Linklaters has advised the Hong Kong Exchanges and Clearing Limited (“HKEx”) over the past year and a half on the establishment of the Shanghai-Hong Kong Stock Connect. This programme will create trading and clearing links that enable Hong Kong and overseas investors to trade in securities listed on the Shanghai Stock Exchange and Mainland Chinese investors to trade in securities listed on the Stock Exchange of Hong Kong. 

Linklaters assisted HKEx on Hong Kong and China issues in respect of this innovative structure.  This included creating a novel contractual framework for establishing the links between the two Exchanges and the respective Hong Kong and Chinese clearing houses as well as a harmonious underlying legal framework. In addition to being intellectually stimulating, the adaptation of the trading and clearing features of China A market to conform to those of the Hong Kong market (and the features of Hong Kong stock market to conform to those in Mainland China) also called for a variety of critical legal skills and approaches.  

This novel and complex project required specialist input from Linklaters’ clearing, financial regulatory and corporate experts across Hong Kong, Beijing and Shanghai. The team was led by Hong Kong partners Chin-Chong Liew, Teresa Ma, Stephen Fletcher and Umesh Kumar and Shanghai partner Fang Jian with support from counsels Karen Lam, Eric Liu and Kevin Marr, senior lawyer Simon Zhang and a number of associates throughout the firm’s regional network.

 Commenting on the programme, Mr Liew said:

 “The Shanghai-Hong Kong Stock Connect opens a new chapter in China’s financial integration with the world and we are very proud to be advising HKEx on this ground-breaking project. The implications are far reaching as it will unleash China’s vast savings on the global financial markets and international investors will be able to access the China growth story. This will also serve as a model of collaboration between exchanges and clearing houses, not just in China, but around the world.”