Re: Amendment of Rules in Relation to Northbound Trading of Stock Connect

2022-07-20 11:55 GF Securities (Hong Kong) Brokerage Limited

Annex：中華通北向交易的規則修訂通知(繁英).pdf

Date: 19 July 2022
Dear Valued Client, 
Re: Amendment of Rules in Relation to Northbound Trading of Stock Connect
 
Thank you for choosing the services of GF Securities (Hong Kong) Brokerage Limited(“GFSHK”)! 
On 24 June 2022, the Stock Exchange of Hong Kong Limited (“HKEX”) announced the amendment of rules in relation to northbound trading of stock connect by China Securities Regulatory Commission (CSRC), Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE), which the CSRC, SSE and SZSE have announced their rule amendments (in Chinese only) in relation to restricting Mainland investors from Northbound Trading under Stock Connect with effect from 25 July 2022 (the Effective Date).

Background
The CSRC, SSE and SZSE published market consultation (in Chinese only) in relation to restricting Mainland investors from Northbound Trading under Stock Connect on Friday, 17 December 2021. Mainland investors include: (a) individuals that possess Mainland ID documents; (b) holders of a joint account if one of the holders is considered as Mainland investor under (a); and (c) corporate or unincorporated entities which are registered in the Mainland.
The following investors will not be considered as “Mainland investors” and may continue to buy and sell China Connect Securities through Northbound Trading under Stock Connect:

• Any individual who holds a Permit for Proceeding to Hong Kong and Macao, i.e. One-way Permit (前往港澳通行證, i.e. 單程證) or who has obtained an identity document as proof of permanent residence in a country or region outside Mainland China
• Any branch or subsidiary of a corporate or unincorporated entity registered in Mainland China which branch or subsidiary is lawfully registered in Hong Kong or overseas*

Implementation arrangements
According to the CSRC, SSE and SZSE:
o Effective from 22 July 2022, GFSHK shall not register new Broker-to-Client Assigned Number (BCAN) for clients who are Mainland investors, i.e. registration of new BCANs with ‘CHN’ as the country/ region of issuance (CHN BCANs) will be rejected;
o There will be a 1-year transitional period (from 25 July 2022 to 23 July 2023) from the effective Date, during which Mainland investors with registered CHN BCANs could still buy and sell China Connect Securities through Northbound Trading under Stock Connect with the registered CHN BCANs;
o During the transitional period, Mainland investors with registered CHN BCANs who cannot buy or sell China Connect Securities through Northbound Trading due to exceptional circumstances including bankruptcy of their brokers could open Northbound Trading account at GFSHK for new CHN BCANs registration; and
o After the transitional period (from 24 July 2023): (A) GFSHK shall delete all CHN BCANs for their clients who are Mainland investors, (B) Mainland investors shall not proactively buy any China Connect Securities through Northbound Trading under Stock Connect (including subscription for right issues (配股)), but excluding obtaining China Connect Securities passively as a result of corporate actions (such as distribution of stock dividends), and (C) Existing China Connect Securities held by Mainland investors could be sold by tagging the reserved value prescribed by the Exchange, the arrangements of which will be announced in due course.
For more details, please refer to the corresponding circular published by HKEX:https://www.hkex.com.hk/-/media/HKEX-Market/Services/Circulars-and-Notices/Participant-and-Members-Circulars/SEHK/2022/CT08822E.pdf
Please be reminded that you/your company should notify GFSHK promptly to ensure the account information is update and accurate, if there is any change of account information (e.g. identity information, contact details and tax jurisdiction etc.) in relation to you/your company. Should you have any questions, please feel free to contact our customer service hotline at (852) 3719-1288/4008695575.
 
GF Securities (Hong Kong) Brokerage Limited
 
 
 
*For BCAN-CID Mapping Files (CHN BCAN) submission purposes, these entities may use their business registration certificates as identification documents.