Shanghai London Stock Connect
Shanghai-London Stock Connect brings together one of the world’s largest domestic capital markets with the leading international market. It will allow global investors to benefit from China‘s growth through London, while London Stock Exchange listed companies will be able to access Chinese investors directly.
The project represents a number of firsts:
- The first time foreign companies will be able to list in mainland China and the first time Shanghai Stock Exchange (SSE) listed companies will be able to raise capital abroad through instruments fungible with their domestic shares.
- The first time Chinese investors will be able to access international stocks from within China without being subject to domestic capital controls.
- The first time international investors can access China A-shares from outside Greater China and through international trading and settlement practices.
Shanghai-London Stock Connect has been developed jointly by SSE and LSEG, with the support of both the UK and Chinese governments and in collaboration with regulatory authorities.
By adopting new regulations and leveraging existing infrastructure we have built a programme that will support the development of a vibrant financial ecosystem connecting China, the UK and the wider global economy. We invite issuers, banks, brokers, asset managers, asset owners and professional services firms from both countries to learn more and participate in Stock Connect.
Investing through Shanghai-London Stock Connect
Investing in GDRs
A New Route to China: Investing in Stock Connect Global Depositary Receipts
Shanghai-London Stock Connect offers international investors the opportunity to invest in high quality blue chip Chinese issuers through an instrument fungible with a company’s Chinese A Share listing. This enables global investors to embed Chinese equities in their standard portfolio management practices, free from quota controls.
Key features of Connect GDRs include:
- Connect is an issuer led programme, with only high-quality companies with a market capitalisation of over 20 billion RMB, already listed in Shanghai able to take part.
- Companies will be further approved by CSRC to issue a GDR as well as produce a full English language UKLA approved prospectus.
- All trading in London will follow local rules and trading and settlement practices.
- Stock Connect GDRs will be traded on the Shanghai Segment within the International Order Book (IOB). The Shanghai Segment will be open between 09.00-16.30 (GMT/BST).
- Stock Connect GDRs can be listed in USD and other currencies.
- A network of designated brokers, able to act in both Shanghai and London, will ensure the fungibility between the GDRs and the underlying A Shares
- Cross border transaction settlement cycle as follows: GDR creation settles on T+2, while redemption is on T+3 (this can be shortened to T+1 and T+2 respectively through the use of inventory).
- Investors can instruct their brokers or directly engage with designated brokers in order to redeem or cancel GDRs.
Investing in CDRs
The First International Listings in Shanghai: Investing in Stock Connect Chinese Depositary Receipts
Shanghai-London Stock Connect is the first-time Chinese investors are able to invest directly in high quality international London-listed companies. Institutional and suitable individual investors will be able to integrate these securities into their standard portfolio management practices, free from quota controls.
Key Features of Connect CDRs include:
- Connect is an issuer led programme, with only high-quality companies with a market capitalisation of over 20 billion RMB, already listed in London for at least 3 years (1 year premium listed) able to take part.
- CDR issuers will establish a securities affairs office in mainland China to manage information disclosure and ensure efficient communication with investors.
- Companies will also be approved by CSRC and SSE to take part in Connect.
- All trading in Shanghai will follow local rules and trading and settlement practices.
- Stock Connect CDRs will be traded on the Main Board of the Shanghai Stock Exchange.
- Stock Connect CDRs can be listed in RMB
- A network of designated brokers, able to act in both Shanghai and London, will ensure the fungibility between the CDRs and the underlying securities
- On a normal settlement cycle CDR creation settles on T+3 (this can be streamlined to T+1 using OTC or SBL), while redemption is on T+2.
- Investors can instruct their brokers or directly engage with designated brokers in order to redeem or cancel CDRs.
- Individual investors wishing to trade CDRs will have to meet a number of requirements including having no less than RMB 3 million in cash and securities in their accounts.
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Meet the team
Head of Asia Pacific Primary Markets, London Stock Exchange plc
Head of China, International Markets
Head of APAC Business Development, Cash Secondary Markets & UK Account Coverage