Chinese securities published rules for the long-awaited Shanghai and London Stock Connect program last Friday, paving the way for companies listed in the two cities to enter each other’s stock exchanges.
The China Securities Regulatory Commission issued trial guidelines on the stock connect program, which will allow stocks listed on the Shanghai and London exchanges to be traded in each other’s markets by issuing depositary receipts.
The CSRC revised some items in the previous version of rules after seeking public comment for over a month, including the restricted redemption period for domestic companies issuing Global Depositary Receipts and the rights issue of overseas companies after their China Depositary Receipts offering.
The guidelines also detailed procedures and requirements for the CDR and GDR issuances, such as the review and approval procedure, continued regulation and law enforcement.
The Shanghai-London Stock Connect program, first considered after Chinese President Xi Jinping’s visit to the UK in October 2015 and the Seventh China-UK Economic and Financial Dialogue, is an important initiative to deepen China-UK financial cooperation, marking China’s efforts to further open up its financial markets to foreign investors.