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SZ-HK Connect Education

What is Shenzhen-Hong Kong Stock Connect?
Shenzhen-Hong Kong Stock Connect is a mechanism established for connectivity of trading and clearing between Shenzhen and local securities markets. The mechanism involves Northbound Trading and Southbound Trading.

With Northbound Trading, investors, through their local brokers and a securities trading service company to be established by SEHK, will be able to place orders to trade eligible shares listed on SZSE by routing orders to SZSE.

With Southbound Trading, eligible investors, through Mainland securities firms and a securities trading service company to be established by SZSE, will be able to place orders to trade eligible shares listed on SEHK by routing orders to SEHK.

Overview of Shenzhen-Hong Kong Stock Connect Features
  Northbound Trading Southbound Trading
Qualification Local and overseas investors are allowed to trade
(ChiNext only open to institutional professional investors)
Institutional investors or holders of personal account with no less than RMB500,000.
Investment Products 1. Constituents of
* With market capitalisation at least RMB 6B
2.A shares of SZSE-SEHK A+H
1. Constituents of
2.H-shares of SSE-SEHK A+H
3.H-shares of SZSE-SEHK A+H
Ineligible Products
  • SZSE-listed shares which are not traded in RMB
  • SZSE-listed shares which are under risk alert
  • Local shares that are not traded in HKD
  • H shares which have corresponding shares listed and traded on any exchange in Mainland China other than SSE/SZSE;
  • H shares which have corresponding A shares put under risk alert or delisting arrangement
Daily Quota RMB52 billion RMB42 billion
Number of Tradable Stocks (As of 2021/07/15) 846 521
Trading Hours Opening call auction hours Pre-opening hours
09:15 - 09:25* 09:00 - 09:30
Continuous auction hours Continuous trading hours
09:30 - 11:30* 09:30 - 12:00
13:00 - 14:57* 13:00 - 16:00
Closing Call Auction hours Closing Auction Session
14:57 - 15:00* 16:00 - 16:10
Trading Currency Trading and settlement by RMB Trading and settlement by RMB
Stock Code 6 digits
(Eg: GF SEC A Share code: 000776)
5 digits
(Eg: GF SEC H Share code: 01776)
Order Type Limit orders only Pre-opening session: At-auction limit orders only
Continuous Trading Hours: enhanced limited orders only
Closing Auction: At-auction limited orders only
Day Trading Not Allowed Allowed
Odd Lot Selling only Selling only, offers possibly inferior to market prices
Short Selling Allowed Not Allowed
Margin Financing Allowed Allowed
IPO Subscription Not Allowed Not Allowed
Lot Size 100 shares Varies among stocks
Order Size Limit 1 million shares 3000 Lots
Minimum Spread RMB0.01 Depends on stock price
Volatility Restriction ±10% against previous closing price or
±5% against previous closing price for stocks under risk warning
Under Volatility Control Mechanism (VCM), HSI & HSCEI constituent stocks will put into a cooling off period for 5 minutes if the stock price fluctuates more than 10% from the reference price from 5 minutes ago. Maximum of 1 trigger in morning and afternoon session.
Settlement Cycle T for stocks; T+1 for funds T+2 for stocks and funds
Shareholder Voting Through CCASS’s existing voting functions ChinaClear to collect and submit votes
*During 09:10-09:15, 09:25-09:30 and 12: 55-13:00, the SZSE does not process any orders until the market opening, but SEHK still accepts buying/selling orders and instruction for order cancellation order.
What kinds of shares are tradable through Shenzhen-Hong Kong Stock Connect?
  Northbound Trading Southbound Trading
Index Constituents SZSE Component Index Hang Seng Composite LargeCap Index constituents
SZSE Small/Mid Cap Innovation Index Hang Seng Composite MidCap Index constituents
With market capitalisation at least RMB 6B Hang Seng Comp Small Cap Index(with market capitalisation at least HK$5B)
A+H Shares A shares of SZSE-SEHK A+H H-shares of SSE-SEHK A+H
H-shares of SZSE-SEHK A+H
Ineligible Stocks
  • SZSE-listed shares which are not traded in RMB
  • SZSE-listed shares which are under risk alert
  • Local shares that are not traded in HKD
  • H shares which have corresponding shares listed and traded on any exchange in Mainland China other than SSE/SZSE;
  • H shares which have corresponding A shares put under risk alert or delisting arrangement
Number of Stocks (As of 2021/07/15) 846 521
Transaction Cost Transaction amount x 0.11087% Transaction amount x 0.1077%* + HK$0.5 per trade
* Including stamp duty, exchange fee, SFC levy and transfer fee

Stocks of Northbound Trading would be suspended for buying (still allowed for selling) under the following circumstances:
(a) such securities subsequently cease to be a constituent stock of the relevant indices; and/or
(b) such securities are, based on any subsequent periodic review, determined to have a market capitalisation of less than RMB 6 billion; and/or
(c) they are subsequently placed under risk alert; and/or
(d) the corresponding H shares of such securities are subsequently delisted from SEHK, as the case may be

Stocks of Southbound Trading would be suspended for buying (still allowed for selling) under the following circumstances:
(a) the SEHK Security subsequently ceases to be a constituent stock of the relevant indices; and/or
(b) the corresponding A share of the SEHK Security ceases to be traded on SZSE or is put under risk alert; and/or
(c) the constituent stock of HSSI without corresponding A share listed on SZSE subsequently with market capitalisation less than HKD 5 billion based on any subsequent periodic adjustment of relevant index; and/or
(d) where the SEHK Security is an H share and the A shares of the issuer becomes subsequently listed on an exchange in the Mainland instead of SZSE, as the case may be
Can investors buy or sell stocks in Shenzhen-Hong Kong Stock Connect through existing local brokers?
Local and overseas investors can choose any SEHK participant for trading stocks in Shenzhen-Hong Kong Stock Connect, but the chosen participant must be eligible to participate in scheme.
Investment Quota Restriction on Shenzhen-Hong Kong Stock Connect
Shenzhen-Hong Kong Stock Connect is for RMB cross-border investments subject to daily quota management with real-time monitoring. The quota is served on the first-come-first-served principle.

The “Quota” does not refer to the total inflows, rather, it indicates the upper limit for the difference between the buying and selling values. All quota refers to the net amount after the buying value minus selling value. The daily quota is refreshed on a daily basis and to maintain the same. The unused daily quota cannot be rolled over to the quota for the following day.

Investment Quota Northbound Trading Southbound Trading
Daily Quota (RMB) 52 billion 42 billion

Daily quota balance = Daily quota – Buying order value + Selling transaction value + Adjustment*
*Daily quota balance is increased under the following circumstances:
Buying order is cancelled, or
Buying order is rejected by the exchange on the other side, or
Buying order is executed for a better price

The stocks in Southbound Trading are traded by Mainland investors in in Hong Kong dollar only and settle the trades with ChinaClear or its clearing participants in Renminbi.
The stocks in Northbound Trading are traded and settled in Renminbi by local and overseas investors.

If Daily Quota Balance drops to zero or is exceeded during a continuous auction session (Continuous Trading), no further buy orders will be accepted for the remainder of the day.

If Daily Quota Balance drops to zero or is exceeded during the opening call session, new buy orders will be rejected. However, the Daily Quota Balance may resume to a positive level before the end of the opening call auction due to order cancellation. When that happens, SEHK will again accept buy orders.

It should be noted that buy orders already accepted will not be affected by the Daily Quota being used up and will remain on the order book of SZSE unless otherwise cancelled by the relevant EPs.
Trading Hours for Shenzhen-Hong Kong Stock Connect
The session for Northbound Trading is in line with the trading hours of SZSE. SEHK starts to accept the orders from SEHK participants 5 minutes before the opening of morning session and afternoon session in SZSE.
SZSE Trading Session SZSE Trading Hours Time for EPs to input Northbound orders
Opening Call Auction 09:15-09:25 09:10-11:30
Continuous Auction (Morning) 09:30-11:30
Continuous Auction (Afternoon) 13:00-14:57 12:55-15:00
Closing Call Auction 14:57-15:00

During 09:20-09:25,14:57-15:00, SZSE does not accept instructions for order cancellation;
During 09:10-09:15, 09:25-09:30 and 12: 55-13:00, the SZSE does not process any orders until the market opening, but SEHK still accepts buying/selling orders and instruction for order cancellation order;
The unmatched buying/selling orders in the Opening Call Auction are to automatically enter Continuous Auction. Any buy or sell orders not executed during the continuous auction session will automatically enter the closing call auction session.

The session for Southbound Trading is in line with the trading hours of SEHK.

Shenzhen-Hong Kong Stock Connect operates only on trading days for both Shenzhen and local securities markets. If the fund settlement day is not a trading day in local securities market, Northbound Trading is closed on the previous trading day.

If a Northbound trading day is a half trading day in local securities market, Northbound Trading will continue until SZSE market is closed.


  Mainland Local Securities Market Open for Northbound?
Day-1 Business Day Business Day Yes
Day-2 Business Day Business Day No Local securities market closes on money settlement day
Day-3 Business Day Public Holiday No Local securities market closes on trading day
Day-4 Public Holiday Business Day No Mainland market closes
Charges of Shenzhen-Hong Kong Connect
Relevant fees and taxes involved in Northbound Trading of Shenzhen-Hong Kong Stock Connect:
Item Rate Paying Party Receipt Party
Handling Fee 0.00487% of transaction value Both sides Shenzhen Stock Exchange
Securities Management Fee 0.002% of transaction value Both sides China Securities Regulatory Commission
Transfer Fee 0.02% of transaction value Both sides China Securities Depository and Clearing Corporation Limited
0.02% of transaction value Both sides HK Securities Clearing Company Ltd
Stamp Duty 0.1% of transaction value Seller State Administration of Taxation
Note: Mainland fees will be rounded to the nearest cent

Fees and Taxes to be confirmed by regulators and tax departments:
Item Detail Receipt Party
New CCASS Fee New fee for providing depository and nominee services to Clearing Participants for SZSE Securities (subject to approval by SFC) HK Securities Clearing Company Ltd
Dividend Tax Applicable to cash dividend and bonus issue (subject to clarification with SAT) State Administration of Taxation
Stamp Duty Applicable to the Northbound trades and SZSE Securities acquired through Shanghai Connect (subject to clarification with SAT) State Administration of Taxation

Dividend tax on Northbound Trading stocks is withheld by issuer and ChinaClear from payment. The New CCASS Fee is collected in HK Dollar monthly, if implemented.
Arrangement for Shenzhen-Hong Kong Stock Connect under Bad Weather
Scenario Northbound Trading Local Securities Market Today
Typhoon No.8 or Black Rainstorm issued before local securities market opens (i.e. 9:00 a.m.) Not open Not open
Typhoon No.8 issued between 9:00 a.m. and 9:15 a.m. Not open Trading suspends after pre-opening session
Typhoon No.8 issued after SZSE market opens (i.e. 9:15 am) Trading will continue for 15 minutes, thereafter, only order cancellation is allowed till SZSE market close Trading terminates in 15 minutes
Black Rainstorm issued after local securities market opens Normal trading Normal trading
Typhoon No.8 or Black Rainstorm discontinued at or before 12:00 noon Trading resumes after 2 hours Trading resumes after 2 hours
Typhoon No.8 or Black Rainstorm discontinued after 12:00 noon Not open Not open
Source: HKEx
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Last updated on 11 March 2020.