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.
GDRs in London
GDRs on London Stock Exchange
Listing Global Depositary Receipts (GDRs) on London Stock Exchange offers a unique opportunity for Shanghai Stock Exchange A-Share issuers to access global investors and benefit from London’s high quality institutional investors, advisory community and sell-side research coverage.
A GDR listing under Stock Connect allows Chinese companies to raise foreign capital to fund their development globally. In fact, London-listed shares are accepted as an acquisition currency in more jurisdictions than any other exchange.
GDR issuers also gain access to London Stock Exchange’s comprehensive Issuer Services platform and can shape new relationships with some of the world’s leading institutional investors.
Listing Process
Stock Connect gives Shanghai Stock Exchange-listed issuers the opportunity to admit securities (GDRs) onto London Stock Exchange which are fungible with their underlying A Share listing.
Stock Connect GDRs will be admitted to trading on the Shanghai Segment, a special segment within the International Order Book (IOB) and open for trading from 09:00 to 16:30 (GMT/BST).
The GDRs are traded during London trading hours under London trading rules. Clearing will take place at LCH and settlement in Euroclear Bank.
Eligibility criteria
GDR Issuers under Connect must meet certain eligibility criteria. Issuers must:
- Have a minimum market capitalisation of RMB 20bn (approx. USD $2.9bn)
- Be listed on Shanghai Stock Exchange
- Have obtained CSRC approval
- Have any new shares raised admitted to listing on Shanghai Stock Exchange
- Meet UKLA Listing Rules and London Stock Exchange Admission and Disclosure Standards
- Comply with 25% free float requirement for their GDR listing
For a full list of the relevant rules and regulations please view Useful Asset section.
CDRs in London
Why list CDRs on Shanghai Stock Exchange?
Shanghai-London Stock Connect (“Stock Connect”) offers London Stock Exchange listed companies their first ever opportunity to be listed in mainland China. They will be the first foreign companies to directly access the domestic Chinese equity investor pool, the second largest in the world.
A CDR listing presents an opportunity to gain presence in two distinct capital markets with a fungible instrument allowing prices to be aligned in both markets.
Listing Process
Stock Connect CDRs will be listed on the Shanghai Stock Exchange Main Board. They will be treated like domestic Chinese ‘A Shares’ and fungible with the underlying share in London. They will be traded during Chinese trading hours by Chinese investors with clearing and settlement taking place in China Clear.
Initially, Connect CDRs will not be used to raise additional capital and will be available to investors with more than 3 million RMB in financial assets.
Eligibility criteria
In order to list CDRs in Shanghai, issuers must
- have a minimum market capitalisation of RMB 20bn (approx. USD $2.9bn)
- be listed on London Stock Exchange for at least 3 years with a minimum of 1 year on the Premium Segment of the Main Market.
- issue a minimum of 50 million units of CDRs representing RMB 500 million worth of underlying shares
- hold or acquire sufficient underlying shares (new capital raising is not permitted for CDRs)
- obtain permission from CSRC and comply with Shanghai Stock Exchange requirements
For a full list of the relevant rules and regulations please view the Useful Assets section.
Explore more
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