HKEX reminds market participants about pending launch of Northbound Investor ID Model

Maria Nikolova

The Northbound Investor ID Model is set to be launched on September 26, 2018.

The launch of the investor identification model for Northbound trading (NB Investor ID Model) through the mutual stock market access program of Hong Kong Exchanges and Clearing Limited (HKEX) and the exchanges in Shanghai and Shenzhen (Stock Connect) is now scheduled for September 26, 2018, HKEX has reminded market participants in a circular.

The launch of the model, initially scheduled for September 17, 2018, was delayed by more than a week due to severe weather conditions.

China Connect Exchange Participants (CCEPs) and Trade through Exchange Participants (TTEPs) are also reminded that an optional Post Release Test (PRT) will be held on September 22, 2018 (Saturday). CCEPs and TTEPs are instructed to ensure that they are well-prepared for the launch and that the appropriate system version will be used on the launch date.

After the successful completion of the PRT, the Exchange will confirm the rollout of the NB Investor ID Model at or before 1:00pm on the same day via a special message posted on the “Northbound Investor ID Model” section of the Mutual Market website. If there is an unexpected incident during the PRT and CSC host software fallback is required, an announcement will be made on the same web corner by the same time.

CCEPs and TTEPs are already allowed to submit the mapping data of Broker-to-Client Assigned Number (BCAN) and Client Identification Data (CID) for their clients. These entities are strongly advised to submit the mapping data as soon as possible, in order to allow sufficient time to rectify any error encountered during the registration process with the Mainland authorities.

CCEPs and TTEPs have to submit only production data to the secure file transfer protocol (SFTP) server. Submission of testing data to SFTP is not permitted, HKEX warns.

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.

Some entities have already sought to comply with the new requirements. In a notice on its website, online trading company Guotai Junan Securities (Hong Kong) Limited has informed its clients about the pending changes. The brokerage advises investors to complete, sign and return certain forms on or before September 13, 2018, as a written consent to provide personal data under Stock Connect in accordance with the Statement. Otherwise, the clients will not be allowed to place buy orders on T day, and the company would only be able to execute sell orders of their existing stocks holding under Stock Connect after the new model launches.

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