BNP Paribas Launches Broker-Custodian Solution for Shanghai-Hong Kong Link

BNP Paribas will offer an integrated broker-custodian solution to help investors and asset managers connect to the mutual market access link between Shanghai and Hong Kong.

The French bank will as both the custodian and the broker to allow its clients to meet the trading requirements set out in the programme, and invest in Mainland China.

“This solution will cover the entire trade lifecycle from pre-trade checks and execution to clearing and settlement,” says Lawrence Au, head of BNP Securities Services, Asia Pacific.

With Stock Connect, the Northbound quota will allow Hong Kong and foreign investors to use offshore RMB to invest directly into A-shares. However, certain operational challenges have arisen due to the differences in trading rules and technology between the two exchanges.

BNP Paribas hopes to overcome these challenges by acting as both the broker and custodian to stocks transacted on the Shanghai-Hong Kong link.

“BNP Paribas will not only be able to offer seamless solutions for cash investors, but will also offer synthetic access such as Delta one products from day one,” adds Hugo Leung, deputy CEO, BNP Paribas Securities (Asia).

“This is particularly interesting for those who are not ready to trade stocks and those that prefer to trade synthetic products.”

The link is expected to go live sometime this month.