Stock Connect explained: Shanghai, Shenzhen and Hong Kong

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This guide explains Stock Connect as Hong Kong Exchanges and Clearing (HKEX), Hong Kong’s Securities and Futures Commission (SFC) and the China Securities Regulatory Commission (CSRC) describe it; explanations of the CSRC’s Chinese text are our translations. It recommends no security or broker. HKEX’s Information Book for Investors and FAQ (both dated 6 July 2026) defer to the exchanges’ and clearing houses’ rules, and the book “is not exhaustive”: check the current documents before you trade.

Four trading links

Stock Connect links the Shanghai (SSE) and Shenzhen (SZSE) stock exchanges with the Stock Exchange of Hong Kong (SEHK). Shanghai Connect launched on 17 November 2014, Shenzhen Connect on 5 December 2016, and exchange-traded funds (ETFs) were added on 4 July 2022. Each has two directions:

• Northbound: investors, through Hong Kong brokers, trade eligible shares and ETFs listed in Shanghai or Shenzhen.
• Southbound: eligible investors, through Mainland securities firms, trade eligible shares and ETFs listed in Hong Kong.

The clearing houses, Hong Kong Securities Clearing (HKSCC) and China Securities Depository and Clearing (ChinaClear), are participants of each other. The SFC says “more than 2,000 eligible shares in Shanghai, Shenzhen and Hong Kong are covered by the scheme” (page last updated 26 August 2020).

Who may trade

Northbound. Hong Kong and overseas investors may trade any eligible security, except that shares on the SZSE’s ChiNext board and the SSE’s STAR Market may only be traded by institutional professional investors.

Since 25 July 2022, under implementation measures of the SSE and the SZSE, “Mainland investors would be prohibited from buying or selling China Connect Securities through Northbound Trading under Stock Connect”. As HKEX explains it, they may not actively buy, including subscribing for rights issues; they can still sell shares they already hold, and shares received through corporate actions such as stock dividends are not affected. HKEX counts as Mainland investors:

• individuals holding Mainland identity documents: the household register (hukou), the Resident Identity Card, a passport of the People’s Republic of China or the Exit/Entry Permit for Travelling to and from Hong Kong and Macao;
• holders of a joint account if one of them is such an individual;
• companies and other entities registered in the Mainland.

Not counted: holders of a One-way Permit or of proof of permanent residence outside Mainland China, and Hong Kong or overseas branches and subsidiaries of Mainland entities.

Southbound. Only Mainland institutional investors and individual investors “who hold an aggregate balance of not less than RMB 500,000 in their securities and cash accounts” are accepted. The 2014 joint announcement of the CSRC and the SFC set the same limit for individuals. The CSRC’s Stock Connect rules (Order No. 128 of 30 September 2016) leave the detailed suitability standards for southbound investors to the Shanghai and Shenzhen exchanges, which file them with the CSRC.

Daily quotas

• Amounts: RMB 52 billion a day northbound and RMB 42 billion a day southbound, for each of Shanghai Connect and Shenzhen Connect, in force since 1 May 2018 (SFC announcement of 11 April 2018). A shares and ETFs share the quota.
• No aggregate quota: the aggregate quota for Shanghai Connect was abolished on 16 August 2016, and Shenzhen Connect never had one.
• Net buying only: the quota is applied on a net-buy basis, so “investors are always allowed to sell their cross-boundary securities regardless of the quota balance”.
• Daily reset: unused quota is not carried over to the next day.
• When it runs out (northbound): if the balance drops to zero during continuous trading, no further buy orders are accepted that day; accepted orders stay on the book. HKEX shows the balance once it falls below 30%, and “Available” otherwise.

Which securities are eligible

Northbound covers only A shares and ETFs; B shares, bonds and other securities are not included.

• A shares: constituents of the SSE A Share Index (Shanghai) or the SZSE Composite Index (Shenzhen) whose daily average market capitalisation over the last six months is at least RMB 5 billion and daily average turnover at least RMB 30 million, not suspended on half or more of the trading days, plus A shares whose H shares are listed in Hong Kong. Shares not traded in renminbi or under “risk alert” are excluded.
• ETFs: their own criteria apply, such as a six-month daily average of at least RMB 500 million under management.

Southbound covers only stocks and ETFs listed on the Main Board in Hong Kong. GEM stocks, Nasdaq Pilot Programme stocks, real estate investment trusts (REITs), structured products and bonds are not included.

• Stocks: constituents of the Hang Seng Composite LargeCap and MidCap indices, constituents of the Hang Seng Composite SmallCap Index with a market capitalisation of at least HKD 5 billion, and H shares whose A shares are listed in Shanghai or Shenzhen. Excluded are shares not traded in Hong Kong dollars, H shares whose corresponding shares trade on another Mainland exchange, and H shares whose A shares are under risk alert.
• ETFs: ETFs primarily regulated by the SFC and traded in Hong Kong dollars, with a six-month daily average of at least HKD 550 million under management, listed for six months or more, and neither synthetic nor leveraged and inverse products.

A security that later stops meeting the criteria can become sell-only. HKEX publishes the full lists of eligible securities.

Trading days and hours

Northbound trading follows the Shanghai and Shenzhen hours: an opening call auction from 9:15 to 9:25 a.m., continuous trading from 9:30 to 11:30 a.m. and from 1:00 to 2:57 p.m., and a closing call auction from 2:57 to 3:00 p.m. Southbound trading follows SEHK’s trading hours.

Since the trading calendar enhancement of April 2023, northbound trading is open on a Hong Kong business day when both the Hong Kong and the Mainland markets are open, and HKEX adds: “A similar arrangement has been adopted for Southbound trading.” HKEX publishes the Stock Connect trading calendar for each year.

Currency, orders and settlement

• Currency: Hong Kong and overseas investors trade and settle Shanghai and Shenzhen securities in renminbi only. Mainland investors trade Hong Kong securities in Hong Kong dollars only and settle the trades with ChinaClear or its clearing participants in renminbi.
• Orders: northbound trading accepts only limit orders. Southbound trading accepts at-auction limit orders in the pre-opening session and enhanced limit orders in the continuous trading session.
• Northbound settlement: shares settle on the trade day (T) and money on T or T+1, as the case may be; brokers’ own arrangements may differ.
• Southbound settlement: HKSCC is the central counterparty; ChinaClear, as its participant, settles with it in Hong Kong and, under the CSRC’s rules, is responsible for clearing and settling southbound trades. Investors settle with their securities firm in renminbi.
• How southbound shares are held: they are recorded in ChinaClear’s account at HKSCC. ChinaClear’s holding record is the legal proof of the investor’s rights; ChinaClear exercises shareholder rights in its own name after asking investors for their views, and investors cannot ask for paper certificates.

Oversight and investor protection

• Regulators: under a memorandum of understanding of 17 October 2014, later extended to Shenzhen Connect, the SFC and the CSRC share information on suspected wrongdoing, investigate jointly and coordinate enforcement.
• Compensation: since 1 January 2020, Hong Kong’s Investor Compensation Fund covers northbound trading. The HKEX documents we read say nothing about compensation for southbound investors.
• Suspension: SEHK, the SSE and the SZSE may suspend either link, for one security or all, to keep the market orderly and fair, after seeking the relevant regulator’s consent.