The Through-Train Leaves the Station: Hong Kong-Shanghai Stock Connect Launches

December 17, 2014

Market participants were unsure what to expect when “Stock Connect” launched the morning of Monday, November 17, 2014. The program, sometimes called the Shanghai-Hong Kong “through-train”, provides a trading link between the Hong Kong and Shanghai Stock Exchanges that enables the participants of one exchange to trade certain equities on the other. With access to the Chinese securities markets still tightly regulated, Stock Connect represents a new route – and for some market participants, the only route – to trade Shanghai-listed equities. But the program relies on new infrastructure providing connectivity between the exchanges and a quota that limits total northbound and southbound purchases. On Day One, there were lingering questions about how such infrastructure would function in practice.

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