Hong Kong Exchanges & Clearing Ltd. · HKEX:388
Hong Kong Exchanges & Clearing — NB Investor ID Briefing Materials
21 slides from Hong Kong Exchanges & Clearing's investor presentation, 2017
Slide 1: Investor ID Model for Northbound Trading under Stock Connect
INVESTOR ID MODEL FOR NORTHBOUND TRADING UNDER STOCK CONNECT
Slide 2: Disclaimer
DISCLAIMER The information contained in this presentation is for general informational purposes only and does not constitute an offer, solicitation, invitation or recommendation to subscribe for or purchase any securities or other products or to provide any investment advice of any kind. This presen
Slide 3: Agenda
AGENDA 1 OVERVIEW OF THE NORTHBOUND INVESTOR ID MODEL 2 CID SUBMISSION REQUIREMENTS 3 BCAN TAGGING REQUIREMENTS 4 TECHNICAL SETUP 5 Implementation TENTATIVE IMPLEMENTATION Timeline TIMELINE 3
Slide 4: Agenda: Overview of the Northbound Investor ID Model
AGENDA 1 OVERVIEW OF THE NORTHBOUND INVESTOR ID MODEL 2 CID SUBMISSION REQUIREMENTS 3 BCAN TAGGING REQUIREMENTS 4 TECHNICAL SETUP 5 Implementation TENTATIVE IMPLEMENTATION Timeline TIMELINE 4
Slide 5: Why Is the Northbound Investor ID Model Introduced?
WHY IS THE NORTHBOUND INVESTOR ID MODEL INTRODUCED? International Trend • European and US markets are implementing Investor ID regimes as part of their MiFID II and CAT plans and Hong Kong • SFC contemplating an investor ID regime in Hong Kong (including Market SB trading via Stock Connect) • Mainla
Slide 6: Key Features of the NB Investor ID Model
KEY FEATURES OF THE NB INVESTOR ID MODEL Who Are • CCEPs and TTEPs need to submit client information Affected • Investors can Opt In to trade Northbound Code • EPs to assign their Own Codes to clients Assignment • No central registration required for investors • Use Existing KYC information to reduc
Slide 7: Illustration of the NB Investor ID Model
ILLUSTRATION OF THE NB INVESTOR ID MODEL Hong Kong Mainland Broker HKEX SSE/SZSE BCAN SSE/SZSE File Processor (directly or through Investor CID ChinaClear) Information Brokers to submit BCAN and CID mapping of clients by 3 pm on T-1 day Order with BCAN Order with Broker Broker Firm ID + BCAN SSE/SZS
Slide 8: Agenda: CID Submission Requirements
AGENDA 1 OVERVIEW OF THE NORTHBOUND INVESTOR ID MODEL 2 CID SUBMISSION REQUIREMENTS 3 BCAN TAGGING REQUIREMENTS 4 TECHNICAL SETUP 5 Implementation TENTATIVE IMPLEMENTATION Timeline TIMELINE 8
Slide 9: Submission of BCAN-CID Mapping
SUBMISSION OF BCAN-CID MAPPING T-1 Day T Day • Submit BCAN-CID mapping by 3 pm • Tag NB orders with • Receive Response File within 5 min BCANs on a real-time • Receive Validation Result File after 6 pm basis • Receive BCAN Full Image File after 6 pm For CCEP only: • Submit Authorized TTEP Firm List
Slide 10: Important Notes to CCEP/TTEP
IMPORTANT NOTES TO CCEP/TTEP Before Execution: CCEP/TTEP should cancel and re-input the order immediately Input of Wrong BCAN After Execution: CCEP/TTEP should report the correct information immediately to SEHK CCEPs/TTEPs must obtain prescribed consents from individual clients that their personal i
Slide 11: Agenda: BCAN Tagging Requirements
AGENDA 1 OVERVIEW OF THE NORTHBOUND INVESTOR ID MODEL 2 CID SUBMISSION REQUIREMENTS 3 BCAN TAGGING REQUIREMENTS 4 TECHNICAL SETUP 5 Implementation TENTATIVE IMPLEMENTATION Timeline TIMELINE 11
Slide 12: BCAN Tagging Requirement (1)
BCAN TAGGING REQUIREMENT (1) BCAN • A client should be a non-affiliate of the CCEP/TTEP • CCEP/TTEP should assign a BCAN to itself for proprietary trading • Tagging every NB order on a real-time basis Orders without BCAN or with BCAN in wrong format will be rejected by SEHK Orders with invalid B
Slide 13: BCAN Tagging Requirement (2)
BCAN TAGGING REQUIREMENT (2) Scenario Orders from BCAN Tagging The client who is a (ii) Client routed through different intermediaries non-affiliate Overseas Hong Kong Order tagged with BCAN Client London HK Affiliate Affiliate CCEP SEHK BCAN Same group (iii) CCEP/TTEP’s (and/or their affiliates’) p
Slide 14: BCAN Tagging Requirement (3)
BCAN TAGGING REQUIREMENT (3) Scenario Orders From BCAN Tagging (iv) TTEP’s client TTEP’s client Order tagged with BCAN Client SEHK TTEP CCEP BCAN Note: A CCEP executing for TTEPs should set aside BCAN ranges for each of its TTEPs to assign to their clients so that BCANs will not overlap between the
Slide 15: BCAN Tagging Requirement (4)
BCAN TAGGING REQUIREMENT (4) Scenario Orders From BCAN Tagging Asset management (v) An asset management company managing multiple funds company / individual fund NB trading account is opened under the name of the asset management company： Order tagged with Fund X Asset BCAN Management CCEP SEHK Comp
Slide 16: Agenda: Technical Setup
AGENDA 1 OVERVIEW OF THE NORTHBOUND INVESTOR ID MODEL 2 CID SUBMISSION REQUIREMENTS 3 BCAN TAGGING REQUIREMENTS 4 TECHNICAL SETUP 5 Implementation Timeline TENTATIVE IMPLEMENTATION TIMELINE 16
Slide 17: Submission of BCAN Mapping File and Distribution of Response File
SUBMISSION OF BCAN MAPPING FILE AND DISTRIBUTION OF RESPONSE FILE • Text-based file encoded in UTF-8 • Open for submission via SDNet on Northbound trading days • File transfer using standard Secure File Transfer Protocol (SFTP) • Each CCEP/TTEP will be issued with two dedicated login accounts • Key-
Slide 18: Submission of BCAN Along with New Order
SUBMISSION OF BCAN ALONG WITH NEW ORDER • Supported by both Binary and FIX protocols of CCCG • New Party Identification for BCAN added to the New Order Message • Number data type ranging from 100 to 9,999,999,999 without leading zeroes. 0 to 99 are reserved • BCAN value is NOT echoed in the Executio
Slide 19: Agenda: Tentative Implementation Timeline
AGENDA 1 OVERVIEW OF THE NORTHBOUND INVESTOR ID MODEL 2 CID SUBMISSION REQUIREMENTS 3 BCAN TAGGING REQUIREMENTS 4 TECHNICAL SETUP 5 Implementation TENTATIVE IMPLEMENTATION Timeline TIMELINE 19
Slide 20: Tentative Implementation Timeline
TENTATIVE IMPLEMENTATION TIMELINE • Technical specifications • Market (8/1/2018) Announcement (30/11/2017) • BCAN-CID Mapping File Examples (15/2/2018) 2017 2018 Q4 Q2 Q1 Q3 Q4 Q2 Q1 Q3 Q2 Q3 Q4 Market System Development and Testing • Simulator package, End-to-end testing (April–Jul) • MR (Jul/Aug)
Slide 21: Further Information
FURTHER INFORMATION Northbound Investor ID Model Web Corner English: http://www.hkex.com.hk/nbinvestorid Chinese: http://www.hkex.com.hk/nbinvestorid_c 21
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