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Hong Kong, Chinese regulators to enhance information exchange for trades

Hong Kong and Chinese regulators are working on a new framework for information exchange between the two markets which would give regulators access to real-time line of sight into cross-market trades.

Ashley Alder, the CEO of Hong Kong's Securities and Futures Commission, said in an Oct. 10 speech that the SFC and its counterpart, the China Securities Regulatory Commission, are working on a new comprehensive framework for information exchange, to manage the interaction between the China and Hong Kong markets.

"The SFC and CSRC are therefore working on a new system for stock connect which would give both regulators direct, real-time line of sight into cross-market trades at the client level," Alder said. The new system is expected to begin around the middle of 2018.

Currently, the SFC cannot ask local brokers to identify trades made through the stock connect by traders in China since these trades are routed through brokers in China. This is different in China where each investor has a unique identification code which allows the CSRC to monitor their trades in real-time.