Stock Connect adopts the "home market principle" as the principal arrangement, which means investors trading via Stock Connect have to observe the trading rules and arrangement of others' market.

Other points to note for Northbound trades:

Investor Protection

The Mainland and Hong Kong regulators will enhance cross-boundary regulatory and enforcement cooperation to protect investors. In addition, since 1 January 2020, the Investor Compensation Fund has extended its coverage to the Shanghai and Shenzhen A-shares traded under the Stock Connect (Northbound trades of A-shares). However, the fund does not cover Southbound trades of Stock Connect.

Investor Identification

On 26 September 2018, the Investor Identification Regime was launched for Northbound trades of A-shares. Individual investors will be assigned a Broker-to-Client Assigned Number (BACN) from their broker for participating in Northbound trades. Each BACN should be mapped to include the full name and ID card number of that investor.

Margin Trading and Covered Short Selling

The practices of margin trading and covered short selling in the Mainland are different from those in Hong Kong.

For margin trading, investors are allowed to trade A-shares on margin via a Hong Kong broker, provided that the relevant requirements of SSE/SZSE are met. Only specified A-shares are eligible for margin trading, and the volume of margin trading for each A-share cannot exceed the prescribed threshold. Find out the list of A-shares eligible for margin trading on the HKEX website.

As for covered short selling, investors are allowed to short sell A-shares via a Hong Kong broker, provided that the front-end monitoring and other SSE/SZSE's relevant requirements are met. Only specified A-shares are eligible for covered short selling, and there is limit on the volume of short selling for each A-share. Find out the list of A-shares eligible for covered short selling on the HKEX website.

Trading suspension

The trading suspension rules and arrangements are different between the Mainland and Hong Kong. Investors can refer to the FAQs for Listed Issuers to learn more about the circumstances under which the trading of Mainland listed companies will be suspended.

For A+H shares, a listed company's A and H shares will be suspended in both markets, if an A+H issuer has any inside or material information or where there is concern about the possible development of a false market. For suspension due to other reasons, trading suspension will not be required in both markets, but to follow the respective home market rules and the listed company's current practice.


Investors trading A-share are required to pay tax on cash dividend at a standard rate of 10%, which will be withheld and paid to the relevant tax authority by the respective listed companies. However, capital gains tax (i.e. the profit from the sale of shares) and business tax (i.e. income from A-shares transaction) are exempted.

May 2023