Frequently asked questions

I. Related to Northbound Trades Quota

SEHK monitors the usage of the Northbound Daily Quota on a real time basis. The calculation is as follow:

Daily Quota Balance = Daily Quota – Buy Orders + Sell Trades + Adjustments^

The Daily Quota will be reset every day. Unused Daily Quota will NOT be carried over to the following day’s Daily Quota.

When the Northbound Daily Quota Balance drops to zero or is exceeded during a continuous auction session (or closing call session for SZSE), no further buy orders will be accepted for the remainder of the day. SEHK will resume the Northbound buying service on the following trading day.

When the Northbound Daily Quota Balance drops to zero or the Daily Quota is exceeded during the opening call auction session, new buy orders will be rejected. However, SEHK will again accept Northbound buy orders once the Northbound Daily Quota Balance resumes to a positive level before the end of the session.

It should be noted that buy orders already accepted will not be affected by the Daily Quota being used up and will remain on the order book of SSE/SZSE unless otherwise cancelled by the relevant brokers.

^Daily Quota Balance will be increased when a) a buy order is cancelled; b) a buy order is rejected by the other exchange; or c) a buy order is executed at a better price.

II. Related to Northbound Trading Link Arrangement

Day trading is not allowed for Mainland market. Therefore, Hong Kong and overseas investors buying eligible SSE/SZSE securities on Trade Day can only sell the shares on or after Trade Day + 1 Day.

Investors must ensure they have sufficient shares in their accounts opened with the selling broker when placing sell orders. If the shares are kept in an account opened with another SEHK Exchange Participants or a custodian, investors must first transfer the shares to the selling broker before the market opens on the day of selling (Trade Day) in order to sell their shares on Trade Day.

In such a case, investors are only allowed to place sell order for the delisted SSE/SZSE securities, and are prohibited from further buying such SSE/SZSE securities. Unless such A Share is subsequently removed from the “risk alert board”, and it is accepted as an SSE/SZSE security if it remains as a constituent stock of the relevant indices or if its corresponding H share continues to be listed and traded on the SEHK (as appropriate).

Under the following cases, investors will only be allowed to sell A Share but restricted from further buying if:

  1. the A Share subsequently ceases to be a constituent stock of the relevant indices; and/or
  2. the A Share is subsequently under "risk alert"; and/or
  3. the corresponding H share of the SSE/SZSE security subsequently ceases to be traded on SEHK; and/or
  4. the SZSE A Shares, based on any subsequent periodic review, have a market capitalisation of less than RMB6 billion.

Currently, odd lot trading is only available for sell orders under Northbound Trading Link. Investor should note that all board lot and odd lot orders are both matched on the same platform on SSE/SZSE , and subject to the same share price. Hence, any Northbound buy trade executed may be matched with odd lot sell orders, resulting in odd lot trades.

Under Northbound Trading Link, investors are only allowed to trade on days where both markets are open for trading, and banking services are available in both markets on the corresponding settlement days. Examples:

Mainland Hong Kong Northbound trading opens or not?
Day-1 Business Day Business Day Yes
Day-2 Business Day Business Day No – HK market closes on money settlement day (Day-3)
Day-3 Business Day Public Holiday No – HK market closes on trading day
Day-4 Public Holiday Business Day No – Mainland market closes

A shares traded on the SSE/SZSE are subject to a price limit based on their previous closing price, including a ±10% price limit for stocks under normal circumstances and a ±5% price limit for stocks that are under special treatment (i.e. ST and *ST stocks) under risk alert. Northbound trading follows the same rule.

In addition, SEHK sets a lower price limit of 3% on buy orders of all Northbound Trades. Buy order for a Northbound Trades at a price below its current best bid price (and if no current best bid price is available, the latest trade price, and if that is not available, the previous closing price) by a certain percentage will be rejected by the China Stock Connect system. Such price limit does not apply during the Opening Call Auction session of SSE/SZSE.

  1. Trading arrangement under severe weather conditions on the Mainland
    • If SSE/SZSE is suspended due to bad weather, there will be no trading on the Northbound and Hong Kong investors and Securities Brokers will be informed by SEHK.
  2. Trading arrangement under severe weather conditions in Hong Kong
  3. Scenarios Northbound Trading Link Arrangement SEHK Arrangement
    T8/Black rainstorm issued before HK market opens
    (i.e. before 9:00 a.m.) and discontinued after 12:00 noon
    Not open Not open
    T8 issued between 9:00 a.m. and 9:15 a.m. Not open Trading terminates after Pre-opening Session
    T8 issued after SSE/SZSE market opens
    (i.e. 9:15 a.m.)
    Arrangement to be announced in due course Trading terminates in 15 minutes
    Black rainstorm issued after HK market opens
    (i.e. 9:00 a.m.)
    Trading continues as normal Trading continues as normal
    T8/Black rainstorm discontinued at or before 12:00 noon Trading resumes after 2 hours Trading resumes after 2 hours
    T8/Black rainstorm discontinued after 12:00 noon Not open Not open

At the initial stage of Shenzhen Connect, investors eligible to trade shares that are listed on the ChiNext Board of SZSE under Northbound trading will be limited to institutional professional investors. Institutional Professional Investor, as defined under paragraph 15.2 of the Code of Conduct for Persons Licensed by or registered with the SFC, means a person falling under paragraphs (a) to (i) of the definition of “professional investors” in section 1 of Part 1 of Schedule 1 to the Securities and Futures Ordinance.

III. Related to Clearing and Settlement Arrangement

All customers’ holdings of A Shares purchased via Northbound Trading Link will be kept at the Central Clearing and Settlement System (“CCASS”). Since SSE/SZSE securities are issued in scripless form, therefore, physical deposits and withdrawals of such securities through Standard Chartered Bank into/from the CCASS Depository will not be available. Investors can only hold eligible SSE/SZSE securities through their brokers/custodians. Their ownership of such is reflected in their brokers/custodians’ own records such as client statements.

Please also be noted that Standard Chartered Bank will not provide custodial service for eligible SSE/SZSE securities which are transferred-in from securities brokerage firms in Mainland China.

IV. Related to Investors’ Protection and Disclosure Obligations

Investors should note that the current Investor Compensation Fund will not cover any Northbound and Southbound Trading activities under Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect (“ China Connect”).

Under the current PRC rules, when an investor holds or controls up to 5% of the issued shares of an SSE/ SZSE -listed issuer, the investor is required to disclose his/her interest within three working days. Such an investor may not buy or sell the shares in the listed issuer within the three-day period.

Besides, for such an investor, every time when there is an increase or decrease in his/her shareholding by 5%, he/she is required to make a disclosure within three working days.

Note: The 5% change means the actual magnitude of the net change of its shareholding as a percentage of the total issued share capital of the company (e.g. an increase from 10% to 15% or decrease from 10% to 5%).


Risk Disclosure Statement:

  • Investment involves risks. The prices of securities fluctuate, sometimes dramatically and may become valueless. Past performance of any securities is no guide to its future performance. Investors should consider their own investment objectives and risk tolerance level, and read the Terms and Conditions of relevant Securities Services before making any investment decision.
  • Renminbi ("RMB") exchange rate, like any other currency, is affected by a wide range of factors and is subject to fluctuations. Such fluctuations may result in gains and losses in the event that the client subsequently converts RMB to another currency (including Hong Kong dollars); and
  • RMB is currently not freely convertible and conversion of RMB through banks in Hong Kong is subject to restrictions specified by the Bank and regulatory requirements applicable from time to time. The actual conversion arrangement will depend on the restrictions prevailing at the relevant time.

This webpage does not constitute any offer, invitation or recommendation to any person to enter into any transaction described therein or any similar transaction, nor does it constitute any prediction of likely future price movements. Investor(s) should not make investment decisions based on this webpage alone. This webpage has not been reviewed by the Securities and Futures Commission or any regulatory authority in Hong Kong.

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