China Securities Depository and Hong Kong Securities Clearing Company sign MOU

Source: China Securities Depository

China Securities Depository and Clearing Corporation (SD&C) and Hong Kong Securities Clearing Company (HKSCC) signed in Beijing a Memorandum of Understanding (MOU) on information and personnel exchange on 17 September 2004 (Friday).

SD&C President Chen Yaoxian and Hong Kong Exchanges and Clearing (HKEx) Chief Executive Paul Chow spoke at the ceremony and signed the MOU on behalf of their institutions. SD&C General Manager Jin Ying, Deputy General Managers Liu Chunxu and Zhang Fan, and HKSCC Chief Executive Stewart Shing also attended the ceremony.

Chen Yaoxian said in his speech that the SD&C, in its development, had attached great importance to learning from the experiences and practices of developed markets, and to actively initiating cooperation and exchanges with counterparts in other regions, including Hong Kong. Hong Kong and Mainland capital markets have an important and distinctive relationship, and a good foundation and tradition for cooperation.

The signing of the MOU will set out the direction and objective of cooperation between the Hong Kong and Mainland clearing houses, establish formal channels for their information and personnel exchange, and broaden their scope of cooperation in business development and institutional innovation.

The MOU represents a significant step forward in securities clearing cooperation between the Mainland and Hong Kong. It will facilitate the exploration of substantive joint projects, the improvement of the two parties' clearing systems, the development of secure and highly efficient clearing structures and the effective management of clearing risks. It will also play a significant part in prospering the two financial markets and boosting cross-border investment between them.

As the number of Mainland companies listed in Hong Kong increased, Paul Chow said, there would be closer ties between Mainland and Hong Kong securities markets. At present, he said, some enterprises were dually listed on the Mainland and in Hong Kong. He expected that the phenomenon would continue. The signing of the MOU will bring about closer ties of cooperation between the two markets in the clearing business, and establish for the two clearing institutions a good foundation for cooperation in the future exchange of personnel and market experience, in conducting studies into the improvement of risk management and in information exchange. Chow believed this MOU was an important document of far-reaching impact, which would strengthen relations between Mainland and Hong Kong clearing institutions and promote the two markets' healthy development.

HKSCC is HKEx's wholly owned subsidiary responsible for the clearing business of the Hong Kong securities market and the provision of central securities depository services. SD&C has now signed MOUs on information and personnel exchange with four securities depository and clearing institutions: Korea Securities Depository, Japan Securities Depository Center, Inc., OMHEX and HKSCC.

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