Regulators to include constituent components of the Shanghai, Shenzen, and Hang Seng indexes.
The Securities and Futures Commission (SFC) and the China Securities Regulatory Commission (CSRC) have decided to expand the scope of shares eligible for trading under the China-Hong Kong Stock Connect scheme, according to an announcement issued on Monday.
As part of the plan, which has been approved in principle by both regulators, northbound names will include the constituent A share components of the Shanghai Stock Exchange, and Shenzhen Composite index ones that meet the required market capitalization and liquidity criteria.
It will also allow equity trading in companies that have concurrently issued A and H shares on both exchanges.
Foreign Companies Included
On the southbound side, investors will be able to trade foreign companies that have primary listings in Hong Kong that are constituents of the Hang Seng Composite Large Cap and MidCap indexes. Companies on the SmallCap index will be able to be traded if they meet the required market cap criteria.
According to the regulators, after the selection is successfully widened, tradable shares on the connect scheme will account for more than 80 percent of all trading in each market.
The implementation of the changes is expected to take about three months and remains subject to market preparedness and completion of operational arrangements.
