Investing through Shanghai-London Stock Connect

> Investing in GDRs

> Investing in CDRs

A New Route to China: Investing in Stock Connect Global Depositary Receipts

Shanghai-London Stock Connect offers international investors the opportunity to invest in high quality blue chip Chinese issuers through an instrument fungible with a company’s Chinese A Share listing. This enables global investors to embed Chinese equities in their standard portfolio management practices, free from quota controls.

Key features of Connect GDRs include:

  • Connect is an issuer led programme, with only high-quality companies with a market capitalisation of over 20 billion RMB, already listed in Shanghai able to take part.
  • Companies will be further approved by CSRC to issue a GDR as well as produce a full English language UKLA approved prospectus.
  • All trading in London will follow local rules and trading and settlement practices.
  • Stock Connect GDRs will be traded on the Shanghai Segment within the International Order Book (IOB). The Shanghai Segment will be open between 09.00-16.30 (GMT/BST).
  • Stock Connect GDRs can be listed in USD and other currencies.
  • A network of designated brokers, able to act in both Shanghai and London, will ensure the fungibility between the GDRs and the underlying A Shares
  • Cross border transaction settlement cycle as follows: GDR creation settles on T+2, while redemption is on T+3 (this can be shortened to T+1 and T+2 respectively through the use of inventory).
  • Investors can instruct their brokers or directly engage with designated brokers in order to redeem or cancel GDRs.

To learn more about investing through Shanghai-London Stock Connect, please contact the Stock Connect team here.

The First International Listings in Shanghai: Investing in Stock Connect Chinese Depositary Receipts

Shanghai-London Stock Connect is the first-time Chinese investors are able to invest directly in high quality international London-listed companies. Institutional and suitable individual investors will be able to integrate these securities into their standard portfolio management practices, free from quota controls.

Key Features of Connect CDRs include:

  • Connect is an issuer led programme, with only high-quality companies with a market capitalisation of over 20 billion RMB, already listed in London for at least 3 years (1 year premium listed) able to take part.
  • CDR issuers will establish a securities affairs office in mainland China to manage information disclosure and ensure efficient communication with investors.
  • Companies will also be approved by CSRC and SSE to take part in Connect.
  • All trading in Shanghai will follow local rules and trading and settlement practices.
  • Stock Connect CDRs will be traded on the Main Board of the Shanghai Stock Exchange.
  • Stock Connect CDRs can be listed in RMB
  • A network of designated brokers, able to act in both Shanghai and London, will ensure the fungibility between the CDRs and the underlying securities
  • On a normal settlement cycle CDR creation settles on T+3 (this can be streamlined to T+1 using OTC or SBL), while redemption is on T+2.
  • Investors can instruct their brokers or directly engage with designated brokers in order to redeem or cancel CDRs.
  • Individual investors wishing to trade CDRs will have to meet a number of requirements including having no less than RMB 3 million in cash and securities in their accounts.

To learn more about investing through Shanghai-London Stock Connect, please contact the Stock Connect team here.