At a Glance…
London Stock Exchange Group Plc (LSE) has announced that shares can now be admitted to the Shanghai-London Stock Connect (Stock Connect). Stock Connect brings together one of the world’s largest domestic capital markets (Shanghai) with the world’s leading international market (London) and opens up the opportunity for global investors to trade shares in Chinese companies and for Chinese investors to buy shares in London-listed companies.
The LSE has described the new market as a “milestone” in bringing the capital markets of London and Shanghai together. Stock Connect allows eligible companies listed in each market to issue, on the other exchange, a depositary receipt (DR) that can be traded under local rules in the local time zone. It also represents the first time the Shanghai Stock Exchange will be open to foreign issuers and the first time that a DR will be capable of being converted into an ‘A’ share which is fully fungible.
The LSEs announcement is available here.
Authors: Delphine Currie, Denise Jong and Johnathan Webber
Listing Chinese depositary receipts on Stock Connect
Listing global depositary receipts on Stock Connect
Stock Connect in practice
The first company from either Shanghai or London to list on the Stock Connect was Chinese broker Huatai Securities Co Ltd, which successfully raised US$1.54 through the issue of DRs.
If you have questions or would like additional information on the material covered in this Alert, please contact one of the authors – listed below – or the Reed Smith lawyer with whom you regularly work.
Shanghai-London Stock Connect – a new structural connection between Shanghai and London 27th June 2019