Brian BollenShanghai was China’s first city to see the creation of stocks and a stock exchange. Stock trading started in Shanghai as early as 1860s in the wake of the Opium Wars. In 1891, the Shanghai Share brokers Association was established as a primitive bourse.
In 1920 and 1921, the Shanghai Security Goods Exchange and the Shanghai Chinese Security Exchange commenced operations respectively. By the 1930s, Shanghai had emerged as the financial centre of the Far East.
Both Chinese and foreign investors could trade stocks, debentures, government bonds and futures. In 1946, Shanghai Securities Exchange Co was created as a Chinese securities exchange.
Evolution through reform
It ceased operations three years in 1949. Since 1980, the SSE says that China’s securities market has evolved in tandem with the country’s introduction of reform, the opening-up policy and development of a socialist market economy.
In 1981, trading in treasury bonds was resumed. In 1984, stocks and enterprise bonds emerged in Shanghai and a few other cities. On 26 November 1990, Shanghai Stock Exchange (SSE) came into existence.
On 19 December of the same year it started formal operations and the SSE says it has developed into a comprehensive exchange with stocks, bonds, funds, derivatives products and a world-class exchange system.
Directly state-governed
The SSE is directly governed by the China Securities Regulatory Commission (CSRC). SSE bases its development on the rule of law, regulation, self-discipline and compliance. This was in order to create a transparent, open, secure and efficient marketplace.
SSE says it endeavours to perform a variety of functions such as providing marketplace and facilities for the securities trading, formulating business rules, accepting and arranging listings, organising and monitoring securities trading.
It also has the task of regulating members and listed companies, and managing and publicising market information. In October, 1992, the China Securities Regulatory Commission (CSRC) was established.
Across the nation
The CSRC set up 36 local offices across the nation, and established a centralised regulatory system for the securities and futures market. The SSE says the commission continues to improve the legal system within the capital market.
Cracking down on all kinds of illegal activities, it constantly enhances regulatory effectiveness, promoting market transparency and efficiency and preventing systemic risk, says the SSE.
Securities listed on SSE fall into four categories
- Stocks
- Bonds
- Funds
- Derivatives
Stocks are further divided into Class A Shares and Class B Shares, with A Shares limited to domestic investors and QFIIs only.
A QFII is a Qualified Foreign Institutional Investor. B Shares are available to both domestic and foreign investors. In 1990, the first batch of eight A Shares was listed. In 1992, the first B Share was listed.
Bonds traded on SSE include
- Treasury bonds (T-bonds)
- Local government bonds
- Enterprise bonds
- Corporate bonds
- Corporate bonds with detachable warrants
- Convertible corporate bonds
- Privately placed SME bonds
In addition, securities investment funds including exchange-traded funds, listed open-end funds, closed funds and monetary funds are available for trading on SSE.
In terms of derivatives, in February 2015 the SSE 50 ETF option was launched as Mainland China’s first exchange-traded option product.
Trading details
SSE is open for trading from Monday to Friday. The morning market session starts with a call auction from 9:15 to 9:25, which is followed by a continuous auction from 9:30 to 11:30.
In the afternoon market session, continuous auction runs from 13:00 to 15:00.
Intent orders for block trades are accepted between 9:30 and 11:30 and again between 13:00 and 15:30. Execution orders for block trades are accepted from 15:00 to 15:30. Special block ad hoc trade business is accepted between 15:00 and 17:00.
Founded: 1990 (26 November, began operating 19 December)
Address: 528 South Pudong RD., Shanghai, 200120, People's Republic of China
Tel: +8621 6880 8888
Website: http://english.sse.com.cn
email: globalbusiness@sse.com.cn
President: Dr Huang Hongyuan
Main indices: SSE Composite, SSE 180, SSE 50, SSE 380, SSE Mega-Cap, SSE MidCap, SSE Small Cap, SSE 100, SSE 150, Market Value Top 100 and numerous others
Opening hours: SSE is open for trading from Monday to Friday
Morning session: 09:15 - 09:25 call auction; 09:30 - 11:30 continuous auction
Afternoon session: 13:00 - 15:00 continuous auction
Intent orders for block trades accepted: 09:30 - 11:30; 13:00 - 15:30
Execution orders for block trades accepted: 15:00 - 15:30
Special block trade business, undertaken on an ad hoc basis, is accepted between 15:00 and 17:00. The market is closed at weekends and other public holidays as announced by SSE.
Market capitalisation: US$3.93trn as of March 2017
Number of listed companies: 1283 as at 26 May 2017
Serious fun fact: The SSE is one of two stock exchanges in China. The other is the Shenzhen Stock Exchange.
Fun fun fact: Before the 1997 handover of Hong Kong to China at the end of Britain's lease, China and Hong Kong business veterans often joked that to succeed in the region, it was essential to speak the local language. The local language in question was Scottish...
Key moments
1990 Founded on 26 November, began operating 19 December
1994 SSE signs memorandum of understanding with London Stock Exchange
1995 Signs information sharing agreement with NASD
1996 SSE accedes to International Organization of Securities Commissions (IOSCO)
1998 SSE signs a second memorandum of understanding with London Stock Exchange
2000 SSE joins Asian and Oceanian Stock Exchanges Federation
2002
- SSE joins World Federation of Exchanges
- Signs memorandum of understanding with Tokyo Stock Exchange
- Launches Qualified Foreign Institutional Investor (QFII) Scheme allowing certain institutional investors to invest in a limited range of cross-border securities products
2003 Signs memorandum of understanding with New York Stock Exchange
2004 Signs a third memorandum of understanding with London Stock Exchange
2006 Signs second memorandum of understanding with Tokyo Stock Exchange
2009 Signs agreement with Hong Kong Exchanges and Clearing Ltd on regular meetings between senior executives and on staff exchange
2011
- RMB Qualified Foreign Institutional Investor (RQFII) Scheme initiated
- Allows the use of RMB funds raised in Hong Kong by the subsidiaries of domestic fund management companies and securities companies in Hong Kong to invest in the domestic securities market
2014
- SSE launches Shanghai Hong Kong Stock Connect programme
- This allows investors in both exchanges to trade on the other market
2016 Launch of Shenzhen Hong Kong Stock Connect programme
2017
- The Shanghai Stock Exchange (SSE) and Moscow Exchange (MOEX) sign a strategic co-operation agreement in Moscow on 22 May
- This is its first such agreement with a foreign exchange
2015
- SSE joins International Capital Market Association
- Signs memorandum of understanding with Moscow Exchange
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Top ten stock exchanges of the world
- New York Stock Exchange (NYSE)
- NASDAQ (originally the National Association of Securities Dealers Automated Quotation exchange)
- London Stock Exchange (LSE)
- Tokyo Stock Exchange (TSE)
- Shanghai Stock Exchange (SSE)
- Hong Kong Stock Exchange (SEHK)
- Euronext
- Shenzhen Stock Exchange (SZSE)
- Toronto Stock Exchange (TMX)
- Frankfurt Stock Exchange (FWB)