The China Securities Regulatory Commission ("CSRC") and the UK Financial Conduct Authority ("FCA") have recently made a Joint Announcement (the "Announcement").
The Announcement expressly states that the CSRC and the FCA have decided to approve, in principle, the launch by the Shanghai Stock Exchange ("SSE") and the London Stock Exchange ("LSE") of a new scheme on issuing depository receipts, the Shanghai-London Stock Connect (the "Stock Connect"). The Announcement further states that the Stock Connect will comprise eastbound and westbound limbs, adding that under the eastbound limb, eligible companies listed on the LSE will be able to issue Chinese Depository Receipts (CDRs) to Chinese investors and apply for them to be listed on the SSE's Main Board, and under the westbound limb, eligible companies listed on the SSE will be able to issue Global Depository Receipts (GDRs) to UK and global investors and apply for them to be listed on the LSE's Main Market. In addition, the Announcement notes that, in the initial stage, qualified securities institutions in each of the two markets may conduct cross-border conversion business in relation to CDRs and GDRs. Meanwhile, capital flow under the Shanghai-London Stock Connect will be subject to a maximum cross-border quota, which includes eastbound aggregate quota of CNY 250 billion and westbound aggregate quota of CNY300 billion.