Under Shanghai Connect, SSE Securities that are eligible for trading by investors include all the constituent stocks of the SSE 180 Index and the SSE 380 Index, and all the SSE-listed A shares that are not included as constituent stocks of the relevant indices but which have corresponding H shares listed on SEHK, except the following:
(a) SSE-listed shares which are not traded in RMB; and
(b) SSE-listed shares which are under risk alert.

Under Shenzhen Connect, SZSE Securities that are eligible for trading by Hong Kong and overseas investors include all the constituent stocks of the SZSE Component Index and the SZSE Small/Mid Cap Innovation Index which have a market capitalization of not less than RMB 6 billion, and all the SZSE-listed A shares which have corresponding H shares listed on SEHK, except the following:
(a) SZSE-listed shares which are not traded in RMB; and
(b) SZSE-listed shares which are under risk alert or under delisting arrangement.

For the list of eligible stocks, please refer to HKEX's website at
http://www.hkex.com.hk

At the initial stage of Shenzhen Connect, investors eligible to trade shares that are listed on the ChiNext Board of SZSE under Northbound trading will be limited to institutional professional investors. In this connection, the bank will not provide the trading service of such stocks.

Stocks are settled on trade date ("T") day while money is settled on T +1 day.
The settlement currency is RMB.

Northbound trading will be available only when both markets are opened for trading and banking services are available in both markets on the corresponding money settlement days.

The follow table illustrates the arrangement for Northbound trading.

^*Since Day-3 is Hong Kong holiday, no settlement service will be provided. Therefore, Northbound trading will not be available on Day-2.

If a Northbound trading day is a half trading day in Hong Kong market, Northbound Trading will continue until SSE/SZSE market is closed.

Northbound trading follows SSE's and SZSE's trading hours. However, SEHK will accept Northbound orders from SEHK Participants five minutes before the Mainland market sessions open in the morning and in the afternoon.

• 09:20 – 09:25; 14:57 - 15:00: SSE & SZSE will not accept order cancellation
• 09:10 – 09:15; 09:25 – 09:30; 12:55 – 13:00: Orders and order cancellations can be accepted by SEHK but will not be processed by SSE nor SZSE until their market open
• Any buy or sell orders not executed during the opening call auction session will automatically enter the continuous auction session. Any buy or sell orders not executed during the continuous auction session will automatically enter the closing call auction session.

In respect of SSE regulations, investors have to make sure that they have sufficient shares in their accounts before selling. Hence, investors must have sufficient shares in their accounts on T-1 if they want to sell their shares on T.

During Opening Call Auction, the current bid (or previous closing price in the absence of the current bid) will be used for checking. During Closing Call Auction of SZSE, the current bid (or last traded price in the absence of the current bid) will be used for checking. Dynamic price checking will be applied throughout the trading day, from the 5-minute input period before the start of Opening Call Auction until the end of the afternoon Continuous Auction (until the end of the Closing Call Auction for SZSE). SEHK has set the dynamic price checking at 3% during the initial phase and may be adjusted from time to time subject to market conditions.

According to the Law of the PRC on Securities, when an investor holds or controls up to 5% of the issued shares of a Mainland listed company, the investor is required to report in writing to the CSRC and the relevant exchange, and inform the listed company within three working days. The investor is not allowed to continue purchasing or selling shares in that listed company during those three days.

For such investor, every time a change in his shareholding reaches 5%, he is required to make disclosure (in the same manner as mentioned above) within three working days. From the day the disclosure obligation arises to two working days after the disclosure is made, the investor may not buy or sell the shares in the relevant Mainland listed company.

If a change in shareholding of the investor is less than 5% but results in the shares held or controlled by him falling below 5% of the relevant Mainland listed company, the investor is required to disclose the information within three working days.

Under current PRC rules, a single foreign investor's shareholding in a listed company (regardless of the channels through which shares in such listed company are held, including through QFII, RQFII and Shanghai and Shenzhen Connect) is not allowed to exceed 10% of the company's total issued shares, while all foreign investors' shareholding in the A shares of a listed company is not allowed to exceed 30% of its total issued shares.

• When the aggregate foreign shareholding of an individual A share reaches 26%, SSE or SZSE, as the case may be, will publish a notice on its website:
  SSE: http://www.sse.com.cn/disclosure/diclosure/qfii
  SZSE: http://www.szse.cn/disclosure/deal/qfii/index.html
• If the aggregate foreign shareholding exceeds the 30% threshold, the foreign investors concerned will be requested to sell the shares on a last-in-first-out basis within five trading days.
• SSE Securities purchased through Shanghai Connect and SZSE Securities purchased through Shenzhen Connect will be considered in totality with those purchased by QFII and RQFII, and subject to the same foreign shareholding restriction.
• Once SSE/SZSE informs SEHK that the aggregate foreign shareholding of an SSE/SZSE Security reaches 28%, further Northbound buy orders in that SSE/SZSE Security will not be allowed, until the aggregate foreign shareholding of that SSE/SZSE Security is sold down to 26%.
• If the 30% threshold is exceeded due to Shanghai Connect or Shenzhen Connect, HKEX will identify the relevant SEHK Participant and require it to follow the forced-sale requirements.
• HKEX will publish a notification on its website to inform the market about suspension of buy orders if the shareholding limit goes beyond 28% and about the resumption of buy orders if the shareholding drops below 26%.

Fees and levies related to Northbound trades under Shanghai-Hong Kong / Shenzhen-Hong Kong Stock Connect are as follows:

All the above fees and levies will be collected from CCASS Participants' designated bank accounts at day-end of T day.

Customer should note that certain existing CCASS fees still apply, including stock settlement fee for settlement instructions and money settlement fee. HKSCC also imposes a Portfolio Fee on its CCASS Participants for providing depository and nominee services for their SSE Securities and SZSE Securities held in CCASS. The Portfolio Fee will be collected in HKD on a monthly basis based on a single portfolio of SSE Securities and SZSE Securities of each CCASS Participant. The relevant fee arrangement may change subject to SFC's approval.

Besides, taxes imposed by the State Administration of Taxation (SAT), including stamp duty and dividend tax will also be applied to the Northbound trades and SSE Securities acquired through Shanghai Connect as well as SZSE Securities acquired through Shenzhen Connect. Any additional tax imposed by the SAT, if applicable, will be subject to further clarification with the SAT.

Dividend tax will be withheld by issuers of Connect Securities and ChinaClear upon dividend payment.

The following is an overview of some of the major risks related to Shanghai-Hong Kong Stock Connect / Shenzhen-Hong Kong Stock Connect (Information excerpted from the website of Investor Education Center - "The Chin Family")