HKEX announces end of stabilisation period for Northbound Investor ID Model

Maria Nikolova

Following the successful rollout of Northbound Investor ID Model in late September, the stabilisation period has ended after market close on October 12, 2018.

Hong Kong Exchanges and Clearing Limited (HKEX) has earlier today issued a circular informing market participants about the end of the stabilization period for Northbound Investor ID Model.

Following the successful rollout of the NB Investor ID Model on September 26, 2018, the stabilisation period ended after market close on October 12, 2018. The upgraded CSC has been operating smoothly since its launch so fallback is not required, HKEX said.

Under the NB Investor ID Model, Exchange Participants (EPs) that offer Northbound trading services are required to assign a unique number in a standard format, known as the Broker-to-Client Assigned Number (BCAN), to each of their Northbound trading clients. They also have to provide Client Identification Data (CID) to HKEX, which will forward the information to Mainland exchanges. BCANs and CID – the two main components of the NB Investor Model – are for regulators’ market surveillance only.

Implementation of the NB Investor ID Model is anticipated to result in more efficient Hong Kong-Mainland cross-border market surveillance.

Today, HKEX reminded China Connect Exchange Participants (CCEPs) and Trade-through Exchange Participants (TTEPs) that the Initial Period would end next Friday (October 19, 2018). Starting from Monday (October 22, 2018), China Connect orders tagged with invalid BCANs (i.e. those not successfully registered with the Mainland authorities) and China Connect buy orders tagged with reserved values as BCANs will be rejected by the Mainland exchanges. CCEPs and TTEPs should ensure that they are in full compliance with all the applicable requirements under the Rules of the Exchange in assigning and tagging BCANs to China Connect orders, including using correct BCANs and using reserved values only for sell orders for the clients where the necessary authorizations and consents from such clients cannot be obtained as permitted under Rule 1425A(6) of the Rules of the Exchange.

To facilitate CCEPs to test their system behaviour after the end of the Initial Period, an optional Practice Session for the NB Investor ID Model will be held on October 20, 2018 (Saturday) from 9:00 am to 11:30 am. All CCEPs are strongly encouraged to participate in the Practice Session.

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