The Chinese securities broker, Guotai Junan Securities, a subsidiary of Guotai Junan International Holdings (GTJAI), has started a market-making business for multiple stocks under the Hong Kong dollar (HKD) – Renminbi (RMB) Dual Counter Model, according to an announcement made today (Monday).

HKD-RMB Dual Counter Model

Along with the Dual Counter Market Making Programme, Hong Kong Exchanges and Clearing Limited (HKEX) launched the HKD-RMB Dual Counter Model on the same day. The program enables traders to trade selected stocks in both the Hong Kong dollar and the Chinese yuan. It was launched alongside the Dual Counter Market-Making Programme in HKEX's securities markets.

As one of the first market makers, Guotai Junan Securities has carried out the first-day's market transactions, the company said. During the unveiling, its parent company GTJAI said it was dedicated to enhancing offshore RMB liquidity in Hong Kong and promoting RMB internationalization.

Guotai Junan International is a financial services provider in Hong Kong. The Hong Kong Stock Exchange-listed company offers brokerage, corporate finance, asset management, loans, and financing services. GTJAI is also listed on the FTSE4Good Index by the London Stock Exchange.

Starting with 24 companies, including Tencent, Alibaba, and Baidu, HKD-RMB Dual Counter Model has started offering yuan counters for investors in Hong Kong. All the listed shares of the same securities would be fully interchangeable, according to HKEX's statement.

"The new Dual Counter Model is another key milestone in the development of Hong Kong's capital markets," the CEO of HKEX, Nicolas Aguzin stated. "It will give issuers and investors more choices, it will enrich Hong Kong's RMB product ecosystem, cementing its role as the world's leading offshore RMB hub, and it will support the ongoing internationalization of the RMB."

Dual Counter Market-Making Programme

The 24 companies selected for the program reportedly make up approximately 40% of the average daily trading volume in Hong Kong. Interested exchange participants have been invited by HKEX to apply to become dual market makers for eligible securities.

It is important to note, currently, investors in mainland China can trade stocks listed in Hong Kong through local market exchanges via Stock Connect. But, the newly-unveiled HKM-RMB Dual Counter Model would initially target investors holding offshore yuan and later those in mainland China.

HKEX launched a similar program in 2012, dubbed Dual Tranche, Dual Counter, that allowed users to offer and list two tranches of shares in both HKD and RMB.

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