Bank of China sole clearing bank for Shanghai-HK stock connect

Bank of China (BOC), one of the country's big four lenders, was designated by the Hong Kong Securities Clearing Company Limited as the sole clearing bank for the Shanghai-HK stock connect, the bank said Monday in a statement.

Bank of China (Hong Kong) will be the clearing bank in Hong Kong, while the BOC Shanghai bank will serve as the clearing bank on the Chinese mainland, BOC said in the statement.

Earlier in the day, the securities watchdogs of the Chinese mainland and Hong Kong announced in a joint statement that the Shanghai-Hong Kong stock connect will start stock trading on Nov. 17.

The pilot program will enable investors in Hong Kong and the mainland to trade eligible shares listed on the other's market through local securities firms or other brokers.

The pilot program will operate between the Shanghai Stock Exchange, the Stock Exchange of Hong Kong Limited, China Securities Depository and Clearing Corporation Limited and Hong Kong Securities Clearing Company Limited.

According to the pilot program, Hong Kong Securities Clearing Company Limited will be allowed to open a special renminbi bank account at a mainland bank, which will be dedicated to business involving the stock connect.

China Securities Depository and Clearing Corporation Limited will also be allowed a special bank account at a Hong Kong bank to deal with business related to the stock connect.

The Shanghai-Hong Kong stock connect will enhance capital market connectivity between the Chinese mainland and Hong Kong.

It will also promote the internationalization of the Chinese currency, the renminbi (RMB), and development of Hong Kong as an offshore RMB business center, as mainland investors will be able to participate in the Hong Kong stock market using RMB.