China and Hong Kong’s Regulators Sign MoU on Cross-Border Shares Listing

Bloomberg

The China Securities Regulatory Commission (CSRC) and the Hong Kong Securities and Futures Commission (SFC) have entered into a Memorandum of Understanding (MoU) that seeks to strengthen their cross-border regulatory efforts in securities offering and listing by domestic companies in both countries.

SFC announced the cooperation on Friday in a joint statement published on its website. According to the Hong Kong securities regulator, the MoU outlines the methods and procedures for the issuing and listing of shares in both countries. The memorandum also provides clarifications on how both regulators will go about a joint cross-border enforcement and information exchange. In addition, the agreement explains how financial intermediaries in both countries are to be supervised.

“The MoU will facilitate the CSRC and the SFC in discharging their supervisory functions, jointly combating cross-boundary offences and misconduct, safeguarding the legitimate interests of investors and ensuring the steady and healthy development of both markets,” the regulator explained in the joint statement.

China Crackdowns on Cross-Border Online Brokers

Meanwhile, the signing of the agreement comes days after Hong Kong-based brokerages started suspending clients' accounts from mainland China in order to comply with Chinas ban on international brokers that are offering services without a local license. Both Hong Kong-listed Bright Smart Securities and the Hong Kong unit of Chinese broker Guotai Junan Securities, issued notices on the account suspension although the latter later withdrew the notice from the public domain.