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 16 December 2024. 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 |