Listing through Shanghai-London Stock Connect

Listing through Shanghai-London Stock Connect

Listing GDRs in London Listing CDRs in London
> Why list GDRs on London Stock Exchange? Why list CDRs on Shanghai Stock Exchange?
> How does it work? How does it work?
> What are the eligibility criteria? What are the eligibility criteria?

GDRs in London

Why list GDRs on London Stock Exchange? (back to the top)

Listing Global Depositary Receipts (GDRs) on the London Stock Exchange offers a unique opportunity for Shanghai Stock Exchange A-Share issuers to access global investors and benefit from the high quality of London’s institutional investors, advisory community and sell-side research coverage.

A GDR listing under Stock Connect allows Chinese companies to raise foreign capital to fund their development globally. London-listed shares are accepted as an acquisition currency in more jurisdictions than any other exchange.

GDR issuers also gain access to London Stock Exchange’s comprehensive Issuer Services platform and can shape new relationships with some of the world’s leading institutional investors.

How does it work? (back to the top)

Stock Connect gives Shanghai Stock Exchange listed issuers the opportunity to admit securities (GDRs) onto the London Stock Exchange which are fungible with their underlying A Share listing.

Stock Connect GDRs will be admitted to trading on the Shanghai Segment, a special segment within the International Order Book (IOB) and open for trading from 09:00 to 16:30 (GMT/BST).

The GDRs are traded during London trading hours under London trading rules. Clearing will take place at LCH and settlement in Euroclear Bank.

What are the eligibility criteria? (back to the top)

GDR Issuers under Connect must meet certain eligibility criteria. Issuers must:

  • have a minimum market capitalisation of RMB 20bn (approx. USD $2.9bn)
  • be listed on Shanghai Stock Exchange
  • obtain CSRC approval
  • have any new shares raised admitted to listing on Shanghai Stock Exchange
  • meet UKLA Listing Rules and London Stock Exchange Admission and Disclosure Standards
  • comply with 25% free float requirement for their GDR listing

For a full list of the relevant rules and regulations please view the rules framework.

CDRs in London

Why list CDRs on Shanghai Stock Exchange? (back to the top)

Shanghai-London Stock Connect (“Stock Connect”) offers London Stock Exchange listed companies their first ever opportunity to be listed in mainland China. They will be the first foreign companies to directly access the domestic Chinese equity investor pool, the second largest in the world.

A CDR listing presents an opportunity to gain presence in two distinct capital markets with a fungible instrument allowing prices to be aligned in both markets.

How does it work? (back to the top)

Stock Connect CDRs will be listed on the Shanghai Stock Exchange Main Board. They will be treated like domestic Chinese ‘A Shares’ and fungible with the underlying share in London. They will be traded during Chinese trading hours by Chinese investors with clearing and settlement taking place in China Clear.

Initially, Connect CDRs will not be used to raise additional capital and will be available to investors with more than 3 million RMB in financial assets.

What are the eligibility criteria? (back ot the top)

In order to list CDRs in Shanghai, issuers must

  • have a minimum market capitalisation of RMB 20bn (approx. USD $2.9bn)
  • be listed on the London Stock Exchange for at least 3 years with a minimum of 1 year on the Premium Segment of the Main Market.
  • issue a minimum of 50 million units of CDRs representing RMB 500 million worth of underlying shares
  • hold or acquire sufficient underlying shares (new capital raising is not permitted for CDRs)
  • obtain permission from CSRC and comply with Shanghai Stock Exchange requirements

For a full list of the relevant rules and regulations please view the rules framework.