Since signing the Memoranda of Understanding (MoU) in 2019, SIX has been working closely with the Shanghai and Shenzhen Stock Exchanges to establish a Stock Connect offering that is equally accessible for Chinese and Swiss market participants.
Stock Connect, which provides a cross-listing framework between Chinese and Swiss exchanges, allows companies from each market to access investor pools in the other market and raise capital by issuing and listing GDRs on SIX Swiss Exchange and Chinese Depository Receipts on the Chinese exchanges.
Stock Connect is another important step for the Chinese financial sector in opening up and bringing the capital markets of China and Switzerland even closer together. At the same time, it will offer new attractive opportunities to investors as well as companies in both countries.
Today’s event celebrated the establishment of the regulatory framework to list GDRs of companies listed on the Shanghai or Shenzhen stock exchange on SIX Swiss Exchange (Swiss-leg of the China-Switzerland Stock Connect GDR listing). The event took place in a hybrid setting with participation of the China Securities Regulatory Commission (CSRC) Vice-Chairman Fang Xinghai and the Swiss State Secretary Daniela Stoffel, Chinese Ambassador to Switzerland, Wang Shihting, Thomas Zeeb, Global Head Exchanges and Member of the Executive Board of SIX and his counterparts Cai Jianchun, President of Shanghai Stock Exchange and Sha Yan, CEO and President of Shenzhen Stock Exchange.
Jos Dijsselhof, CEO SIX: “SIX continuously strives to expand and improve its range of international products and services. With the introduction of GDRs, we are excited to be able to broaden the options for companies to raise capital in the very international Swiss financial market. We can now offer further investment opportunities to investors looking to get direct exposure to Chinese securities in a familiar and secure regulatory environment.”
As part of the event, several supplementary MoUs were signed between the three exchanges to further deepen the relationship and to also ensure stronger collaboration and support.
Today at 3.00 pm, four Chinese companies are intending to celebrate the listing of their GDRs on SIX Swiss Exchange. Keda Industrial Group Co., Ltd., GEM Co., Ltd., Gotion High-tech Co., Ltd. and Ningbo Shanshan Co., Ltd., four companies active in clean energy technologies and battery recycling, expect to start trading in the newly established GDR trading segment on SIX Swiss Exchange.
Regulatory specifications
Based on the revised Stock Connect Rules published by CSRC in February this year, the revision of the SIX Listing Rules was necessary in order to comply with current market standards and respective requirements. The revised SIX Listing Rules were approved by FINMA and entered into force on 25 July 2022.
With these revised SIX Listing Rules, SIX provides an alternative listing segment that is competitive with other financial centers, and at the same time, does not allow for less stringent obligations that could prove negative from an investor protection point of view. This means that issuers of GDRs have to fulfil similar transparency requirements as other primary listed equity securities such as ad hoc publicity obligations, (interim) financial reporting and disclosure of management transactions, yet GDRs are not deemed to be primary listed in the sense of the Financial Market Infrastructure Ordinance (for more details in respect of the amended Listing Rules, please refer to Regulatory Board Communiqué No. 4/2022.
New GDR trading segment
Along with the revision of the SIX Listing Rules for GDRs, SIX Swiss Exchange introduced a new trading segment that is dedicated to GDRs and has similar functionalities as already existing equity trading segments. While the technical configurations have already been implemented, the GDR trading segment – including all revised provisions – entered into force on 25 July 2022 (please refer to SIX Swiss Exchange message no. 22/2022).
Trading hours of GDRs are as follow (CET): Opening auction begins at 3.00 p.m. CET, continuous trading is until 5.20 p.m. CET, closing auction and “TAL” (Trading-at-Last) goes on until 5.40 p.m. CET.
This new China-Switzerland Stock Connect approach underpins the long and close relationship between China and Switzerland and the friendly collaboration between Chinese exchanges and SIX that has grown over the past few years.
For further information on GDRs, please visit China-Switzerland Stock Connect Site