The Shanghai Stock Exchange ("SSE") has recently issued four business rules, including the Interim Measures for the Listing and Trading of Depository Receipts under the Connectivity Mechanism between the Shanghai Stock Exchange and the London Stock Exchange (Draft for Comment) (the "Draft"), and meanwhile, the China Securities Depository and Clearing Corporation Limited ("CSDC") has issued the Implementing Rules on the Registration and Clearing Business for Depository Receipts under the Connectivity Mechanism between the Shanghai Stock Exchange and the London Stock Exchange (for Trial Implementation) (Draft for Comment). Comments on all these business rules are invited from the public and all market participants by October 19, 2018.
The 104 articles of the Draft are organized into seven chapters: "General Provisions", "Listing of Chinese Depositary Receipts (CDRs)", "Continuous Information Disclosure for CDRs", "Trading of CDRs", "Matters Related to Global Depository Receipts", "Self-Regulation" and "Supplementary Provisions". In terms of the detailed system designs, the Draft sets out targeted arrangements stating that, for example, a pre-approval system will be implemented for the listing of CDRs which are to be traded by a hybrid approach combining the auction trading and the market maker regimes, and that the lower and upper price limits may be relaxed appropriately under special circumstances.