Shenzhen Financial Office "a letter": Pilot Shenzhen-Hong Kong stock market mutual speculation

Days ago, the Shenzhen Financial Office has formally formulated a package of breakthrough cooperation in the Shenzhen-Hong Kong capital market, including Shenzhen with the HKEx, Shenzhen B and HKEx share trading, as well as Shenzhen as a pilot for red-chip companies to issue a A-shares, and write the "Shenzhen financial reform comprehensive Pilot Zone program",　　Will report to the Shenzhen Municipal committee and even central approval. HKEx responded by saying that there must be two prerequisites for the implementation of the programme, one for central approval and the other for special arrangements for RMB convertibility.　　Before that, Mr Joseph Yam, chief executive of the HKMA, creatively proposed that Hong Kong equities could be traded directly in renminbi. The government will study the package. The newspaper confirmed yesterday that Shenzhen had formally formulated a package of breakthroughs in the Shenzhen-Hong Kong capital market, including the exchange of links with the HKEx (hereinafter referred to as the HKEx) and the exchange of shares between the Shenzhen B and HKEx,　　As well as Shenzhen become red-chip company issued a a-share pilot. It is reported that the package is now written in the Shenzhen financial office led the formulation of the "Shenzhen financial reform comprehensive Pilot Zone program."　　Shenzhen Financial Office director Lin in the media interview, the program from May this year began to formulate, the general principle is to adhere to the concept of reform, innovation and openness to promote the integration of the Shenzhen-Hong Kong capital market. Once the above scheme is implemented, the integration of the Hong Kong-Shenzhen exchanges will undoubtedly make substantial progress. Shenzhen and HKEx will make Shenzhen a pilot city for individuals to invest directly in overseas securities markets.　　At the same time, the mutual listing of B and H shares will increase the liquidity of both capital markets. "What the package contains is now inconvenient to disclose because it is a preliminary idea and is the goal of Shenzhen." "Yesterday, Shenzhen financial office people told this newspaper," Shenzhen financial reform comprehensive Pilot Zone program "is still in the process of making perfect, the Shenzhen municipal government will meet to discuss."　　If the discussion is adopted, the programme will be submitted to Guangdong province and even central. Has the proposal made by Shenzhen also included the views of the HKEx? In response, the HKEx spokesman did not respond positively, but stressed that the HKEx supported the market in conducting an in-depth study of the proposed proposals.　　The spokesman said that to achieve the relevant ideas, there must be two prerequisites, one is the central approval, the SFC agreed, and the other is to make special arrangements for renminbi convertibility. Comprehensive integration of the difficult HKEx's cautious attitude, due to the difficulty of the implementation of the programme.　　Guo Jiayao, director of investment research at Dun Yan Financial Holdings Limited, told the newspaper that the biggest hurdle was that renminbi capital projects had not yet been opened. Guo Jiayao Analysis, once the Shenzhen and HKEx to implement line trading, Shenzhen B and HKEx H-share trading, will involve the renminbi exchange issue.　　At present, the RMB cross-border settlement is mainly limited to the pilot, and the daily capital turnover of the cities is tens of billions of yuan, unless the renminbi open capital account, to achieve internationalization, it is difficult to achieve. and red-chip companies in Shenzhen stock issued a shares, implementedis not easy.　　Guo Jiayao Analysis, the HKEx's red-chip companies are mostly registered overseas, and if they are listed on the mainland, how the mainland's supervision is a problem. However, in the He Shing, director of the National Credit Securities Institute, the Shenzhen Financial cooperation is close to the mainland's potential for personal direct investment in the mainland of the market of the pilot city, the company can also strive to become a red-chip companies issued a a-share pilot.　　As for the Shenzhen and HKEx, He Shing believes that it is still a long way from the two places, because the accounting system and the regulatory regime are completely different.　　Although the operational pilot may be a hindrance, in the industry's view, the implementation of the content of the programme is a general trend and can be phased out through the way of CDR (that is, the Chinese depositary voucher) and the Hong Kong Stock Exchange Exchange Fund (ETF). For the pilot, Shenzhen has also been considered.　　The news from Shenzhen Financial office revealed that the Shenzhen stock company is now actively seeking the CSRC to allow Shenzhen to pilot Hong Kong stock ETF and CDR. Guo Jiayao Analysis, ETF and CDR involved in less money, the participation of companies have been selected, the implementation of the risk is relatively controllable, its pilot is likely to be accepted by the government. As long as the risk of capital flows is controllable, in Guo Jiayao's view, there is no technical barrier to the implementation of the pilot. Both the trading platforms of Shenzhen and HKEx are mature and successful from the International Experience of ETF and CD R.　　As for the price deviation of a-share and H-shares, Guo Jiayao said the deviation would gradually shrink as more transactions between the two places increase.　　A Shenzhen government department personage tells this newspaper, the stock Exchange and the HKEx integration's formulation is long-standing, because the two places legal supervisory system different, the integration breakthrough mainly lies in the business pilot. "The mutual listing of B and H shares will increase the liquidity of the capital markets in both places, which is a major direction for future financial cooperation between the two places." "To this end, Shenzhen to further accelerate the development of the financial industry, the pace of internationalization, but also need to give more pilot power at the central level," said He Shing, director of the National Credit and Securities Institute. As for the exchange of renminbi between the exchanges, the chief executive of the HKMA, Mr Joseph Yam, creatively proposed that Hong Kong stocks could be traded directly in renminbi. In an interview with the Wall Street Journal on July 10, Mr Yam said he would not rule out the possibility of the renminbi becoming a daily currency in Hong Kong. Macao, for example, is a special administrative region of China as well as Hong Kong, where both the Hong Kong dollar and the Macao dollar are common currencies.　　Mr Yam said he would like to see the Hong Kong stock market traded in renminbi and HK $ two currencies. Mr Yam pointed out that Hong Kong and mainland equities would eventually interact, so that the same financial instrument issued by the same company might trade at the same price in both markets.　　As to the manner in which the transaction was made, Mr Yam suggested that the mainland and Hong Kong would be traded on the basis of the mainland depository receipts (meaning CD R) and Hong Kong depository receipts as a way for foreign companies to use the US depository receipts for trading in the US stock market. Newspaper reporter Sinling Huiping