China Securities regulator nearer approval of HK-SZ stock connect

BEIJING - China's securities regulator has created a special task group to guide and coordinate policymaking and technical operating issues for the long-planned Shenzhen-Hong Kong stock connect that will more closely link the Chinese stock market with foreign investors, according to people with knowledge of the matter.

The Shenzhen stock connect will allow Chinese and foreign investors to buy and trade select securities on the other side's market within pre-set quotas, further opening the Mainland's stock market to foreign investment communities.

Caixin reported that the initiative comes amid concerns about capital outflows fuelled by a depreciating RMB, as reflected by unbalanced trading activity through an existing link between the stock markets in Shanghai and Hong Kong, which began in late 2014.

Trading through the southbound channel of the Shanghai Hong Kong stock connect, which allows investors on the Mainland to buy stocks in Hong Kong, has used up about 80% of its aggregate quota of RMB250 billion, while northbound investments totalled less than half of its RMB300 billion quota.

The China Securities Regulatory Commission has not published any timetable for launching the Shenzhen Hong Kong stock connect. The task group it created, led by CSRC Vice Chairman Fang Xinghai, will work with experts at the Hong Kong Exchanges and Clearing Co. (HKEx) to prepare for the stock connect by continuing to do research and advising policymakers on important regulatory issues, the sources said. www.webershandwick.cn (ATI).