Market Link Guide - Hong Kong - China Connect securities
Key Features
CSD link as defined under CSDRa | Yes |
Type of link | Indirect via Citibank N.A. (Hong Kong Branch) to:
|
a. CSD Regulation (EU) No 909/2014, Article 2(29).
| CSDs | Custodian |
Name | Hong Kong Securities Clearing Company Ltd (HKSCC) / Hong Kong Monetary Authority (HKMA) | Citibank, N.A. Hong Kong branch |
FATCA GIIN | HKSCC: 7ENI1T.00000.LE.344 HKMA: not available | NXUTG8.00175.ME.344 |
LEI | HKSCC: 213800NM8ZN1F16ARD34 HKMA: not available | E57ODZWZ7FF32TWEFA76 |
Country of incorporation | Hong Kong | USA |
Account type | HKSCC: Omnibus account HKMA: Segregated account | Segregated account |
Legal account name/holder | HKSCC: securities are registered in the name of HKSCC Nominees Limited. HKMA: securities are in the name of CMU member (that is, Citibank, N.A. Hong Kong branch). Citibank N.A. Hong Kong branch as the participant in HKSCC and HKMA holds a segregated account(s) for CBL at either CSD. | Segregated: |
China A-shares and ETFs via Stock Connect
Key services | Yes/No | Remarks |
Settlement free of payment | Yes | Please refer to specific settlement rules / settlement restrictions under Settlement services. |
Settlement against payment | Yes | Eligible settlement currency: Chinese Renminbi (RMB). |
| Settlement against payment in central bank money account of CBL/CBL customer | No | Against payment settlement in RMB takes place in the HKMA payment system on the cash account of Citibank Hong Kong acting as the clearing party. |
Bridge settlement | No | |
Shaping facility | No | |
Partial settlement | No | Not market practice but is permissible with special arrangements. |
Settlement penalty fees | Yes | Please refer to Settlement Process. |
Pre-matching | Yes | Only on Settlement Date. Occurs upon receipt of customers’ instructions and is subject to counterparty availability. |
Back-to-back processing | No | |
Allegements | Yes | |
Automatic compensation | No | |
Registered securities | Yes | |
Multi Market Securities | No | |
Lending and borrowing | No | |
Proxy voting | Yes | |
Investment Funds | No | |
Liquidity Hub Connect | No | |
Sale and purchase of rights | No | |
Repo services | No | |
Market restrictions | Yes | Please refer to Investment regulation. |
FTT | Yes | Stamp duty incurred. |
Daily reconciliation | Yes |
Moment of entry of instructions | The CSD rules do not define the moment of entry within the meaning of the Settlement Finality Directive. |
| Irrevocability of instructions | Settled transactions are irrevocable. |
| Finality of instructions | Settlement in the Hong Kong market is final upon settlement in the books of HKSCC. |
China Bonds via Bond Connect
Key services | Yes/No | Remarks |
Settlement free of payment | No | Please refer to specific settlement rules/settlement restriction under Settlement services. |
Settlement against payment | Yes | Eligible settlement currency: Chinese Renminbi (RMB). |
| Settlement against payment in central bank money account of CBL/CBL customer | No | Against payment settlement in RMB takes place in the HKMA payment system on the cash account of Citibank Hong Kong acting as the clearing party. |
Bridge settlement | No | |
Shaping facility | No | |
Partial settlement | No | |
Settlement penalty fees | Yes | Please refer to Settlement Process. |
Pre-matching | Yes | Only on Settlement Date. Occurs upon receipt of customers’ instructions and is subject to counterparty availability. |
Back-to-back processing | No | |
Allegements | No | |
Automatic compensation | No | |
Registered securities | Yes | |
Multi Market Securities | No | |
Lending and borrowing | No | |
Proxy voting | No | |
Investment Funds | No | |
Liquidity Hub Connect | No | |
Sale and purchase of rights | No | |
Repo services | No | |
Market restrictions | Yes | Please refer to Investment regulation. |
FTT | No | |
| Daily reconciliation | Yes |
| Moment of entry of instructions | The CSD rules do not define the moment of entry within the meaning of the Settlement Finality Directive. |
| Irrevocability of instructions | Settled transactions are irrevocable. |
| Finality of instructions | Settlement in the Hong Kong market is final upon settlement in the books of HKMA. |
Legal arrangements
The below section is based on the legal opinion obtained by CBL that was issued on 4 October 2023. The information is provided for guidance only and should not be considered in isolation or as constituting a complete or definitive legal advice on any specific matter.
Custodian | |
No insolvency proceedings against the custodian | Confirmed |
Custodian liability for negligence | Confirmed |
Book-entry regime with in rem rights | Confirmed |
Recognition of nominee concept | Confirmed |
No right of retention to the custodian | Confirmed |
Segregation of assets at the custodian | Confirmed |
No right of use | Confirmed |
No upper-tier attachments | Local law does not prohibit upper tier attachment. |
Insolvency of the custodian with no impact on CBL's rights | Confirmed |
Shortfall pro-rated among holders | Local law does not specifically address shortfall issues but a shortfall shall be borne on a pro rata basis by all the relevant account holders. Local court may however implement a different allocation approach (for example, "first in, first out" approach). |
| Record keeping period of at least 10 years | There is no general requirement under local law for Custodian to maintain records of services or activities with respect to its custody business for a period of at least 10 years. A retention period of records for a period of at least seven years was agreed with the Custodian. |
Settlement finality in case of insolvency | Confirmed |