CHINA: Shenzen Stock Exchange Issues Implementation Rules to facilitate the Full Circulation of H-Shares

Tuesday April 24 2018

On 23^rd April 2018, Shenzen Stock Exchange announced that it had issued Implementation Rules on the “full circulation” of H-shares.

These rules received approval from the China Securities Regulatory Commission (CSRC), China Securities Depository and Clearing Corporation Limited (CSDC).

The “full circulation” of H-shares refers to an arrangement which allows shareholders of a foreign (listed companies to buy and sell shares in overseas markets through CSDC. These shares are originally registered in domestic China and can only be circulated abroad once the the share registration is transferred overseas . This Pilot Project aims at accelerating the capital market reform and opening up in the new era and deepening the reform of overseas listing system.

The Implementation Rules govern the registration and management of H-share “full-circulation” pilot registration and transaction settlement business.

The Rules consist of nine chapters, totaling 46 articles, namely, general rules, account arrangements, cross-border transfer registration, depository and holding record-keeping and maintenance, transaction entrustment and order transfer, clearing settlements, nominal holder services, risk management and attachments.

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