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Screenshot of a breaking news alert e-mail from Q2 2017
With a view to listing approximately 400 new instruments, evergreen North American FX firm Interactive Brokers has entered into a strategic partnership with Shanghai-Hong Kong Stock Connect, which itself is a new program that allows investors in Hong Kong and Mainland China to trade securities in each other’s markets.
This program allows Hong Kong based investors as well as those from overseas the facility to trade Chinese securities on the Shanghai Stock Exchange, and allows qualified investors in Mainland China to trade Hong Kong securities.
Under this new program, the Hong Kong Stock Exchange (SEHK) and the Shanghai Stock Exchange (SSE) have established mutual order-routing connectivity and technical infrastructure to allow investors of their respective market to trade designated equity securities listed in the other’s market. Trades in both directions will settle in renminbi.
The move in this direction by Interactive Brokers echoes recent courses of action among several large FX firms in which a shift toward offering exchange-based trading has been prevalent.
Concurrently, many executing venues including Moscow Exchange, NASDAQ OMX and CME have majored on FX trading during the last year.
The interest in providing exchange-based trading of FX and stocks by these large industry participants has been accompanied by certain OTC FX firms that prefer their execution to remain off exchange, with innovations having been introduced this year including IG Group’s stockbroking platform which was launched in September in order to simplify the stock trading process for retail traders.
After a year of low volatility in FX, which has only begun to subside over the last two months, it is clear that electronic trading companies are busily engaged in diversifying their product ranges across other asset classes.
Furthermore, with the Chinese government showing signs of establishing renminbi trading hubs in certain free market economies, the focus on the Far East may be increasing even further.
For full details on the Interactive Brokers stock trading facility via Shanghai-HK Connect, click here.