China kicked off the long-awaited cross-border Shanghai-London Stock Connect on Friday, giving Chinese brokerage Huatai Securities the regulatory nod to list in Britain.
Shanghai-listed Huatai Securities, which counts Alibaba as a strategic investor, said in a filing with the Shanghai Stock Exchange that it has been given the green light by China’s securities watchdog to issue global depository receipts (GDR) at the London Stock Exchange.
Huatai didn’t give a fundraising target on Friday, but it has previously said it aims to raise at least $500 million.
The go-ahead from the China Securities Regulatory Commission (CSRC) would mark the launch of the Shanghai-London Stock Connect, which would allow companies publicly traded in Shanghai and London to list on each other’s bourses via the issuance of depository receipts (DRs).
“The program offers us access to one of the deepest and most influential capital markets in the world,” Zhou Yi, Chairman and CEO of Huatai, said in a statement to Reuters.
“We are pleased to be the first issuer to tap this new market of enormous potential and unprecedented opportunity,” he said, adding the offering would help Huatai expand its overseas footprint and strengthen its capital position.
The Shanghai-London Stock Connect represents China’s latest efforts to open its capital markets. China has already linked mainland and Hong Kong stock markets with a separate connect scheme.
Under the Shanghai-London Stock Connect, Chinese companies are allowed to raise fresh money through issuing GDRs in London. However, London-listed firms can initially only issue CDRs backed by existing shares, meaning they cannot raise funds through Shanghai listings.
Shanghai-London Stock Connecthas a range of businesses, including brokerage, wealth management and investment banking.
The company, which calls itself technology-empowered, introduced Internet giants Alibaba and Suning this year as strategic investors.