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1. What kinds of account do I need if I would like to invest in listed renminbi-denominated products via Oriental Patron Securities Limited (OPSL)? |
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For settlement
Renminbi Bank Account |
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You will need a renminbi bank account in Hong Kong and also sufficient renminbi for trading the product. The renminbi bank account can be used for IPO subscription, depositing refund cheque, dividend distribution and settling renminbi payment for any subsequent trading on the Stock Exchange of Hong Kong Ltd (SEHK) in the secondary market etc. Under the current regulations, only Hong Kong SAR residents with Hong Kong SAR identity cards may open personal renminbi bank accounts in Hong Kong. You should be aware of the lead time required for opening renminbi bank accounts and requesting renminbi cheque book as the banks may not be able to process your request immediately. |
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The daily maximum exchange limit for renminbi is RMB20,000 per individual. Investors should check with the banks for the account opening procedures as well as terms & conditions of the renminbi bank account. Some banks may impose restrictions on your renminbi cheque account and fund transfer to third party account. Therefore you should check with your bank beforehand. |
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For trading
Brokerage Account |
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What you need is a stock dealing account with OPSL. If you have already opened and maintained a securities trading account with OPSL, you do not need to set up a separate brokerage account specific for dealing in listed renminbi-denominated securities, but you should also carefully study the related specific terms, such as settlement procedures and risk disclosure, exchange rate and any related charges before agreeing to use such service. |
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Investor Participant Account |
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If you are going to use your Investor Participant Account (IP Account) opened with HKSCC to settle trades in listed renminbi-denominated securities, you should make sure you have set up an RMB Designated Bank Account with the Central Clearing and Settlement System (CCASS). |
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2. When I invest in listed renminbi-denominated securities, is the daily exchange limit applicable to me? |
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If an individual exchanges RMB with a bank, there is a maximum daily exchange limit of RMB 20,000. However, this limit does not apply to listed renminbi-denominated securities transactions, but investors should ensure that they have sufficient RMB for settling their trades. OPSL may, in its discretion and without giving you prior notice, prohibit or restrict your ability to trade listed renminbi-denominated securities through the securities trading account if you do not have sufficient RMB to settle the transactions. |
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3. How can I invest in listed renminbi-denominated securities? |
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Investors may invest in listed renminbi-denominated securities through its Initial Public Offering (IPO) or trading on the SEHK after it is listed on the SEHK. For both IPO and trading on the SEHK, investors should have opened an RMB bank account for settlement purpose. |
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4. Can I get renminbi margin financing from OPSL? |
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Since renminbi is subject to conversion restrictions and foreign exchange control mechanism, OPSL may not be able to provide renminbi margin financing to Investors. Investors should check with OPSL from time to time on the availability of renminbi margin financing and the detailed arrangements. If no such financing is available from OPSL, then investors need to have sufficient renminbi funds to settle the transactions. |
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Initial Public Offering
5. How can I subscribe listed renminbi-denominated securities through an IPO? |
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Application |
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The IPO for different listed renminbi-denominated securities may have different subscription channels. In general, you can submit your applications through either one of these channels: |
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Physical white forms (via receiving banks) - you can complete the white application form and attach payment in the form of either renminbi cheques (note that some banks may impose restrictions as mentioned earlier) or renminbi cashier orders. Any units allocated will be registered in your own name. |
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Physical yellow forms (via intermediaries) - you can check with OPSL on the availability of the yellow application form. If available, you can submit the yellow application form to OPSL to apply on your behalf. You should confirm with OPSL about the details of fees and charges, such as types, currency and amount. Any units allocated will be deposited into OPSL's CCASS account. |
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White forms eIPO (via the service provider specified in the prospectus) - you can submit an application through the designated website as specified in the prospectus. Payment will be made via internet banking service provided by the banks specified on the designated website. Investors should have a renminbi bank account with one of these banks. Any units allocated will be registered in your own name. |
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CCASS EIPO (via CCASS) - if you have an Investor Participant Account with CCASS (IP Account), you may instruct HKSCC via the CCASS Phone System or CCASS Internet System to cause HKSCC Nominees to apply for units on your behalf. Any units allocated will be registered in the name of HKSCC Nominees Ltd. |
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Fees and payment |
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For IPO application, please note that you will have to pay for the number of units subscribed, plus the SFC levy, SEHK trading fee and brokerage commission in renminbi. |
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For payment made by renminbi cheques or renminbi cashier orders, you should be aware of the lead time required for requesting renminbi cheque book from bank as mentioned in Q1 and the availability of renminbi cashier order services. |
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If you choose to submit your application through White Form eIPO, you should have maintained both a renminbi bank account and internet banking service with one of the banks specified by the White Form eIPO service provider to settle the relevant payment. |
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If you are a CCASS Investor Participant and wish to subscribe through this account, please make sure you have set up an RMB Designated Bank Account with CCASS for settling the payment. |
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After the IPO result is announced |
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In case of partial or unsuccessful allotment, depending on your IPO application channel, you will receive refund from either the share registrar or OPSL. You can deposit the refund in your renminbi bank account. |
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Trading on SEHK
6. What transaction costs are involved in listed renminbi-denominated securities trading? |
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Just like any stock transactions, secondary trading of listed renminbi-denominated securities are subject to brokerage commission, stamp duty, SFC levy, SEHK trading fee, and other fees and charges. All such costs will be collected from you in renminbi. Thereafter, under the current legislation, the stamp duty, SFC levy and SEHK trading fee on purchases and sales of listed renminbi-denominated securities are to be paid by OPSL on your behalf to the HKEx in HK dollar, based on an exchange rate determined by the Hong Kong Monetary Authority on the day of the trade. The exchange rates are published on the HKEx website by 11 am on each trading date. You can check with OPSL on more details of all fees related to listed renminbi-denominated securities trading (e.g. custody fees, scrip fee, dividend collection fees, etc) and the payment process. |
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7. How will my trading of listed renminbi-denominated securities be settled? |
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Listed renminbi-denominated securities will be settled in renminbi. You should confirm with OPSL about the payment method (for example, by cheque or electronic transfer) for your listed renminbi-denominated securities investment, and check with your bank with which you maintain your renminbi bank account whether they can support such a payment method and if any restrictions will be applied to fund transfer to third party account. |
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8. If my renminbi account does not have sufficient amount to settle the transaction, will OPSL charge my Hong Kong Dollar account to cover the shortfall? |
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If your securities trading account does not have sufficient renminbi to settle the transaction, OPSL shall have the right, acting in good faith, to convert the Hong Kong Dollar or other currency in your securities trading account into renminbi to cover the shortfall. You should watch out that if you default in settlement of a purchase or sale of listed renminbi-denominated securities, you may be liable to compensate OPSL for any losses caused by or arising from the default, such as any exchange loss suffered by OPSL in settling the transaction for you. |
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9. In terms of transaction documents, is there any difference in trading listed renminbi-denominated securities compared to other stocks? |
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OPSL will follow the same set of rules in preparing trading documents such as contract note, statement of account, etc, for the trades of renminbi-denominated securities as in the case of other equity products listed on the SEHK. You should contact OPSL if you have any questions about the information disclosed in the trading documents. |
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10. If I invest in listed renminbi-denominated securities, does it mean that I will always receive renminbi upon sale of my investments? |
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Currently, trading of listed renminbi-denominated securities on SEHK would be cleared in RMB through CCASS, so you would expect to receive renminbi when you sell listed renminbi-denominated securities through the SEHK. |
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Others
11. How are dividends paid? |
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Dividends of listed renminbi-denominated securities may be paid in renminbi or other currencies. Due to the exchange controls and restrictions applicable to renminbi, the product issuer may not always be able to obtain sufficient amounts of renminbi in a timely manner to pay dividends in renminbi. As a result, dividends may be paid in currencies other than renminbi. |
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12. Can I convert renminbi sale proceeds into Hong Kong dollar with OPSL? |
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Normally, OPSL will not convert renminbi sale proceeds into other currencies for investors. If you want to convert renminbi sale proceeds into other currency with OPSL, you should check with OPSL from time to time whether OPSL would at its absolute discretion provide such service to you. You should also carefully study the terms of the service, exchange rate and any related charges before agreeing to use such service. |
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13. Can I trade listed renminbi--denominated securities via my eTrade account with OPSL? |
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OPSL is continuing to upgrade its electronic trading system to enable eTrade Clients to trade listed renminbi-denominated securities via their eTrade Accounts with OPSL. If you realize that your eTrade Account becomes temporarily unavailable for trading renminbi-denominated securities, you may during such period call our eTrade Hotline on (852) 2135 0228 for assistance. |
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