No Stamp Duty On RMB New Shares

March 1st, according to Hongkong media reports, the Hong Kong Stock Exchange and the securities and Futures Commission held a joint briefing yesterday to explain to the securities industry.

According to reports from Hongkong, the HKEx and the SFC held a joint briefing yesterday to explain to the securities industry the operation of Renminbi denominated securities.

It is understood that a group of Chinese securities dealers attending the briefing will consider proposing to the authorities that exemption from stamp duty should be waiver in the first year of the introduction of RMB securities, so as to promote the development of RMB business.

The securities industry has pointed out that the biggest worry of the industry is that the initial number of RMB securities is not large, and the turnover is limited. The commission income will only be a small number.

However, in order to cope with the RMB business, the securities sector needs to change the computer system software, change the trading and settlement system to meet the needs of a two currency.

The Hong Kong Stock Exchange will publish the latest official Renminbi exchange rate established by the HKMA on every trading day as a benchmark for calculating stamp duty.

According to the announcement of the HKEx, the securities exchange should also change the setting of the exchange rate in the computer system every day, which will bring additional burden to many securities firms.

It is reported that many groups representing the securities industry believe that the first year's exemption from stamp duty and then the effectiveness of the review will be beneficial to the development of RMB business.

On the other hand, under the current liquidation agreement, the bank can not borrow the renminbi, including the renminbi stock exhibition, that is, the bank's credit line to the securities bank, which is not used as a personal customer.

The industry is concerned that if a customer fails to deliver the money on time, he or she may seek a bank credit line to pay the relevant amount.

However, if it involves the sale and purchase of Renminbi shares, and the use of bank credit lines to complete the payment for clients, the industry is worried that it will violate the provisions of the liquidation agreement.

It is understood that banks are allowed to provide RMB borrowing and lending under such circumstances.

Cai Sicong, chairman of the association of securities dealers, said that the industry had discussed with the authorities that if a customer was in arrears with Renminbi stock receivables, due to normal business operations, the securities firm would allow the use of bank credit lines to complete the payment.

It is possible for the bank to replace the renminbi unless the customer often defaults.