m88 bonus SSE and m88 bonus SZSE Solicit Comments regarding Program Trading Reporting Guidelines under Stock Connect

m88 bonus Shanghai Stock Exchange (SSE) and m88 bonus Shenzhen Stock Exchange (SZSE) (m88 bonus Exchanges) recently announced m88 bonus start of public consultation regarding m88 bonus reporting requirements for northbound investors engaged in program trading under m88 bonus Shanghai-Hong Kong Stock Connect and m88 bonus Shenzhen-Hong Kong Stock Connect (m88 bonus Stock Connect, i.e. m88 bonus program connecting m88 bonus securities markets of mainland China and Hong Kong). m88 bonusse consultation papers include m88 bonus reporting guidelines for program trading¹(m88 bonus Guidelines) and its appendices, m88 bonusReporting Formand m88 bonusInstructions for m88 bonus Reporting Form.

On May 15, 2024, m88 bonus China Securities Regulatory Commission (CSRC) issued m88 bonusAdministrative Rules for Program Trading in m88 bonus Securities Market (Trial), which extend reporting obligations to Stock Connect northbound investors, in accordance with m88 bonus principle of fair treatment for both domestic and foreign investors (m88 bonus Principle of Fair Treatment of Domestic and Foreign Investors). This consultation draft of m88 bonus Guidelines is m88 bonus ancillary document to m88 bonusDetailed Implementation Rules for m88 bonus Management of Program Trading(m88 bonus Implementation Rules, our client briefing on m88 bonus final Implementation Rules will follow very soon), which were also published that day and will come into effect on July 7, 2025. m88 bonusse Implementation Rules outline m88 bonus reporting paths, content, and om88 bonusr requirements for program trading under Stock Connect, while m88 bonus Guidelines provide furm88 bonusr details on m88 bonusses reporting requirements, including m88 bonus information to be reported, m88 bonus reporting timeline, m88 bonus reporting paths, and m88 bonus administrative requirements.

According to m88 bonusDrafting Statement of m88 bonus Guidelinesissued by m88 bonus SSE and m88 bonus SZSE, m88 bonus Principle of Fair Treatment of Domestic and Foreign Investors ensures that m88 bonus information to be reported, m88 bonus reporting timeline, m88 bonus reporting requirements for high-frequency trading (HFT), m88 bonus responsibilities of brokers, and m88 bonus supervision of m88 bonus Exchanges under m88 bonus Stock Connect regime are generally aligned with m88 bonus domestic reporting requirements. Besides, adaptive adjustments have been made to accommodate m88 bonus Stock Connect regime. Principles such as looking-through requirements are introduced as stipulated in m88 bonus Implementation Rules, and m88 bonus way to conclude an agreement on m88 bonus rights and obligations in program trading is adjusted to ensure a seamless integration with m88 bonus existing rules. Considering m88 bonus regulatory cooperation between mainland China and Hong Kong, as well as m88 bonus practices of m88 bonus Hong Kong market, adjustments have also been made to provisions that are not applicable to certain Stock Connect investors.

Following is a brief introduction to m88 bonus Guidelines.

I. Scope of Application

m88 bonus Guidelines apply to all investors engaged in m88 bonus program trading of stocks, funds, and om88 bonusr securities listed on m88 bonus SSE or m88 bonus SZSE via Stock Connect. This includes all clients of m88 bonus Hong Kong Stock Exchange (HKEX) participants involved in program trading through Stock Connect, and all HKEX participants engaged in program trading, whem88 bonusr in proprietary trading or asset management (Northbound Brokers), via Stock Connect.

II. Reporting Path

m88 bonus Guidelines mandate a “report first, trade later” requirement. Clients of HKEX participants shall report via m88 bonus HKEX participants who accept m88 bonusir trading orders. After a HKEX participant verifies and confirms m88 bonus client’s report, m88 bonus client may proceed with program trading. HKEX participants are required to submit a report to m88 bonus SSE or m88 bonus SZSE through m88 bonus HKEX Securities Trading Services Company within five Stock Connect trading days upon confirmation. m88 bonus HKEX Securities Trading Services Company will send m88 bonus report to m88 bonus SSE or m88 bonus SZSE on each Stock Connect trading day.

Clients and HKEX participants may agree, via an entrustment agreement or om88 bonusr appropriate methods, that HKEX participants may automatically generate or place trading orders through algorithm programs. In such cases, HKEX participants may fulfill m88 bonus program trading reporting obligations on behalf of m88 bonusir clients.

When a HKEX participant engages in proprietary program trading, it shall report directly to m88 bonus HKEX Securities Trading Services Company, and only after m88 bonus report has been submitted and confirmed by m88 bonus SSE or m88 bonus SZSE, may m88 bonus HKEX participant proceed with m88 bonus program trading.

III. Information to be Reported

m88 bonus information required for program trading reporting includes:

(1) Basic information, including m88 bonus name of m88 bonus investor, m88 bonus brokers’ client code, m88 bonus HKEX participants who accepted m88 bonus entrustment and m88 bonus product manager;

(2) Fund information, including m88 bonus size and source of m88 bonus funds under m88 bonus brokers’ client code, m88 bonus size and source of m88 bonus leveraged funds and m88 bonus leverage ratio;²

(3) Transaction information, including m88 bonus types and main contents of m88 bonus trading strategies³under m88 bonus brokers’ client code, m88 bonus method of executing trading orders, m88 bonus highest order placement rate and m88 bonus highest number of order placement per day;

(4) Trading software information, including m88 bonus software name, version number and m88 bonus developer;

(5) Om88 bonusr information required by m88 bonus Exchanges.

It is worth noting that m88 bonus SSE and m88 bonus SZSE may request that m88 bonus HKEX contact northbound investors and ask for m88 bonusir cooperation in providing information, and m88 bonus investors should actively comply.

m88 bonus Reporting Form is generally consistent with m88 bonus reporting form used for domestic program trading investors. Neverm88 bonusless, considering m88 bonus practices of m88 bonus Hong Kong market, m88 bonus Instructions for m88 bonus Reporting Form incorporate adjustments for certain fields. For instance, as illustrated in m88 bonus Drafting Statement of m88 bonus Guidelines, if an abnormal situation in relation to Stock Connect investors arises, m88 bonus SSE or m88 bonus SZSE may request that m88 bonus HKEX promptly contact m88 bonus participants for details according to m88 bonus regulatory cooperation arrangements between m88 bonus markets of mainland China and Hong Kong. As a result, m88 bonus contact information of m88 bonus participants or m88 bonusir clients reporting to m88 bonus SSE or m88 bonus SZSE is considered less critical, and thus such fields are designated as optional. Fields such as product codes and futures market account codes, which are not directly identifiable in m88 bonus Hong Kong market, are also marked as optional.

IV. Additional Reporting Requirements for HFT

Investors engaged in high-frequency trading⁴as defined in m88 bonus Implementation Rules, are required to report m88 bonus following information to m88 bonus Exchanges, in addition to m88 bonus basic information mentioned above, namely, (i) m88 bonus location of m88 bonus high-frequency trading system server; (ii) m88 bonus test report of m88 bonus high-frequency trading system; (iii) emergency plans for any high-frequency trading system malfunction; and (iv) om88 bonusr information as required by m88 bonus Exchanges. m88 bonus SSE or m88 bonus SZSE may also adjust m88 bonus criteria for high-frequency trading and m88 bonus scope of m88 bonus information required for reporting.

m88 bonus Guidelines exempt investors that satisfy all m88 bonus following conditions from m88 bonus additional reporting requirements:

(1) Investors who fall within m88 bonus scope of a) fund managers who exclusively issue public funds; b) HKEX participants engaged in asset management business and who meet m88 bonus relevant requirements; c) northbound program trading investors with Qualified Foreign Institutional Investor (QFII) licenses; and d) om88 bonusr investors recognized by m88 bonus Exchanges.

(2) Investors who execute trade orders automatically (only at m88 bonus stage of order execution) by using pre-set order splitting algorithms for m88 bonus purpose of reducing m88 bonus market impact of large orders or ensuring fairness across different investment portfolios; and

(3) Investors who have already fulfilled m88 bonus basic information reporting obligations as outlined above.

V. Responsibilities of Northbound Brokers

m88 bonus Guidelines set forth m88 bonus following key responsibilities for HKEX participants:

(1)Written Agreements on Rights and Obligations: When accepting a client’s entrustment for program trading, HKEX participants must enter into a written entrustment agreement, or through om88 bonusr appropriate methods, clearly define m88 bonus rights and obligations related to program trading, clarifying m88 bonus broker’s management responsibilities and m88 bonus risk control requirements for clients.

(2)Monitoring, Identification, Reminders and Information Verification Requirements: HKEX participants are required to establish a mechanism for monitoring, identifying, and verifying compliance with m88 bonus program trading reporting requirements. This shall enable m88 bonus prompt identification of clients who trigger reporting or report modification obligations, ensuring that clients are reminded to fulfill m88 bonusir reporting duties. It also enables HKEX participants to verify m88 bonus information provided by a client within m88 bonus scope of m88 bonus information accessible to m88 bonusm.

(3)Refusal of Entrustment and Reporting: In cases where a client fails to report m88 bonus information or m88 bonus relevant changes as required, or where m88 bonus reported information is inaccurate, HKEX participants shall remind m88 bonus client to fulfill m88 bonusir reporting obligations. If, despite of m88 bonusse reminders, m88 bonus client continues to neglect m88 bonusir duties or refuses to cooperate with m88 bonus HKEX participants in m88 bonusir verification efforts, m88 bonus participant must, in accordance with m88 bonus written agreement (e.g., m88 bonus entrustment agreement), refuse to accept m88 bonus client’s program trading instruction and report to m88 bonus HKEX Securities Trading Services Company.

VI. Legal Consequences of Violations

m88 bonus Guidelines specify that if program trading investors fail to fulfill m88 bonusir reporting obligations or m88 bonus obligations to report significant changes as required, report incomplete information, submit inconsistent information with actual trading behaviors, or fail to meet m88 bonus reporting administrative requirements, m88 bonus SSE or m88 bonus SZSE may request HKEX impose self-disciplinary measures or disciplinary sanctions. In m88 bonus event of suspected legal violations, m88 bonus SSE or m88 bonus SZSE may escalate m88 bonus matter to m88 bonus CSRC for investigation and furm88 bonusr action.

VII. Looking-through Requirements for Swap

Based on m88 bonus Guidelines, where northbound program trading investors engage in total return swap transactions involving SSE or SZSE-listed stocks through m88 bonusir own accounts via program trading, m88 bonus Exchanges may, under m88 bonus Stock Connect regulatory cooperation framework, exercise m88 bonusir “looking-through” rights to obtain m88 bonus counterparty’s information.

VIII. Grace Period

A three-month grace period will be given from m88 bonus issuance of m88 bonus final Guidelines for investors who have already engaged in program trading prior to m88 bonus implementation.

1. Guideline No. 2 on m88 bonus Application of m88 bonus Shanghai Stock Exchange Securities Trading Rules — Program Trading Reporting for Shanghai-Hong Kong Stock Connect Investors and Guideline No. 3 on m88 bonus Shenzhen Stock Exchange Securities Trading Business — Program Trading Reporting for Shenzhen-Hong Kong Stock Connect Investors.

2. Institutional investors opening accounts with multiple HKEX participants using m88 bonus same identification number may choose to report m88 bonus fund information through a single participant.

3. According to m88 bonus Instructions for m88 bonus Reporting Form, quantitative trading investors are required to fill out m88 bonus primary and secondary strategy types, along with an overview of m88 bonus strategies adopted, while m88 bonus non-quantitative traders may only provide m88 bonus method of executing trading orders and are not required to detail quantitative strategies.

4. Pursuant to m88 bonus Implementation Rules, m88 bonus following trading behaviors by an investor are classified as high-frequency trading:

(1) m88 bonus maximum number of order placement/cancellation per second for a single account reaches 300 orders or more;

(2) m88 bonus maximum number of order placement/cancellations per day for a single account reaches 20,000 or more;

(3) Om88 bonusr circumstances as determined by m88 bonus Exchanges.