Citi Announces Readiness for Stock Connect

Citi has announced it will be ready to participate in the Shanghai-Hong Kong Stock Connect program when it goes live after completing the migration to third-party clearing.

According to a statement from the bank, the solution from Citi Markets and Securities Services will alleviate institutional investors from the pre-delivery requirement for securities, and will be ready to deliver on Stock Connect for institutional investors from day one.

“One of the widely-reported limitations of the Stock Connect program has been the need to pre-deliver securities, which restricts the ease of investors to trade stocks. Citi has developed a solution to this challenge so investors can focus on their trading decisions,” says Cindy Chen, Hong Kong head of securities services, Citi.

The platform from Citi combines execution, brokerage, custody and clearing, as it looks to serve all types of institutional and retail investors wanting access to trade China’s A-shares.

The announcement of Citi’s platform comes after rival custodian bank, BNP Paribas Securities Services, said it will combine its brokerage and custodian units in the region to allow investors and asset managers to connect to the mutual market access program.

Earlier this week, Citi and BNP Paribas, along with five other banks, were granted primary liquidity providers for the offshore Chinese currency (renminbi) market (CNH), in Hong Kong.

The banks will provide market making activities in Hong Kong for various CNH instruments and will use the Hong Kong platform in promoting their global offshore renminbi instruments.

Banks and investors eagerly await the launch of the Stock Connect program, which has still has not been given an official launch date due to delays over certain post-trade issues.

The venture is arguably one of the most anticipated developments of this year, marking a big step towards integrating China’s domestic market with the rest of the global financial system.