“The necessary trading and clearing rules and other relevant rules, the daily and aggregate quota mechanisms and other regulatory and operational arrangements have now been finalised,” the Securities and Futures Commission and the China Securities Regulatory Commission said in a joint statement.
“We welcome today’s announcement which is the result of close and intensive cooperation between the SFC and the CSRC over the past few months,” said Carlson Tong SFC chairman.
“In particular, the two regulators have established innovative and robust mechanisms in protecting the integrity of both markets when the pilot programme commences.”
The SFC said the two sides set a new benchmark for cross-boundary regulatory operation, “including the timely provision of client and order data to facilitate real time surveillance of market activity”.
Many in the investment community have high expectations for the linkage of the two exchanges, which gives foreign investors access to roughly 550 Shanghai stocks (A-shares) through the Hong Kong Stock Exchange.
Likewise, mainland investors will be able to trade Hong Kong stocks (H-shares).
The stock connect was originally slated to start in October. Although the Hong Kong side had completed all necessary regulatory checks, China delayed the launch for undisclosed reasons.
In September, Schroder Investment Management said it was concerned over several unresolved issues regarding the stock market connect, including how capital tax on China investments will be treated.