HONGKONG (Reuters) – China’s securities regulator on Friday published rules for the long-awaited cross-border stock connect scheme between Shanghai and London as deregulation is stepped up, with no sign that an escalating trade war with the United States will slow the pace.
Unlike the stock connect scheme linking Shanghai and Hong Kong, which allows investors to buy overseas stocks directly, the Shanghai-London connect only allows investors to buy foreign stocks indirectly, in the form of depository receipts (DRs).
Chinese companies can raise fresh funds by issuing Global Depository Receipts in London. However, London-listed firms can initially only issue China Depository Receipts backed by existing shares, ruling out fund-raising via Shanghai listings.
(Reporting by Hong Kong newsroom; Editing by Clarence Fernandez)