SIX launches Swiss GDRs-leg of China-Switzerland Stock Connect
Today, SIX officially launched the Swiss GDR-leg of the China-Switzerland Stock Connect with the participation of senior government representatives from China and Switzerland.
The first Chinese companies aim to list their Global Depository Receipts GDRs this afternoon and trading is expected to start in the newly established GDR trading segment on SIX Swiss Exchange at 3 pm today.
Since signing the Memoranda of Understanding (MoU) in 2019, SIX has been working closely with the Shanghai and Shenzhen Stock Exchanges to establish a Stock Connect offering that is equally accessible for Chinese and Swiss market participants.
Stock Connect, which provides a cross-listing framework between Chinese and Swiss exchanges, allows companies from each market to access investor pools in the other market and raise capital by issuing and listing GDRs on SIX Swiss Exchange and Chinese Depository Receipts on the Chinese exchanges.
Stock Connect is another important step for the Chinese financial sector in opening up bringing the capital markets of China and Switzerland even closer together. At the same time, it will offer new attractive opportunities to investors as well as companies in both countries.
Based on the revised Stock Connect Rules published by CSRC in February this year, the revision of the SIX Listing Rules was necessary in order to comply with current market standards and respective requirements. The revised SIX Listing Rules were approved by FINMA and entered into force on 25 July 2022.
With these revised SIX Listing Rules, SIX provides an alternative listing segment that is competitive with other financial centers, and at the same time, does not allow for less stringent obligations that could prove negative from an investor protection point of view. This means that issuers of GDRs have to fulfil similar transparency requirements as other primary listed equity securities such as ad hoc publicity obligations, (interim) financial reporting and disclosure of management transactions, yet GDRs are not deemed to be primary listed in the sense of the Financial Market Infrastructure Ordinance (for more details in respect of the amended Listing Rules, please refer to Regulatory Board Communiqué No. 4/2022.
Trading hours of GDRs are as follows (CET): Opening auction begins at 3.00 p.m. CET, continuous trading is until 5.20 p.m. CET, closing auction and “TAL” (Trading-at-Last) goes on until 5.40 p.m. CET.