The Shanghai-Hong Kong Stock Connect programme is scheduled to commence in mid-October this year. For the first time it will allow people in mainland China to invest in foreign stocks and allow foreign investors to buy stocks in the Shanghai Stock Exchange through Hong Kong brokerage accounts, which are subject to an annual quota. This is a significant step in the development of China’s capital markets and its attempts to integrate further with the global financial community.

The new module in NOVA, Dion’s clearing and settlement solution for both retail and institutional firms, supports Shanghai-Hong Kong Stock Connect and enables the processing of cross-border trades made by Hong Kong brokers on the Shanghai Stock Exchange. It addresses the key differences between the two exchanges, including the process changes required to handle multiple market execution feeds and the difference in trade processing times, while resolving the differences in report formats.

Joe Nash, Managing Director - Asia, Dion said: “Shanghai-Hong Kong Stock Connect is a key development for China’s mainland global financial integration. Dion has been working with brokers in Hong Kong for almost 20 years, providing solutions that not only satisfy local requirements, but also enable firms to trade in regional and global markets. Over this time, China has become an economic giant and we see the Stock Connect programme as a significant leap in China’s efforts to expand its domestic equity market.”

Nash continues, “The new NOVA module allows our clients in Hong Kong to process all Shanghai-Hong Kong cross-border trades seamlessly, complying with all the regulatory requirements in both regions.”