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Wednesday, November 23, 2016, 09:31

Mainland-HK capital market connectivity mechanism unveiled

By Xinhua
Mainland-HK capital market connectivity mechanism unveiled
Financial analysts in Hong Kong reckon that the Shenzhen-Hong Kong Stock Connect, which will likely be launched in December, will facilitate larger and more balanced cross-border renminbi fund flows. (Photo / VCG)

BEIJING - The central bank on Tuesday announced a capital market connectivity mechanism between the Chinese mainland and Hong Kong .

The central bank announced a capital market connectivity mechanism between the Chinese mainland and Hong Kong

Hong Kong Securities Clearing Co. Ltd. is allowed to open a special renminbi bank account with a mainland bank, which will deal with businesses on the Shanghai Stock Exchange and Shenzhen Stock Exchange, according to a circular jointly released by the People's Bank of China (PBOC) and the China Securities Regulatory Commission (CSRC).

China Securities Depository and Clearing Co. Ltd. is also allowed a special bank account at a Hong Kong bank to deal with the Hong Kong Stock Exchange, said the circular.

The two banks should abide by the law to carry out obligations of anti-money laundering, anti-terrorist financing and anti-tax evasion, according to the circular.

The mechanism aims to facilitate capital market connectivity between the Chinese mainland and Hong Kong and standardize cash flow, said the circular.

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