China-Switzerland Stock Connect: Enhancing Access to Capital And Opportunity

Last week the China-Switzerland Stock Connect offering was launched and got off to a flying start with four Chinese companies listing their first GDRs on SIX Swiss Exchange. What were your impressions?

The 28^th of July 2022 was a truly historic day in many respects. It included the official launch celebrations in the morning, with the participation of senior government representatives from China and Switzerland and the signing of supplementary MoUs between the three exchanges – Shanghai Stock Exchange, Shenzhen Stock Exchange and SIX Swiss Exchange.

Add to this the unprecedented quadruple listings of GDRs by GEM, Gotion High-tech, Keda Industrial Group and Ningbo Shanshan in the afternoon and we have the recipe for an invigorating spirit of cooperation and mutual enthusiasm about developing capital markets.

What has led to this historic moment?

This China-Switzerland Stock Connect approach underpins the long and close relationship between China and Switzerland and the friendly collaboration between the Chinese and Swiss exchanges that has grown over the past few years. Initial MoUs were signed back in 2015 and were renewed in 2019.

From a regulatory perspective, the China Securities Regulatory Commission (CSRC) published revised Stock Connect Rules in February this year, followed by adaptations of the SIX Listing Rules that were approved by FINMA in July. In parallel, SIX Swiss Exchange introduced a new trading segment dedicated to GDRs.

What does this now mean for companies and investors?

China-Switzerland Stock Connect opens up new opportunities for all of them. China is the world’s second-largest economy and Switzerland’s third biggest trading partner. It has been continuously opening up the capital market, and the launch of the Stock Connect program is a very significant step forward, emphasizing that it’s open for business. Given our position at the heart of Europe, I think the Swiss market is uniquely placed to offer Chinese firms access to funding here. The first four listings have been a great start, and I’m looking forward to further listings in the future.

At the same time, investors can turn to the Swiss stock exchange for opportunities to get direct exposure to Chinese securities in a familiar and secure regulatory environment. On SIX Swiss Exchange, 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. So our segment is competitive with other financial centers without compromising on investor protection.

• SIX Officially Launches the Swiss GDRs-leg of the China-Switzerland Stock Connect Together With Shanghai and Shenzhen Stock Exchanges
• China-Switzerland Stock Connect Gets Off to a Flying Start with Four Chinese Companies Listing Their First GDRs on SIX Swiss Exchange
• Product page: China-Switzerland Stock Connect