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Financial and Monetary Affairs
International investors can trade in over 570 shares listed on the Shanghai Stock Exchange and over 940 shares listed on the Shenzhen Stock Exchange. Mainland investors are also offered a wide range of choices, with over 440 Hong Kong-listed stocks available through Stock Connect.
In November, the SFC and the China Securities Regulatory Commission (CSRC) announced their agreement to introduce an investor identification regime for northbound trading under both Stock Connects. This regime will entail the real-time transfer of investor information by the SEHK and its subsidiaries to Mainland exchanges and the CSRC. This highlights efforts to bolster Hong Kong-Mainland regulatory cooperation in combating market misconduct through effective monitoring. A similar identification regime for southbound trading is being planned after the start of the regime for northbound trading.
Bond Connect
Northbound trading under Bond Connect has been operating smoothly since its launch in July. The programme marks an important milestone in the development of mutual capital market access between Hong Kong and the Mainland. It enables eligible overseas investors to access, for the first time, the Mainland interbank bond market through financial infrastructural connections established between the Mainland and overseas bond markets. Bond Connect facilitates investors' participation in the bond markets, improves connectivity between market infrastructures and promotes the healthy development of the bond markets, thereby enhancing Hong Kong's status as an international financial centre and the global offshore RMB business hub.
Mainland and Hong Kong Closer Economic Partnership Arrangement
The Closer Economic Partnership Arrangement (CEPA) gives Hong Kong's financial service providers and professionals greater market access and flexibility in their Mainland operations. It also enhances Hong Kong's attractiveness to market users and strengthens the city's competitiveness as an international financial centre and the premier capital formation centre for Mainland enterprises.
The National 13th Five-Year Plan states that the Central People's Government will step up efforts. to further open up its markets to Hong Kong and advocate enhancement of the CEPA. The Mainland and Hong Kong signed the Investment Agreement and Economic and Technical Cooperation Agreement on 28 June to enhance the CEPA in line with a modern and comprehensive free trade agreement, providing for the promotion and protection of increasing investments between the two places as well as fostering economic and technical cooperation and exploring new areas of cooperation. In particular, commitments on financial cooperation cover many financial services sectors, including accounting, insurance, securities and banking.
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