Hong Kong Stock Regulator Completes Work for Bourse Link

By Bloomberg News

Photographer: Lam Yik Fei/Bloomberg

Hong Kong & Exchanges Clearing Ltd. Chief Executive Officer Charles Li said Oct. 27... Read More

Hong Kong’s securities regulator has completed preparatory work for a planned trading link with Shanghai’s stock exchange.
The SFC “has finalized all the regulatory arrangements required for the launch of Stock Connect and we hope it will be launched sooner rather than later,” Jonathan Li, a Hong Kong-based spokesman at the Securities and Futures Commission, said by phone. The China Securities Regulatory Commission, which has yet to indicate whether it’s ready for the link, didn’t reply to two calls and an e-mail seeking comment.
Regulators’ silence over when the program will start has
sown confusion among investors and brokerages, who had anticipated making their first cross-border trades by now. Hong Kong & Exchanges Clearing Ltd. Chief Executive Officer Charles Li said on Oct. 27 that authorities hadn’t signed off on the link and he had no idea when it will begin.
“It would seem that everything is ready to go,” said Gerry Alfonso, a trader at Shenyin & Wanguo Securities Co. in Shanghai. “Expectations seem very high for this program, which will represent one of the biggest steps in the process of opening the mainland China stock market to foreign investors.”

Stocks Climb

China is counting on the success of bourse link, which allows a net 23.5 billion yuan ($3.8 billion) in daily cross-border purchases, to help liberalize its financial system and increase use of the yuan. While authorities said in April they may make further announcements on timing, they haven’t given any more details beyond their original statement that the link would start in about six months.
The Hang Seng China Enterprises Index (HSCEI) and the Shanghai Composite Index climbed at least 1.5 percent today. The SFC’s comments helped fuel the advance, said David Welch, the Hong Kong-based head of equity sales trading at Reorient Group Ltd. Optimism that China’s central bank will ease policies is also boosting shares, he said.
Reuters earlier reported comments by Ashley Alder, the chief executive officer at the SFC, that his agency has completed all regulatory steps needed for the start of the link.