Shanghai-London Stock Connect Sets USD79 Billion Trade Cap

DU QINGQING

(Yicai Global) June 18 — The Shanghai-London Stock Connect, which launched yesterday, has fixed a CNY550 billion (USD79 billion) limit on cross-border stock trades.

Eastbound trades will be capped at CNY250 billion and westbound business will be restricted to CNY300 billion, the Shanghai and London Stock Exchanges said yesterday.

“Huatai Securities is the first and only global depositary receipt listed on the LSE, so the quota is set fairly high,” a stockbroker who chose to remain anonymous told Yicai Global. “Tighter restrictions are not likely to come in anytime soon, which is a sign of regulatory confidence in the scheme.”

The next big step will be for firms listed in Britain to issue Chinese depositary receipts to complete the Shanghai-London Stock Connect as a two-way system, he added, saying HSBC could be first in line to do so as financial institutions are easy for investors to understand and the lender has already floated shares in stock markets around the globe.

Which company will actually be first to float eastbound through the program is still to be determined, according to the SSE, which said potential companies and institutions are consulting listing rules in preparation to join the scheme.

Editors: Dou Shicong, James Boynton