Trading systems and services vendor Fidessa reports that five Hong Kong-based brokers are in the first group that will be using Fidessa for the forthcoming Shanghai-Hong Kong Stock Connect (aka, China Connect) link when it goes live in mid-October.
The China Connect program will “open up access to mainland China by allowing offshore investors to trade Shanghai-listed shares via the Hong Kong market,” and also will “allow mainland China-based investors to trade in Hong Kong listed shares via the Shanghai market,” according to Fidessa, which notes too that “until now, international access to the Chinese market has been strictly controlled via quotas and was limited to a small number of large institutional investment firms under China’s QFII program.”
Through China Connect, “new quotas for trading in Shanghai listed A-Shares [are] being made available to a wider community of both retail and institutional offshore investors,” who will be able to “clear through the local Hong Kong clearing infrastructure,” Fidessa’s statement notes.
“Fidessa recognized the potential for this early on,” David Jenkins, head of product marketing at Fidessa in Asia Pacific, says in the statement. “But implementing this link successfully involves additional technology infrastructure, as well as new tools and processes right across the front, middle and back office, in order to take full advantage of the Shanghai market.”
The company’s solution to the issues raised by China Connect “included designing the right algorithms to cater for the wider spreads, transient liquidity and volatility associated with trading the Shanghai market,” Fidessa says.
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