Guide to buy A Shares via Shenzhen-Hong Kong Stock Connect (SZSC) 2017.05 Disclaimer This document is for general information and illustrative purposes only. The provision of information in this document is not, and should not be regarded as “investment advice” or as a “recommendation” regarding a course of action. While we try to ensure the accuracy of all information, we cannot guarantee that all of the information is accurate. MIDEA Group assumes no liability whatsoever for any errors or omissions in any content contained in this document. Please inquire your broker for detailed information or information for your particular circumstances. Open an account with broker • Local brokers outside of China Please check with your local broker whether it can offer the service to buy China A shares through Shenzhen–Hong Kong Stock Connect (SZSC), as in some countries local brokers can act as sub-brokerage so that local customers can trade A shares through its local brokers. • International online brokers Some international online brokers offer service to buy A shares through SZSC, such as Interactive Brokers, Charles Schwab, etc. • HK Brokers or Chinese / overseas brokers with license operating in HK Over 140 brokerage firms offer service to buy A shares through SZSC. Please refer to the attachment for such list of firms. However, not all brokers offer trading services for retail investors, and some brokers require that you need to visit its HK office to open bank account. Popular brokers for retail investors are HSBC and Citi Bank (below are the links to open an account): http://www.personal.hsbc.com.hk/1/2/special/investments/prom173ad https://www.citibank.com.hk/english/investment/shanghai-hongkong-stock- connect.htm?lid=HKENCBLIVLNTLShanghaiHongKongStockConnectIVSY Some basics of trading A shares • RMB conversion issues: Shenzhen A shares can only be traded in RMB.* Some brokers’ trading platforms offer easy foreign exchange services which allow you to invest in A share easily and conveniently. After selling, cashing out is in RMB*. Investors may exchange their RMB back to HKD or retain it for future trading. * The value of your RMB will subject to exchange rate fluctuations. • Trading Hours: Opening call auction session: 09:15 - 09:25 Continuous auction session: 09:30 - 11:30 and 13:00 - 14:57 Closing auction session: 14:57 - 15:00 • Investment Quota: Daily quota is RMB 13 billions and no aggregate quota. Key differences between SZ and HK stock markets • The two markets have different holidays. Be aware of the long holidays in China because traditionally A share trading is lower before long holidays such as National Week and the Lunar New Year. • There is a price limit mechanism in the China Stock Market. This mechanism will be applied to a stock should its price rise or fall by more than 10%. During this period, traders need to queue up to buy and sell their stocks and this may not ensure successful trading. • Green and red have different meanings in the two markets. In China, red refers to a rise, and green to a fall in the stock price. This is the opposite in Hong Kong and is worth noting to avoid any potential loss. • Day trading of stocks is unavailable in China. Unlike in Hong Kong, a stock cannot be purchased and sold within the same transaction day. Example 1: open account with IB Step 1: Click “Individual Investor or Trader” https://www.interactivebrokers.com/en/home.php Example 1: open account with IB Step 2: click “Start application” https://www.interactivebrokers.com/inv/en/main.php#open-account Example 1: open account with IB Step 3: fill in the information required https://gdcdyn.interactivebrokers.com/Universal/servlet/Application.Application Selector?ct=US&locale=en_US Example 1: open account with IB Step 4: check your email and verify the account. Fill in the info required, then the application will be submitted for approval. Example 2: open account with Citi HK Step 1: click the below link: https://www.citibank.com.hk/english/investment/shanghai-hongkong-stock- connect.htm?lid=HKENCBLIVLNTLShanghaiHongKongStockConnectIVSY Example 2: open account with Citi HK Step 2: fill in the Stock Service Application Form to make an appointment https://www.citibank.com.hk/form/investment/eng/form.html?icid=HKIVATEENIVSHTBAP Example 2: open account with Citi HK Step 3: Visit the Citi office in HK in person at the time of the appointment. Some remarks: 1. Please call (852) 2860 0183 in advance to provide your residence address and to check whether Citi HK can open the account for you or not, as they’re not allowed to open account for people reside in certain countries, such as Germany, according to the law of these countries. 2. During your visit to Citi HK office, you need to provide a residence address evidence, e.g. bank account, utility bills, which is in English (no translation will be accepted) and is issued within 90 days. 3. The bank would need at least 3 days to process your application after you visit their office in person. 4. You need to have HKD1.5mn on Citi account, otherwise you’ll be charged of HKD 500/month. .