The China Securities Regulatory Commission ("CSRC") has recently drafted and issued the Interim Provisions for Securities and Funds Operators to Use Securities Investment Consulting Services from Hong Kong Institutions (Draft for Comment) (the "Draft for Comment") for public consultation by May 21, 2018.
In 19 articles, the Draft for Comment provides for the business models, institutions' qualifications, business norms, regulatory mechanism and so forth. Further, the Draft for Comment expressly states that mainland-based securities companies or their subsidiaries that engage in publishing securities research reports, are allowed to forward securities research reports, published by Hong Kong institutions with investment analysis and opinions on stocks under the Southbound Hong Kong Trading Link, to their clients; also, domestic securities and funds operators are permitted to entrust Hong Kong-based institutions to offer investment consulting services in respect of stocks under the Southbound Hong Kong Trading Link, for the securities investment funds managed by securities and funds operators and involved in the trading under the Southbound Hong Kong Trading Link. Furthermore, the Draft for Comment makes clear qualifications of eligible institutions in terms of business licenses and working experience, and specifies their obligations and duties correspondingly.