17 SEPTEMBER 2019

FIX Trading Community releases implementation guide for Shanghai Hong Kong Stock Connect Project

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FIX Trading Community, the non-profit, industry-driven standards body at the heart of global financial trading, today announced the publication of an industry Implementation Guide for the Shanghai-Hong Kong Stock Connect project.

The Shanghai-Hong Kong Stock Connect project will allow global investors to trade Shanghai ‘A’ shares via the Hong Kong Stock Exchange while Chinese mainland investors will be able to trade Hong Kong ‘H’ shares via the Shanghai Stock Exchange for the first time.

In an effort to standardise implementation and educate on “early practices” and later “best practices” by participating firms, the Implementation Guide provides a number of suggested tags and their usages which are set out to provide the industry with a basis for messaging standardisation, relating them to the requirement to help understanding of the origination of the workflow. As this programme continues to develop, the FIX Trading Community will look to support the buy-side, sell-side and their vendors with constructive suggestions on how to implement the various regulatory requirements.

The guide has been developed by FIX Trading Community, in partnership with ASIFMA, representing the culmination of a series of working groups of sell-side, buy-side, vendors, and other market participants. Core market structure, risk checks, quota restrictions and technical implementation, across buy-sides, sell-sides and the vendor community were all considered.

Jessica Morrison, Head of APAC Market Structure, Deutsche Bank and Asia Pacific Exchange and Regulatory Subcommittee Co-Chair, FIX Trading Community commented, “The FIX Trading Community have produced these guidelines to give the industry some practical suggestions on how to communicate Shanghai-Hong Kong Stock Connect orders. We believe that standardisation will help bring efficiency to the market, reduce complexity and therefore help the buy-side, sell-side and vendors manage cost and operational risk. We hope market participants find it helps them participate in this historic opening of the China market."

Michael Drake, Asia Regional Director, REDI Technologies and Asia Pacific Education & Marketing Co-Chair, FIX Trading Community added, “Once again, we have seen a great amount of support and collaboration from FIX member firms, neighboring industry groups, and market participants when presented with a new opportunity, in this case the Shanghai-Hong Kong Stock Connect. The participation leading up to the launch has been incredibly strong, and the continued collaboration will be invaluable as we share this initial blueprint, refine it going forward, and potentially leverage it in future cross-market initiatives.”

To access the Implementation Guide, please click here.