Shanghai-London Stock Connect Is Set to Go Live This Year

Xu Wei

(Yicai Global) May 4 — Financial departments in China’s largest city are pushing ahead to roll out the Shanghai-London Stock Connect program this year as the nation looks to continue opening up its capital markets to the rest of the world.

The Shanghai Municipal Finance Bureau has already received applications from European and Asian institutions looking to trial the scheme, Li Jun, deputy director, said at a press briefing yesterday. The bureau has also made recommendations to state financial regulators, which have been met with positive responses, he added.

China has been vying to open up its mainland exchanges to overseas investors, and set up links between its Shanghai and Shenzhen bourses with Hong Kong in 2014 and 2016. It unveiled plans for a feasibility study into a Shanghai-London tie-up in 2015, when then Chancellor of the Exchequer George Osborne was visiting the eastern city.

It is also looking to entice Chinese companies listed overseas back to their home market through the China Depositary Receipt scheme. It revealed the program on March 30 as it looks to attract the likes of Alibaba Group Holding Ltd. and JD.Com Inc., the country’s two biggest e-commerce firms, by allowing them to issue shares on the mainland without sacrificing the power held by their lead executives, Jack Ma (Alibaba) and Richard Liu (JD.Com).

The SMFB will also give full play to the institutional advantages of the Shanghai Free Trade Zone as it looks to internationalize the yuan, it added.

Editor: James Boynton