The China A Share market is a popular way for global investors to access the growth potential of mainland China’s leading companies. With the introduction of the Stock Connect program, trading in A Shares has become more accessible for international investors. Tiger Brokers facilitates this access by purchasing A Shares on behalf of its clients through the Shanghai Connect and Shenzhen Connect mechanisms, which are designed to link the Hong Kong and mainland Chinese stock exchanges. Below, they’ll explain how Tiger Brokers helps clients trade China A Shares through Stock Connect and the key rules you should know when trading on this platform.
What is Stock Connect?
Stock Connect is a cross-boundary investment channel that connects the Hong Kong Stock Exchange (HKEX) with the Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE). It allows international investors, including those using Tiger Brokers, to trade eligible A Shares listed on mainland Chinese exchanges through the HKEX, without the need for a special domestic account in China.
Tiger Brokers purchases A-share securities for investors through the Shanghai Connect and Shenzhen Connect mechanisms, providing a straightforward way for clients to access mainland China’s stock markets.
Key Trading Rules for A Shares via Stock Connect on Tiger Brokers
When trading China A Shares through Stock Connect, there are specific rules that investors should be aware of. These rules ensure compliance with the Hong Kong Stock Exchange (HKEX) regulations, which govern how foreign investors can trade mainland stocks. Here’s an overview of the main trading rules for A Shares via Stock Connect on Tiger Brokers:
- Eligible Stocks
Only certain A Shares are eligible to be traded through the Stock Connect mechanisms. These include large-cap and mid-cap stocks listed on the Shanghai and Shenzhen exchanges. Additionally, some smaller stocks may also be included in the Connect program if they meet certain liquidity and market cap criteria. You can view the full list of eligible stocks directly on the Tiger Brokers platform.
- Trading Days and Hours
Trading A Shares through Stock Connect follows the trading calendar of the mainland Chinese markets. The markets are open Monday through Friday, excluding public holidays in both Hong Kong and mainland China. The trading hours are as follows:
Morning session: 9:30 AM – 11:30 AM (Beijing Time)
Afternoon session: 1:00 PM – 3:00 PM (Beijing Time)
It’s important to note that orders placed outside these hours will be executed during the next trading session.
- Price Limits
The A Share market in mainland China is subject to daily price fluctuation limits, which restrict how much a stock’s price can increase or decrease in a single trading day. For most stocks, the price limit is 10% from the previous closing price. This rule helps prevent excessive volatility within the market.
Tiger Brokers ensures that all trades placed through its platform comply with these price limits, so your orders will be executed according to mainland China’s stock market regulations.
- Trading Currency
When purchasing A Shares through Stock Connect, all transactions are conducted in Chinese yuan (RMB). Tiger Brokers takes care of currency conversions, ensuring that your funds are properly converted from your base currency (such as HKD or USD) into RMB for seamless trading.
- Order Types
Tiger Brokers offers various order types for trading A Shares through Stock Connect. You can place market orders to buy or sell immediately at the best available price or use limit orders to specify the price at which you’re willing to trade. Orders are submitted to the relevant stock exchange and executed according to exchange regulations.
- Settlement
Stock Connect follows a T+0 settlement cycle, which means that trades are settled on the same day they are executed. However, for investors trading through Tiger Brokers, the actual settlement of funds may follow the T+1 cycle, depending on the currency and banking process. This allows for timely and efficient settlement of your A Share transactions.
Conclusion
The Stock Connect program has revolutionized access to China A Shares, allowing global investors to participate in China’s rapidly growing markets. By using Tiger Brokers, you can trade A Shares efficiently and in accordance with the rules set by the HKEX. Whether you’re looking for exposure to China’s leading companies or seeking new opportunities in emerging sectors, Tiger Brokers provides a platform that simplifies the entire process.
