Hong Kong-China stock trading scheme to start November 17

A long awaited plan to connect the Hong Kong and Shanghai stock exchanges will go live on November 17, the Hong Kong bourse and Chinese regulators said in a statement on Monday.

The landmark stock connect project will, for the first time, allow global investors to trade Chinese stocks directly from Hong Kong, while mainland investors will be able to access the Hong Kong equities market.

The launch comes at a time when China is making a big push to widen the use of the yuan, with Canada being singled out at the weekend as the latest trading hub for the currency and the first in the Americas.

"Trading through the Shanghai-Hong Kong Stock Connect will commence on 17 November 2014," the China Securities Regulatory Commission and the Hong Kong Securities and Futures Commission said in a statement.

In the statements on Monday, the Hong Kong bourse and regulators did not clarify whether foreign investors will be subject to a capital gains tax.

The offshore yuan and China's stock index futures rose in early trade on the back of the announcement of the start date of the stock connect project, which China has been trying to get off the ground since 2007.

"This is a historic moment for China's capital market," said Nick Ronalds, managing director and head of equities at the Asia Securities Industry & Financial Markets Association, the Hong Kong-based financial trade group.

The Hong Kong-China stock scheme, a key plank in China's capital market liberalisation, was initially expected to start at the end of October but authorities pressed the pause button on the project at the last minute without giving a clear explanation of what was causing the delay.

Industry participants have said operational issues, including lack of clarity of the tax regime for capital gains made on trades and share ownership issues, were possible reasons for the delay.

Hong Kong's leader Leung Chun-ying signalled last week the Hong Kong pro-democracy civil disobedience campaign that has blocked key roads of the city's financial centre since late September had also played a role in the postponement of the scheme.

Stock exchanges in mainland China have been experiencing a sustained increase in volumes starting from October. 29 as investors positioned themselves for an imminent launch.

"Those in the market should make good use of the time before the official launch to prepare and ensure the smooth development of the Shanghai-Hong Kong stock connect," China's regulator said in a statement.