Shanghai Stock Exchange (上海证券交易所)

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    The Shanghai Stock Exchange (SSE) (上海证券交易所) is one of mainland China’s two stock exchanges, and is situated in the Pudong district of Shanghai.

    The SSE was approved for establishment by the People’s Bank of China (PBOC) – the Chinese central bank – on 26 November 1990, and commenced official operation on 19 December of the same year.

    The exchange was the first to be established in China since the founding of the People’s Republic of China (PRC), and on the date of its launch had 26 securities organisations as exchange members, situated in locations including Shanghai, Shandong, Jiangxi, Anhui, Zhejiang and Hainan.

    The SSE is under the direct administration of the China Securities Regulatory Commission (CSRC), and is categorised as a non-profit legal person.

    The address of the SSE is 528 Pudong South Road, Pudong New District, Shanghai Municipality (上海市浦东新区浦东南路528号).

    The main responsibilities of the SSE are

    • To provide a site and infrastructure for securities transactions;
    • The formulation of operating regulations for the exchange;
    • Acceptance of listing applications and making arrangements for the listing of securities;
    • Organisation and oversight of securities transactions;
    • Conducting supervision and regulation of the members and listed companies of the SSE;
    • Administration and public announcement of market information.

    The SSE’s trading times are from from Monday to Friday. The morning session consists of centralised competitive pricing from 09:15 – 09:25, followed by consecutive bidding from 0:930 to 11:30.

    An afternoon session of consecutive bidding is held from 13:00 to 14:57, while centralised bidding for the close is held from 14:57 to 15:00.

    Block trading is also held from 15:00 to 15:30, during which period the SSE accepts applications for block transactions. Block trading customers are allowed to log-in to the SSE’s block trading electronic system starting from 14:30, however, to commence preparatory work.

    The SSE is closed on Saturday and Sunday, as well as other holidays as announced by the SSE.

    In accordance with the “Shanghai Stock Exchange Securities Code Allocation Regulations (上海证券交易所证券代码分配规则) issued on 28 May 2007, the SSE adopts a six digit code for listed securities, with the first three digits outlining the type of security.

    History 

    The 1842 Treat of Nanking brought a close to the First Opium War, as well as the creation of the International Settlement, or foreign concession areas, in Shanghai.

    The late 1860’s saw the emergence of a market for securities trading in Shanghai, following the development of propitious conditions in the International Settlement including banks, laws governing joint-stock companies, and established trading houses that sought greater diversification.

    The first list of shares appeared in June 1866, while foreign businessmen established the “Shanghai Sharebrokers’ Association” (上海掮客公会) (SSA)- China’s first stock exchange, in 1891 during a boom market for mining stocks.

    The Treaty of Shimonoseki in 1895 came as a major boost to China’s finance market by opening it up to foreign investors. These investors were allowed to establish factories in Chinese treaty ports including Shanghai, creating a read source of industrial shares.

    In 1904 the SSA applied for registration in Hong Kong and changed its name to the “Shanghai Stock Exchange.” Local companies were the main source of shares, with rubber plantations becoming a major sources of stock trading starting from the second decade of the 20th century.

    In 1920 the Shanghai Securities & Commodities Exchange commenced operation, followed by the Shanghai Chinese Merchant Exchange in 1921. These two exchanges merged with the SSE in 1929.

    Shanghai had established itself as the leading financial centre of East Asia by the 1930’s, providing markets for stocks, government bonds, futures and debentures.

    The SSE was forced to suspend operation by the occupation of the Shanghai International Settlement by Japanese troops on 8 December 1941.

    The SSE resumed operation after the Second World War on 16 September 1946, with the main shares including industrial and mining concerns.

    Just three years later China’s Communist Revolution forced it to shut once again, following the entry of the People Liberation Army (PLA) into Shanghai on 28 May 1949.

    The SSE was shut by the PLA on 10 June, who also arrested 238 traders. It would  remain shut for more than forty years subsequently.

    China’s securities markets re-emerged in the 1980’s during the reform and liberalisations implemented by Deng Xiaoping, which commenced in 1978.

    PBOC gave its approval to the re-establishment of the SSE on 26 November 1990, with operation commencing on 19 December.

    Zhu Rongji (朱镕基), who was then the Mayor of Shanghai just prior to becoming Chinese Premier, was in attendance at the opening ceremony for the SSE. The first trading session saw 49 transactions with a combined face value of 5.879008 million yuan.

    Deng Xiaoping launched his Southern Tour in 1992, providing major impetus to China’s capital markets and both the SSE and the Shenzhen Stock Exchange.

    As a consequence, during the three-day period from 21 to 23 May share prices rose 570%, with observers

    In July 1997 China’s State Council placed the SSE under the direct administration of the CSRC.

    The four years from 2001 to 2005 saw am market slump during which the value of the SSE halved. The slump eventuated in a ban on new IPO’s in April 2005, which was only lifted in May of 2006.

    On May 28 2007 the SSE issued the “Shanghai Stock Exchange Securities Code Allocation Regulations (上海证券交易所证券代码分配规则), which outlined the adoption of a six digit code consisting of Arabic numerals.

    On 17 November 2014 the Shanghai-Hong Kong Stock Connect scheme was launched.

    On 5 November 2018 President Xi Jinping announced plans for the launch of the SSE Star Market (科创板) and trial registration system. The Star Market commenced operation on 13 June 2019.

    On 17 June 2019 CSRC and the UK’s Financial Conduct Authority gave their approval to the launch of the Shanghai-London Stock Connective Initiative. On the same date Huatai Securities listed on the London Stock Exchange (LSE).