BOC chosen as clearing bank

Bank of China (BOC), one of the country's Big Four lenders, was designated by the Hong Kong Securities Clearing Company Ltd as the sole clearing bank for the Shanghai-Hong Kong Stock Connect plan, the bank said in a statement later on Monday.

Bank of China (Hong Kong) will be the clearing bank in Hong Kong, while the BOC Shanghai unit will serve as the clearing bank in the 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 would start trading on November 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 Ltd, China Securities Depository and Clearing Corporation Ltd and Hong Kong Securities Clearing Company Ltd.

According to the pilot plan, Hong Kong Securities Clearing Company Ltd will be allowed to open a special yuan bank account in a mainland bank, which will be dedicated to business involving the stock connect plan.

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

The Shanghai-Hong Kong Stock Connect is expected to enhance capital market connectivity between the mainland and Hong Kong.

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