at Shenzhen Stock Exchange Securities market ?

    Shenzhen-Hong Kong Stock Connect will only operate on days when both markets are open for trading and banking services are available in both markets on the corresponding settlement days. So it is possible that there are occasions when it is a normal trading day for the Mainland market but Hong Kong investors cannot carry out any Shenzhen Stock Exchange Securities trading. Investors should take note of the days Shenzhen-Hong Kong Stock Connect is open for business and decide according to their own risk tolerance capability whether or not to take on the risk of price fluctuations in A-shares during the time when Shenzhen-Hong Kong Stock Connect is not trading.

9. How would Shenzhen Stock Exchange Securities under Shenzhen-Hong Kong Stock Connect be customized for Hong Kong and overseas investors ?
Can investors hold Shenzhen Stock Exchange Securities acquired through Shenzhen-Hong Kong Stock Connection physical form ?

    Since Shenzhen Stock Exchange Securities are issued in scripless form, physical deposits and withdrawals into/from the CCASS Depository of SZSE will not be available.

    As explained above, Hong Kong and overseas investors can only hold Shenzhen Stock Exchange Securities through their brokers/custodians. Their ownership of such is reflected in their brokers/custodians' own records such as client statements.

10. Any limitation for Odd Lots trading of Shenzhen Stock Exchange Securities ?

    All Shenzhen Stock Exchange Securities are subject to the same trading board lot size, which is 100 shares (buy orders must be in board lot). Odd lot trading is only available for sell orders and all odd lots should be sold in one single order. It is common that a board lot buy order may be matched with different odd lot sell orders, resulting in odd lot trades. It should be noted that unlike Hong Kong, board lot and odd lot orders are both matched on the same platform on Shenzhen Stock Exchange, and subject to the same share price. The maximum order size is 1 million shares and the tick size is uniformly set at RMB 0.01.

11. Can I engage in short selling of A shares though Core Pacific Yamaichi ?

    No. Short selling service of A shares is not currently provided. Clients should confirm that sell orders placed are long sales and not short sales. Clients also need to ensure the sufficiency of shares before placing sell orders.

12. If my SZSE shares has entered into a “Delisting Preparatory Period”, what will be the risk ?

    The “Delisting Preparatory Period” will usually has 30 trading days. During that period, investor who wishes to sell the shares through stock connect, it may only be able to do so on or before the end of the “Delisting Preparatory Period”. The shares are eligible for sell only during the period. Upon completion of “Delisting Preparatory Period”, HKSCC may cease to provide any services related to the shares, transfer and physical withdrawal of the shares will not be available. Investor should be aware of the risk related and other limitations. For details, please kindly contact HKSCC for enquiry.

13. Where can I obtain more information about Shenzhen-Hong Kong Stock connect ?

    You can refer to HKEx website:

    http://www.hkex.com.hk/Mutual-Market/Stock-Connect?sc_lang=en

    Information Book for Investors:

    https://www.hkex.com.hk/-/media/HKEX-Market/Mutual-Market/Stock-Connect/Getting-Started/Information-Booklet-and-FAQ/Information-Book-for-Investors/Investor_Book_En.pdf

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