CHINA CONNECT SERVICES ANNEX
SUPPLEMENT TO SECURITIES DEALING SERVICES:HONG KONG MARKET ANNEX
1.

Definitions and Interpretation

1.1

In this China Connect Services Annex capitalised terms have the meaning given to themin the “CLSA Asia-Pacific Terms of Business” (the “Terms of Business”).

1.2This China Connect Services Annex is referred to herein as “this Annex”.

1.3

References in this Annex to “we”, “us” and “our” mean, unless the context otherwise
requires, CLSA and where the context requires will also include any company in the CLSA
Group, or persons connected with the CLSA Group, which are licensed brokers
incorporated and carrying on business exclusively outside the United Kingdom and theUnited States of America.

2.

Applicability

2.1

By giving us instructions to trade China Connect Securities via China Connect, you agree
to be bound by the terms of this Annex and acknowledge that you have read andunderstood the Risk Disclosures and Other Information set out in the Schedule hereto.

2.2

The terms and conditions set out in this Annex shall amend and be supplemental to the
Securities Dealing Services: Hong Kong Market Annex provided by us to you in addition
to, and supplemental to, the terms and conditions set out in the Terms of Business and inany applicable Market Annex(es). In the event of any inconsistency between these China
Connect Terms and Existing Terms, the provisions of these China Connect Terms shallprevail.

3.

Definitions
Capitalised terms used herein will have the meanings given below or otherwise in the
Existing Terms.
“A Shares” means any securities issued by companies incorporated in Mainland China
which are listed and traded on Mainland China A Share markets (Shanghai or Shenzhen)
and not on the SEHK.
“Average Pricing” means the allocation or application of an average price per China
Connect Security to each individual fund managed by the same fund manager in respectof trades in such China Connect Security on the same Trading Day.
“BCAN” has the meaning given in Clause 4 below.
“Cash” means all cash or cash equivalents in Renminbi received and held by us on theterms of these China Connect Terms.
“CCASS” means the Central Clearing and Settlement System operated by HKSCC for theclearing of securities listed or traded on The Stock Exchange of Hong Kong Limited and/or
any system established for the purpose of China Connect.
“China Connect” means the Shanghai Hong Kong Stock Connect and/or the Shenzhen
Hong Kong Stock Connect (as the case may be).
China Connect July 2022
1

“China Connect Authorities” means the regulators which regulate China Connect andactivities relating to China Connect, including without limitation, the CSRC, PBOC, SAFE,SFC and any other regulator, agency or authority with jurisdiction, authority or
responsibility in respect of China Connect.
“China Connect Entities” means the exchanges, clearing systems and other entities
which provide services relating to China Connect, including without limitation, the SEHK,HKSCC, SEHK Subsidiaries, SSE, SZSE and ChinaClear.
“China Connect Laws” means the laws and regulations of Hong Kong and Mainland China
from time to time in respect of China Connect or any activities arising from China Connect.
“China Connect Market” means the SSE and/or SZSE (as the case may be).
“China Connect Market System” means the system used for the trading of China
Connect Securities on the SSE and/or SZSE (as the case may be), as operated by the SSE
and SZSE respectively.
“China Connect Rules” means any rules, policies or guidelines published or applied by
any China Connect Authority or China Connect Entity from time to time in respect of China
Connect or any activities arising from China Connect.
“China Connect Securities” means any securities (including ETFs) listed on a China
Connect Market which may be eligible for trading by Hong Kong and international investors
on China Connect.
“China Connect Service” means the order-routing service through which Northboundorders placed by an Exchange Participant may be transmitted by an SEHK Subsidiary to
the corresponding China Connect Market for the buying and selling of China Connect
Securities and any related supporting services.
“China Connect Terms” means the terms in this Annex, as may be amended,
supplemented, modified or varied from time to time.
“ChinaClear” means China Securities Depository and Clearing Corporation Limited.
"ChiNext Eligible Investor” means a “professional investor” within the meaning ofparagraph (a), (b), (c), (d), (e), (f), (g), (h) or (i) of the definition of “professional investor”
in section 1 of Part 1 of Schedule 1 to the SFO or other types of investors that are permitted
or approved by the China Connect Authorities to trade ChiNext Shares through Shenzhen
Hong Kong Stock Connect.
“ChiNext Shares” means any securities listed on the ChiNext board of the SZSE which may
be traded by Hong Kong and overseas investors under Shenzhen Hong Kong Stock Connect.
“CHN BCAN” has the meaning given to such term in Clause 4.
“Clearing Participant” has the meaning given to such term in the rules of the Central
Clearing and Settlement System of Hong Kong.
“Client Identity Rules” means the SFC’s client identity rules in the SFC’s Code of Conduct
and Client Identity Rule Policy.
“Client Information” has the meaning given in Clause 13.1.

China Connect July 2022
2

“Client Securities Rules” means the Securities and Futures (Client Securities) Rules(Cap571H of the Laws of Hong Kong).
“Client Transaction” has the meaning given in Clause 13.1.
“CSC” means the China Stock Connect System for receiving and routing orders under
China Connect to the trading system on a China Connect Market for automatic matchingand execution.
“CSRC” means China Securities Regulatory Commission.
“CSRC China Connect Rules” means the Several Provisions regarding Mainland China –Hong Kong Stock Connect Mechanism, as promulgated by CSRC to prescribe the launchand operation of the China Connect.
"Custodian Participant" has the meaning given to such term in the rules of CCASS.

“ETFs” means any Exchange Traded Funds which are listed and traded on SSE and/or
SZSE (as the case may be) and not on the SEHK.
“Exchange Participant” has the meaning given by the rules of the SEHK.
“Existing Terms” means the applicable existing terms of business, annexes and/or otherrelevant notices and disclosure between you and us that govern our provision of securities
dealing services to you.
“Forced-sale Notice” has the meaning given in Clause 11.1.
“H Shares” means any securities issued by companies incorporated in Mainland China andlisted on the SEHK.
“HKEx” means the Hong Kong Exchanges and Clearing Limited.
“HKSCC” means the Hong Kong Securities Clearing Company Limited, a wholly-owned
subsidiary of HKEx.
“Mainland China” means the People’s Republic of China (excluding Hong Kong, Macau
and Taiwan).
“Mainland China Investor” means a person who is (a) an individual that possess
Mainland China identity/identification documents, including the Mainland Resident’s
Household Register (“Hukou”, 境 內 居 民 戶 口 簿 ), Resident Identity Card ( 居 民 身 份 證 ),Passport of the People’s Republic of China (中華人民共和國護照), and the Exit/ Entry Permit
for Travelling to and from Hong Kong and Macao (往來港澳通行證); (b) each holder of a
joint account if one of the holders of such joint account is considered as a Mainland China
Investor; or (c) a corporate or an unincorporated entity which is registered in the Mainland
China. Mainland China Investors do not include (i) any individual who holds a permit forproceeding to Hong Kong and Macao, i.e. one-way permit (前往港澳通行证， i.e., 单程证),or who has obtained an identity document as proof of permanent residence in a country
or region outside Mainland China; and (ii) any branch or subsidiary of a corporate orunincorporated entity registered in Mainland China which branch or subsidiary is lawfully
registered in a country or region outside Mainland China.
“Mainland China Listco” has the meaning given in paragraph 14 of the Schedule hereto.

China Connect July 2022
3

“Mapped SPSA” has the meaning given to such term in Clause 8.4 (A).
“Master SPSA Holder” means Master Special Segregated Account Holder, as defined in
the rules of CCASS.
“Master SPSA ID” means a 6-digit investor identification number as defined in the rulesof CCASS.
“Master SPSA Sell Order” has the meaning given to such term in Clause 8.4 (A).
“Non-trade Transfer” means a transfer of China Connect Securities which involves achange in the beneficial ownership of the China Connect Securities and which is notconducted through the China Connect Service and executed on the China Connect Market.
“Northbound” denotes the trading of China Connect Securities by Hong Kong andinternational investors through China Connect.
“PBOC” means the People’s Bank of China.
“Pre-Trade Checking” means the requirements and procedures under the China Connect
Laws and China Connect Rules pursuant to which a China Connect Authority or a China
Connect Entity may reject a sell order if an investor does not have sufficient available
China Connect Securities in its account.
“Related Person” means any of our Affiliates, or any director, officer, employee or agentof us or our Affiliates.
“Renminbi” or “RMB” means the lawful currency of Mainland China, deliverable in Hong
Kong.
“Restriction Effective Date” has the meaning given to such term in Clause 4.
“SAFE” means the State Administration of Foreign Exchange.
“SEHK” means The Stock Exchange of Hong Kong Limited.
"SEHK China Connect Rules" means the rules of SEHK, as amended for the purposes of
implementing China Connect, and as amended, supplemented, modified and/or varied
from time to time.
“SEHK Subsidiary” means a wholly-owned subsidiary of SEHK duly authorised as an
automated trading service provider under the SFO and licensed under applicable laws in
Mainland China to provide the order-routing service under China Connect.
“SFC” means the Securities and Futures Commission.
“SFO” means the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong).
“Shanghai Hong Kong Stock Connect” means a securities trading and clearing
programme developed or to be developed by SEHK, SSE, HKSCC and ChinaClear for theestablishment of mutual market access between SEHK and SSE.
“Shenzhen Hong Kong Stock Connect” means a securities trading and clearing
programme developed or to be developed by SEHK, SZSE, HKSCC and ChinaClear for theestablishment of mutual market access between SEHK and SZSE.
China Connect July 2022
4

“Special China Connect Securities” means any securities listed on the a China Connect
Market which the SEHK (after consulting with the relevant China Connect Market) fromtime to time accepts or designates as eligible only for China Connect sell orders and not
China Connect buy orders.
“SPSA” means a Special Segregated Account, as defined in the rules of CCASS.
“SPSA Sell Order” has the meaning given to such term in Clause 8.4.
“SSE” means the Shanghai Stock Exchange.
“SSE Rules” means the rules, operation procedures, circulars and notices of SSE in
respect of the stock listing and trading activities taking place on SSE (including the STAR
Market) and the SSE Regulations on the Shanghai Hong Kong Stock Connect Programme
which have been published by SSE for the purposes of implementing China Connect, as
amended, supplemented, modified and/or varied from time to time.
"STAR Eligible Investor” means a “professional investor” within the meaning ofparagraph (a), (b), (c), (d), (e), (f), (g), (h) or (i) of the definition of “professional investor”
in section 1 of Part 1 of Schedule 1 to the SFO or other types of investors that are permitted
or approved by the China Connect Authorities to trade STAR Shares through Shanghai
Hong Kong Stock Connect.
“STAR Market” means the SSE Sci-Tech Innovation Board.
“STAR Shares” means A Shares accepted for listing and admitted to trading on the STAR
Market from time to time.
“SZSE” means the Shenzhen Stock Exchange.
“SZSE Rules” means the rules, operation procedures, circulars and notices of SZSE in
respect of the stock listing and trading activities taking place on SZSE (including the
ChiNext board) and the SZSE Regulations on the Shenzhen Hong Kong Stock Connect
Programme which have been published by SZSE for the purposes of implementing China
Connect, as amended, supplemented, modified and/or varied from time to time.
“Taxes” means all retrospective, present or future taxes, duties, levies, imposts, charges,
assessments, deductions, withholdings, costs, expenses, any other tax (including without
limitation any capital gains tax or any provision for withholding income tax on capital gainor business tax on capital gains) and related liabilities, including additions to tax, penalties
and interest imposed on or in respect of (i) China Connect Securities or Cash, (ii) any
transaction effected under these China Connect Terms or (iii) you.
“Trading Day” means a day on which SEHK is open for Northbound trading for (a) in thecase of Shanghai Hong Kong Stock Connect, Hong Kong and Shanghai and (b) in the caseof Shenzhen Hong Kong Stock Connect, Hong Kong and Shenzhen), where “T day”
denotes the Trading Day on which a transaction is executed and “T+1 day” denotes (asthe case may be) the day which is one Trading Day, or in the context of the settlement offunds, one business day (on which banks in (a) Hong Kong and Shanghai (in the case of
Shanghai Hong Kong Stock Connect) or (b) Hong Kong and Shenzhen (in the case ofShenzhen Hong Kong Stock Connect) are generally open for business) after T day.
“Transitional Period” has the meaning given to such term in Clause 4.
“you” means the client to whom these China Connect Terms are addressed and, if
applicable, the principal(s) on whose behalf such client act(s).
China Connect July 2022
5

4.

Eligible Investors
You represent and undertake on a continuing basis, including without limitation on the firstdate that these China Connect Terms are effective and on each date that you place anorder or give an instruction in respect of China Connect Securities under these China
Connect Terms, that:
(a)

(b)

(c)

(i) you are not a Mainland China Investor; or (ii) if you are a Mainland China
Investor, who were assigned a registered BCAN with ‘CHN’ as the country/ regionof issuance (“CHN BCAN”) prior to the effective date of restricting Mainland China
Investor from Northbound trading under China Connect as prescribed by China
Connect Entities and/or China Connect Authorities (the “Restriction EffectiveDate”), you represent, warrant and undertake that (x) you shall trade China
Connect Securities only during a transitional period (as prescribed by China
Connect Entities and/or China Connect Authorities) under applicable China Connect
Rules starting from the Restriction Effective Date (the “Transitional Period”) andshall, as the case may be, (aa) use funds lawfully owned by you and located outside
Mainland China to make investments in China Connect Securities, or (bb) conduct
such trades pursuant to a program (including the Qualified Domestic Institutional
Investor Program, if applicable) approved by, or any other approval of, any
competent Mainland China regulator; (y) after the Transitional Period, you shall not
trade any China Connect Securities except as otherwise allowed under the China
Connect Rules or the China Connect Laws; and (z) you understand that your CHN
BCAN shall be deleted after the Transitional Period;
your investment in China Connect Securities does not violate the laws andregulations of Mainland China, including those in relation to foreign exchange
control and reporting; andyou will trade ChiNext Shares and/or STAR Shares only when you are, and in thecase where you are an intermediary offering brokerage trading service for or on
behalf of an underlying client or clients, each such underlying client is, a ChiNext
and/or STAR Eligible Investor.

5.

Compliance with China Connect Laws and China Connect Rules

5.1

Any trading in China Connect Securities will be subject to all China Connect Laws andChina Connect Rules, certain of which are referred to in the Schedule hereto.
SEHK Rules

5.2

These China Connect Terms highlight certain key features of China Connect as of the datehereof. We are not liable for any inaccuracies or misstatements in the information set out
in the Schedule hereto. These China Connect Terms do not purport to cover all China
Connect Laws and China Connect Rules. You shall be fully responsible for understanding
and complying with all China Connect Laws and China Connect Rules and for any
consequences of Northbound trading. We will not, and do not intend to, advise you on any
China Connect Laws or China Connect Rules. For further information, please refer to the
web pages on the HKEx website and the SFC website relating to China Connect from time
to time and other relevant sources.

5.3

We shall have the right to apply any procedures or requirements in respect of any tradingof China Connect Securities through China Connect which we determine in our absolute
discretion to be necessary or desirable for the purpose of any China Connect Laws, China
Connect Rules or market practice. Neither we nor any Related Person shall have any
liability for any losses or risks which may result directly or indirectly from such proceduresor requirements.

5.4

We may, in our absolute discretion, refuse to execute any instruction given by you, if (forexample, and without limitation):
China Connect July 2022
6

14A10(1) and
14B10(1)5.4.1 such instruction is not compliant with any China Connect Laws or China Connect
Rules or if we reasonably believe that such instruction may not be compliant with
any China Connect Laws or China Connect Rules or if we are required by SEHK not
to accept such instruction;

SEHK Rules
590(4) and1421(1)
SEHK Rule5.4.2 without prejudice to your obligations in Clause 8, in respect of any instruction to
make a Northbound sell order, we determine in our absolute discretion that you do
not have sufficient securities at the time of such order instruction to settle thedelivery obligation or if submission of the order would cause us to be in breach of
the Pre-Trade Checking requirements or related requirements under the China
Connect Rules or China Connect Laws; or1421(2)

SEHK Rule5.4.3 in respect of any instruction to make a Northbound buy order, we determine in
our absolute discretion that you do not have sufficient funds to settle the payment
obligation in respect of such order on the settlement day.

1424

Neither we nor any Related Person shall have any liability for any losses or risks which
may result directly or indirectly from such refusal.
5.5

Without limitation to the foregoing, we may in our absolute discretion suspend, terminate
or limit your ability to access the China Connect through us without advance notice to you,including but not limited to where requested or directed by a China Connect Authority.
SEHK Rule

5.6

In the event that SEHK, the relevant SEHK Subsidiary or HKSCC is notified by the relevant
China Connect Market, ChinaClear or any other relevant exchange, clearing house or
governmental or regulatory body that there is reasonable cause to believe that you havefailed to comply with or have breached any China Connect Laws or China Connect Rules,
you shall, upon our request provide such information (including translations into Chinese
if requested by us) as we may reasonably request to enable us to assist the relevant
exchange, clearing house or governmental or regulatory body including without limitation
the relevant China Connect Market, ChinaClear or any Mainland China governmental or
regulatory authority or authorities to assess whether there is any non-compliance or
breach of the China Connect Laws or China Connect Rules and/or the extent of any noncompliance or breach.

6.

Risk Disclosures and Acknowledgement

1437

You shall be deemed to acknowledge the following by instructing us in respect of any
transaction relating to China Connect Securities.
6.1

You acknowledge that you have read and understood the risk disclosures and otherinformation set out in the Schedule hereto and that you understand your obligations set
out in such Schedule including any consequences of a breach of China Connect Laws or
China Connect Rules.

6.2

You acknowledge that there is a risk of prohibition from trading China Connect Securities
and that your instructions to trade China Connect Securities may not be accepted.

6.3

You acknowledge that neither we nor any Related Person shall be liable for any loss,
liability or third party claim or demand that you may suffer directly or indirectly as a resultof any action or inaction by us or any Related Person in connection with the provision of
trading services in respect of China Connect Securities to you by us including, without
limitation, the materialisation of any of the risks described in the Schedule hereto.
SEHK Rules

6.4

You acknowledge that SEHK has the power not to extend the China Connect Service toyou, and the power to require us not to accept instructions from you, if it is found that
China Connect July 2022
7

14A10(3) and
14B10(3)you, we or any of our clients have or may have committed any abnormal trading conduct
set out in the SSE Rules and/or the SZSE Rules (as the case may be) or failed to comply
with any China Connect Laws or China Connect Rules.
SEHK Rules

6.5

You acknowledge that if the SSE Rules and/or the SZSE Rules (as the case may be) are
breached, or the disclosure and other obligations referred to in any China Connect Laws
or China Connect Rules are breached, (i) the relevant China Connect Market has the power
to carry out investigations, and may, through SEHK (or through the relevant SEHK
Subsidiary, or any other governmental or regulatory body), require us or a Related Person
to (a) provide relevant information and materials relating to you and any other persons
referred to in the SEHK China Connect Rules including, without limitation, in relation to
your identity, personal data and trading activity; and (b) to assist in a China Connect
Authority’s investigation in relation to you and/or your trading activity; and (ii) you may
be subject to regulatory investigations and legal and regulatory consequences if you arein breach of, or fail to comply with, such laws, rules and regulations.

14A10(4) and
14B10(4)

SEHK Rules

6.6

6.7

You acknowledge that the SEHK may (for the purpose of assisting the relevant China
Connect Market in its regulatory surveillance of the China Connect Market andenforcement of the SSE Rules and/or SZSE Rules (as the case may be) and as part of theregulatory cooperation arrangement between the SEHK, the relevant SEHK Subsidiaryand the relevant China Connect Market), at the request of the relevant China Connect
Market, require us to provide information (including, without limitation, in relation to youridentity, personal data and trading activity) in relation to you and any other persons
referred to in the SEHK China Connect Rules with respect to any China Connect orders
placed or China Connect transactions made or entered into by us on your or their behalf.

14A10(6) and
14B10(6)You acknowledge that where a China Connect Authority considers that there is a serious
breach of the SSE Rules and/or the SZSE Rules (as the case may be), we may be requiredby a China Connect Authority to (a) issue warning statements (verbally or in writing) toyou; and (b) cease providing you with any service relating to trading China Connect
Securities through China Connect.
SEHK Rules

6.8

You acknowledge that, prior to us informing you that a Northbound buy order instructedby you has been settled, you shall not instruct a Northbound sell order in respect of the
China Connect Securities which are the subject of such Northbound buy order.

14A06(4) and
14B06(5)

SEHK Rule

6.9

You acknowledge and consent to us or any Related Person providing information relating
to you and your profile, including the type and value of Northbound buy and sell orders
and transactions executed on your behalf to a China Connect Authority at such intervals
and in such form as such China Connect Authority may specify from time to time including
in relation to an investigation or surveillance by a China Connect Authority.

1441

SEHK Rules

6.10

You acknowledge and accept responsibility for paying all fees, charges, levies and taxes
and shall comply with any filing or registration obligations as may be required under any
China Connect Laws or China Connect Rules relating to any China Connect Securities andany dividends or entitlements in respect of such China Connect Securities.

6.11

You acknowledge and accept that we will be subject to recordkeeping requirements under
the China Connect Rules and may therefore retain records (including telephone andelectronic communications and account information) in relation to your Northbound orders
and trading for 20 years or as otherwise required under the China Connect Rules or the
China Connect Laws.

6.12

You acknowledge and accept that the SEHK may upon the request of the relevant China
Connect Market require us to reject any order made on your behalf.

China Connect July 2022
8

14A11(3) and
14B11(3)6.13

You acknowledge and accept that none of the China Connect Authorities or their respective
directors, employees and agents shall be responsible or held liable for any loss or damage
directly or indirectly suffered by us or any Related Person, you or any other third party
arising from or in connection with (i) the trading of China Connect Securities or theoperation of the CSC in respect of China Connect Securities, or (ii) any amendments,
making or enforcement of the China Connect Rules; or (iii) any action taken by a China
Connect Authority in discharge of its supervisory or regulatory obligations or functions(including any action taken in respect of abnormal trading activities).

7.

Representations
You make the representations set out in this Clause to us on a continuing basis:

SEHK Rules
14A10(1) and

7.1

that you are aware of and shall comply with all China Connect Laws and China Connect
Rules to which you may be subject;

7.2 that the execution of any instruction you give to us shall not result in any breach of any
China Connect Laws or China Connect Rules; and7.3 that you understand and have assessed the risks relating to China Connect and you arewilling to undertake the risks relating to China Connect.
7.4 You make the following representations to us on each date you instruct an order to sell China
Connect Securities:
7.4.1 that you do not know of any fact that might impair the validity of such China Connect
Securities and that you have full authority to receive, deal with and give instructions,authorisations or declarations in respect of the same;
7.4.2 that there is no adverse claim to such China Connect Securities; and7.4.3 that there is no restriction on the transfer of such China Connect Securities otherthan those expressly provided for under the SEHK rules or CCASS rules.
8.

Compliance with Pre-Trade Checking Requirements

8.1 You undertake that you will comply with any requirements relating to Pre-Trade Checking
mandated by the China Connect Authorities, the China Connect Entities or as notified to
you by us.
8.2 In addition, you undertake to ensure there are sufficient available China Connect Securities
in your account with us or in the relevant SPSA or Mapped SPSAs (as applicable) by theapplicable cut-off time (as notified to you by us from time to time) to cover any proposedsell order given on the relevant Trading Day.
8.3

Subject to Clause 8.4, if we consider that you do not for whatever reason have sufficientavailable China Connect Securities in your account to settle a sell order by the applicable
cut-off time (as notified to you by us from time to time) we may in our absolute discretion:
8.3.1 reject your sell order (in whole or in part);
8.3.2 use any China Connect Securities in the designated CCASS stock account(s) which
we hold for ourselves or on behalf of our other customers to fulfil the Pre-Trade
Checking requirement in respect of your sell order, in which case you shall
reimburse us for any costs, losses or expenses which we incur as a result of buying
in or otherwise sourcing the amount of China Connect Securities which you havefailed to deliver in respect of your sell order on such terms and at such price(including any associated fees and expenses) and at such time as we shalldetermine in our absolute discretion; orChina Connect July 2022
9

14B10(1)8.3.3 perform any other act which we consider necessary or desirable to comply with PreTrade Checking and/or relevant China Connect Laws or China Connect Rules andto cover your shortfall (including but not limited to applying any other China
Connect Securities available to us from other sources).
8.4 Subject to the requirements in these China Connect Terms and the Existing Terms, we may
allow you to place a sell order for China Connect Securities held in an SPSA, other than
SPSA which has been mapped to a Master SPSA ID (such a sell order to be referred toherein as an “SPSA Sell Order”), in which case the Pre-Trade Checking shall be carriedout in relation to that SPSA. If the SPSA Sell Order is executed, the relevant China Connect
Securities will be delivered to us or our Clearing Participant for settlement.
8.
4(A) Subject to the requirements in these China Connect Terms and the Existing Terms, if
you are a Master SPSA Holder, we may allow you to place a sell order for China Connect
Securities held in SPSA(s) mapped to a Master SPSA ID (each a “Mapped SPSA”) (such a sellorder to be referred to herein as a “Master SPSA Sell Order”), in which case the Pre-Trade
Checking shall be carried out in relation to all Mapped SPSA mapped to the relevant Master
SPSA ID. If the Master SPSA Sell Order is executed, the relevant China Connect Securities will
be delivered to us or our Clearing Participant for settlement.
8.5

If we have consented to your submission of SPSA Sell Orders, you may instruct us to
execute an SPSA Sell Order in relation to a given SPSA, subject to the following:
8.5.1 you must have opened that SPSA with a Custodian Participant in accordance withthe rules of CCASS, have been issued an investor identification number in respectof that SPSA, have designated and authorized us to be an executing broker for thatSPSA and have provided such details as we may from time to time request in
relation to that SPSA, including the investor identification number;
8.5.2 no SPSA Sell Orders will be accepted for a given SPSA before the effective date ofour designation as an executing broker for that SPSA, as determined by HKSCC,
the SEHK or the relevant SEHK Subsidiary;
8.5.3 any SPSA Sell Order must, at the time it is instructed to us, be designated as an
SPSA Sell Order and contain such details (including the relevant investor
identification number) and be in such form and manner as may be agreed with us
from time to time; your failure to do shall entitle us to execute the order as a nonSPSA sell order, in which event the requirements of Clause 8.3 shall apply;
8.5.4 we shall be entitled to rely on all information you provide in relation to an SPSA
Sell Order, including the investor identification number;
8.5.5 we shall be entitled to assume that the relevant China Connect Securities to bedelivered by you (or your Custodian Participant on your behalf) in settlement of an
SPSA Sell Order will be delivered from the same SPSA to which the SPSA Sell Order
relates; and8.5.6 you must comply, and procure that the relevant Custodian Participant complies,
with any other relevant requirements as may be imposed by HKSCC, the SEHK or
the relevant SEHK Subsidiary from time to time.

8.
5(A) If we have consented to your submission of Master SPSA Sell Orders, you may instruct
us to execute a Master SPSA Sell Order in relation to the Mapped SPSA, subject to the following:
8.5.(A1) you (as a Master SPSA Holder) must, have been designated a Master SPSA ID,
have designated and authorized us to be an executing broker for the Mapped SPSAs,
have provided pre-allocation instructions to us in respect of the relevant China
Connect Securities and the relevant Mapped SPSAs and have provided such details
as we may from time to time request in relation to the Mapped SPSA, including theMaster SPSA ID;

China Connect July 2022
10

8.5.(A2) no Master SPSA Sell Orders will be accepted for the Mapped SPSAs before theeffective date of our designation as an executing broker for such Mapped SPSAs,
as determined by HKSCC, the SEHK or the relevant SEHK Subsidiary;
8.5.(A3) any Master SPSA Sell Order must, at the time it is instructed to us, be designatedas a Master SPSA Sell Order and contain such details (including the relevant Master
SPSA ID) and be in such form and manner as may be agreed with us from time totime; your failure to do shall entitle us to execute the order as a SPSA Sell Order,in which event the requirements of Clause 8.5 shall apply;
8.5.(A4) we shall be entitled to rely on all information you provide in relation to a Master
SPSA Sell Order, including the Master SPSA ID;
8.5.(A5) we shall be entitled to assume that the relevant China Connect Securities to bedelivered by you (or your Custodian Participant on your behalf) in settlement of a
Master SPSA Sell Order will be delivered from the Mapped SPSAs to which the
Master SPSA Sell Order relates; and8.5.(A6) you must comply, and procure that the relevant Custodian Participant complies,
with any other relevant requirements as may be imposed by HKSCC, the SEHK or
the relevant SEHK Subsidiary from time to time.
8.6

For the avoidance of doubt, we shall have no obligation to consent to our designation as
an executing broker for an SPSA or a Mapped SPSA or to continue to provide execution
services in relation to SPSA Sell Orders and/or Master SPSA Sell Orders. We may at any
time in our absolute discretion withdraw our consent to execute SPSA Sell Orders and/or
Master SPSA Sell Orders in relation to any or all of your SPSAs and/or Mapped SPSAs.

8.7

By instructing us to execute an SPSA Sell Order and/or Master SPSA Sell Order, yourepresent and warrant that:
8.7.1 the relevant SPSA and/or the relevant Mapped SPSAs is maintained on your behalf
by your Custodian Participant, that you have authorized us to execute on yourbehalf the sale of China Connect Securities in that SPSA and/or such Mapped SPSAs
and that we are a designated executing broker for that SPSA and/or Mapped SPSA;
8.7.2 there are sufficient China Connect Securities in the specified SPSA and/or Mapped
SPSA(s) and have made arrangements with the relevant Custodian Participant todeliver the relevant China Connect Securities in that SPSA and/or the relevant
Mapped SPSA(s) to us or our Clearing Participant to ensure timely settlement of the
SPSA Sell Order and/or Master SPSA Sell Order, and you understand andacknowledge that if you do not have sufficient China Connect Securities in yourSPSA and/or Mapped SPSAs at the time of the Pre-Trade Checking, your SPSA Sell
Order and/or Master SPSA Sell Order may be rejected; and8.7.3 you have authorized the reproduction, replication and transmission of the stock
holding records of your SPSA and/or Mapped SPSAs for the purpose of enabling the
SEHK and the relevant SEHK Subsidiary to carry out the Pre-Trade Checking.

8.8

If for whatever reason there is late, incomplete or failed delivery of China Connect
Securities in relation to an SPSA Sell Order and/or Master SPSA Sell Order you have
instructed, you undertake to:
8.8.1 indemnify and hold harmless us for any costs, losses or expenses we incur as aresult of the late, incomplete or failed delivery, including but not limited to any costs
and taxes associated with buying equivalent China Connect Securities tocover the shortfall, any penalties imposed by any China Connect Authorities, andany financing costs, hedging costs and mark-to-market losses suffered as a resultof any China Connect Securities belonging to us or our other clients being
unavailable for sale (whether due to their being “Securities-on-hold” or otherwise)or any China Connect Securities purchased for the account of us or our other clientsnot being delivered by the HKSCC to us as a result;
China Connect July 2022
11

8.8.2 provide, or procure that the relevant Custodian Participant provides, promptly all
such information and supporting documents relating to any outstanding or overdue
short stock positions as may be required by HKSCC to determine that theoutstanding or overdue short stock position is due to the failure of the relevant
Custodian Participant to deliver China Connect Securities from the relevant SPSA
and/or Mapped SPSAs to us;
8.8.3 procure the delivery of such China Connect Securities to us as soon as possible, andin any case within such time as is required by us to enable us to meet our delivery
obligations to the HKSCC or to our clients; and8.8.4 accept that we may request the HKSCC to make adjustments to the sellable balanceof your SPSA and/or Mapped SPSAs, which may result in a reduction in the sellable
balance of your SPSA and/or Mapped SPSAs.
8.9

You undertake that (i) without our prior consent, you will not make any change in thestatus of any SPSA and/or Mapped SPSAs for which we have been designated as an
executing broker, including but not limited to, termination or suspension of that SPSA
and/or Mapped SPSAs or deletion of us as a designated executing broker for that SPSA
and/or Mapped SPSAs, and (ii) you will forthwith notify us of any events or potential events
that may lead to such changes.

8.10 In addition, we may in our absolute discretion reject your sell order (in whole or in part)if for any other reason we consider that there is or may be non-compliance with any China
Connect Laws or China Connect Rules. Any risk, loss or cost resulting from noncomplianceor potential non-compliance with Pre-Trade Checking and/or the relevant China Connect
Laws or China Connect Rules shall be borne by you.
8.11 If you give any sell order in respect of any China Connect Securities allocated to any fundmanaged by you, you undertake to ensure that there are sufficient available China Connect
Securities in your account allocated to such fund by the applicable cut-off time (as notified
to you by us from time to time) to cover any such proposed sell order on the relevant
Trading Day. In all cases, it is your responsibility to ensure that each of the funds managed
by you complies with all China Connect Laws and China Connect Rules to which therelevant fund may be subject.
Any risk, loss or cost resulting from non-compliance or potential non-compliance with Pre
Trade Checking and/or the relevant China Connect Laws or China Connect Rules shall beborne by you.
9.

Covered Short Selling
We will only accept genuine long sale orders over China Connect Securities unless we haveinformed you of our consent to providing covered short selling services. You acknowledge
that unless you indicate otherwise to us, we will treat any sell order submitted by you to
us as being a genuine long sale order (without any corresponding borrow in yourinventory).

10.

Settlement and Currency Conversion

10.1 As all Northbound trading is effected and settled in Renminbi, if we do not receive sufficient
Renminbi before settlement of a Northbound buy order to settle such purchase of China
Connect Securities, settlement may be delayed and/or fail and you may not acquire title
to, or become entitled to sell or transfer the relevant China Connect Securities. Where wehold any funds on your behalf, if there are insufficient Renminbi funds to settle any
Northbound buy order or other payment obligation in connection with
China Connect, you authorise us to convert any funds in any other currency which we holdon your behalf into Renminbi for the purposes of settlement thereof.
China Connect July 202212

10.2 Notwithstanding any provisions in the Existing Terms, where it is necessary to convert one
currency to another pursuant to these China Connect Terms, such conversion may be
carried out automatically by us in a commercially reasonable manner without prior notice
to you. Any risk, loss or cost (including fees, charges and/or commissions) in connection
with or resulting from any conversion of one currency into another currency pursuant tothese China Connect Terms shall be borne by you.
10.3 Unless otherwise agreed with us, all buy or sell orders to be settled through an SPSA and/or
Mapped SPSA(s) will be settled between you and us in accordance with the delivery versus
payment basis for settlement instructions as set out in the operation procedures issued
by CCASS with respect to China Connect Securities.
You agree and acknowledge that the timing of such settlement between you and us may
be different from the timing of the settlement arrangements between HKSCC and us on
your behalf in connection with the same order. In the event that we are required to settle
funds with you prior to us receiving the corresponding funds from HKSCC in settlement ofa trade on your behalf, you agree that (a) we shall retain the funds received from the
HKSCC on T+1 day; and (b) you shall reimburse us an amount equal to the amount we
had paid you minus the amount we received from the HKSCC if it’s more than zero. In
event we do not receive funds from the HKSCC on T+1, you agree to reimburse us thewhole amount of such funds we had paid you, within reasonable time of demand as we
may in our absolute discretion specify and shall be responsible to us for any loss, costs,
fees and expenses incurred by us in connection with such settlement.
10.4 By placing an SPSA Sell Order and/or Master SPSA Sell Order, you hereby authorise us togive such instructions and information relating to the SPSA Sell Order and/or Master SPSA
Sell Order (including the investor identification number and Master SPSA ID) to your
Custodian Participant and its affiliates as may be necessary or desirable to procure timely
settlement of any resulting transaction, and you agree to be bound by such resulting
transaction and to settle such transaction in a timely manner, without further confirmationfrom you to us or your custodian prior to settlement. You agree that you will not modify
the settlement arrangements for an SPSA Sell Order and/or Master SPSA Sell Order after
we have executed such SPSA Sell Order and/or Master SPSA Sell Order. Subject to theaforesaid, we shall be responsible for losses caused directly as a result of any incorrect
instruction or information we sent to the Custodian Participant for settlement purpose.
10.5 You agree that in the event that an order (including an SPSA Sell Order and Master SPSA
Sell Order) results in a transaction which is not settled in a timely manner, we have theright to immediately and without prior notice to you take such action as we consider
appropriate to reduce or eliminate any loss or liability that we suffer or may suffer(including but not limited to taking any steps to sell, realize, dispose of or otherwise deal
with the relevant China Connect Securities) and that you shall indemnify and hold us
harmless for any liabilities, expenses or other losses we may incur in exercising theforegoing right. You further agree that we shall have no liability to you for any loss,
diminution in value or other damages whatsoever for any action or inaction of us or our
agents pursuant to this Clause.
10.6 Notwithstanding any provisions in the Existing Terms, where we determine that there isinsufficient liquidity in RMB to settle any buy orders, we may, in our sole and absolute
discretion, reject your instructions to place such buy order.
11.

Sale, Transfer and Disgorgement
SEHK Rules

11.1 Where, under the terms of the China Connect Rules, we receive notice (a “Forced-sale
Notice”) from a China Connect Authority or China Connect Entity requiring us to sellandChina Connect July 2022
13

14A08(7) and
14B08(7)liquidate a specified number of China Connect Securities, we shall be entitled to issue acorresponding notice (a “Client Forced-sale Notice”) to you requesting you to sell andliquidate any number of such China Connect Securities that you hold in your account withus (as determined by us in our sole discretion) within the period specified by the relevant
China Connect Authority or China Connect Entity, and you undertake to comply with any
such Client Forced-sale Notice.
SEHK Rules

11.2 In relation to any Forced-sale Notice, you authorise us to sell or arrange for the sale ofsuch China Connect Securities on your behalf at such price and on such terms as we
may determine in our absolute discretion if you fail to comply in a timely manner with a
Client Forced-sale Notice, to the extent necessary to comply with all China Connect Laws
and China Connect Rules.

14A08(5) to (12)and 14B08(5) to(12)
SEHK Rules
14A08(7) and
14B08(7)CCASS Rule 4110

11.3

Where China Connect Securities owned by you that are the subject of a Client Forcedsale Notice have been transferred from the holding of the Clearing Participant that settled
the relevant Northbound buy order (the “Original CP”) to another Clearing Participant or
custodian (the “Recipient Agent”), you authorise us to provide instructions to the
Recipient Agent on your behalf to return the relevant China Connect Securities to theOriginal CP for sale and liquidation in accordance with all China Connect Laws and China
Connect Rules. You also undertake to inform the Recipient Agent of such authorisation
and, where required, you undertake to instruct the Recipient Agent to act accordingly.

11.4 You authorise us to sell or arrange for the sale of any amount of China Connect Securities
owned by you if we receive notice from any China Connect Authority requiring you todisgorge any profits as a result of the “short swing profit rule”, as described in paragraph
15 (Short Swing Profit Rule) of the Schedule hereto.
11.5 In addition to the above, you authorise us to sell, transfer or carry out any other action in
relation to China Connect Securities owned by you if we are instructed to do so by any
China Connect Authority or if we otherwise determine in our absolute discretion that it isnecessary or desirable to do so in order to comply with any China Connect Laws or China
Connect Rules.
11.6 Neither we nor any Related Person shall have any liability for any losses or risks which may
result directly or indirectly from any actions taken by us or a Related Person in respect of
this Clause.
12.

Custody

12.1 Applicability
This Clause is only applicable when you have delivered to us the China Connect Securities
in relation to Pre-Trade Checking under the China Connect Rules and China Connect Laws.

12.2 Nature of custodial services
12.2.1 You acknowledge that the primary or only reason that we are offering you custodialservices is in relation to Pre-Trade Checking under the China Connect Rules andChina Connect Laws, and that the provision of custodial services is not part ofour normal business activities. Accordingly, any custodial services offered by us
are limited in their nature.
12.2.2 You acknowledge that we conduct business in China Connect Securities for otherclients and for our own account.
12.2.3You shall be solely responsible for all filings, tax returns and reports of any
transaction in respect of or relating to China Connect Securities held under this
China Connect July 2022
14

(iv)

Clause, as may be required by any relevant authority, whether government orotherwise.
12.3 Establishment of custody account12.3.112.3.2

You authorise us to establish on our books a custody account or accounts (the"Custody Account") for the receipt, safekeeping and maintenance of China
Connect Securities.
We will determine in our reasonable discretion whether to accept in the Custody
Account any proposed delivery of China Connect Securities.

12.4 Custodial procedures
12.4.112.4.212.4.312.4.412.4.512.4.612.4.7

We will be under no obligation to credit China Connect Securities to the Custody
Account before our receipt of such China Connect Securities by final settlement.
If we receive one or more instructions to deliver from the Custody Account anamount of China Connect Securities exceeding those credited to the Custody
Account, we may reject any such instruction or elect to perform any instructionin whole or in part, and in any order.
You acknowledge that deliveries of China Connect Securities and payments
therefor may not be simultaneous. Accordingly, if we receive an instruction todeliver China Connect Securities against payment or to pay for China Connect
Securities against delivery, we may make or accept payment for or delivery of
China Connect Securities in accordance with relevant market practices and/or
rules and/or applicable law or regulation.
We shall make payment for and/or receive or deliver China Connect Securities
only upon receipt of and in accordance with specific instructions (except asotherwise specifically provided in these China Connect Terms).
Unless we have received and accepted a contrary instruction, we may carry out
the following without any instruction:(i) in your name or on your behalf, sign any document relating to China
Connect Securities which may be required (i) to obtain receipt of any China
Connect Securities or funds or (ii) by any tax or regulatory authority; and(ii) collect and/or receive and/or take other necessary or appropriate action in
relation to any payment or distribution in respect of China Connect
Securities (whether pursuant to a stock dividend, bonus issue, sharesubdivision or reorganisation, capitalisation of reserves or otherwise).
You acknowledge that we may re-deliver to you or to your usual custodian, at
such time as we may determine in our absolute discretion, any China Connect
Securities which have not been utilised by us in the settlement of any
transaction on your behalf. You acknowledge that we may, within one trading
day of receipt, deliver or pay to you or your usual custodian or bank (net of any
fees or other expenses payable by you to us) any distribution or payment
received by us in respect of China Connect Securities for your account. You will,promptly on our request, give such instructions (to us and/or your usual
custodian and/or any other person) as we may require to pre-authorise any
such re-delivery or payment.
In circumstances where we have not, after using reasonable endeavours, beenable to (a) re-deliver to you or to your usual custodian or bank any such China
Connect Securities, or (b) deliver or pay to you or your usual custodian any
such distribution or payment, including, for example, and without limitation,
where (a) you fail to provide such instructions upon our reasonable request
and/or (b) your usual custodian refuses to accept any such delivery of China
Connect Securities or payment, you authorise us in our absolute discretion tosell, liquidate or otherwise dispose of the relevant China Connect Securities andto transfer the sale, liquidation and/or disposal proceeds and/or any distribution
or payment to your usual bank account or, if there is no bank account, to an

China Connect July 2022
15

12.4.8

account established for you by us with a third party bank selected by us in ourabsolute discretion pending instructions for payment to your preferred account.
We shall have no obligation whatsoever to collect or receive or take any otheraction (including attending any general meeting and/or exercising any voting
rights) in relation to any payment or distribution in respect of China Connect
Securities for your account or to notify you of the existence of or the terms ofany notice, circular, report, announcement or similar corporate action in respectof China Connect Securities. You acknowledge that in certain circumstances,including, without limitation, as a result of any China Connect Laws or China
Connect Rules, it may be difficult, impracticable or impermissible for HKSCC or
its nominee (and for us or you) to exercise any rights or entitlements or toparticipate in any actions, transactions or other matters in respect of China
Connect Securities. If we make any such collection or receipt, take any suchaction or give you any such notification or take any action pursuant to any such
notification, we shall not have:(i) any liability in respect of any inaccuracies or delays; and (ii)any obligation to continue or repeat any such action.

12.5 Pooling/sub-custodians/clearance systems
12.5.1

12.5.2

We may pool China Connect Securities and treat them as fungible with the same
China Connect Securities of other clients. We may at any time allocate
equivalent China Connect Securities to you and shall not be bound to return to
you the original China Connect Securities delivered to us.
We may deposit China Connect Securities with any sub-custodian or with any
clearance system as required by law, regulation or market practice, and are notresponsible for performance by or monitoring of any sub-custodian or by any
clearance system or its practices. In addition, we shall not be liable for any act
or omission by, or the insolvency of, any clearance system. In the event you
incur a loss due to the negligence, wilful default, or insolvency of any clearance
system, we will make reasonable endeavours, in our discretion, to seek
recovery from the relevant clearance system, but we will not be under any
obligation to institute legal proceedings, file any proof of claim in any insolvency
proceeding, or take any similar action.

12.6 Confirmations by you
12.6.1

You confirm that during the subsistence of these China Connect Terms:(i) you have authority to deposit and hold China Connect Securities in the
Custody Account and there is no claim or encumbrance that will or may
adversely affect any delivery of China Connect Securities; and(ii) if you act as an agent for any of your own customers, whether or not
expressly identified to us at any time, no such customer shall be or beconsidered a customer or indirect customer of us, and your obligations
under these China Connect Terms are as principal.
12.6.2 You will, promptly on our request, execute such documents and do such acts andthings as we may require in order to perform our obligations under these China
Connect Terms or otherwise to comply with the China Connect Rules or China
Connect Laws.
12.7 Custodial duties and liabilities
12.7.1 We shall have only those duties expressly provided in these China Connect Terms.
We shall have no fiduciary duties or other implied duties or obligations
whatsoever.
12.7.2The performance by us of our duties is subject to:(i) all relevant local laws, regulations, decrees, orders and government acts;
China Connect July 2022
16

12.7.3

12.7.4(ii) the rules, operating procedures and practices of any relevant stock
exchange, clearance system or market; and(iii) any event or circumstance beyond our reasonable control.
In respect of any custodial services described in this Clause:(i) we will not be liable for any loss or damage suffered by you unless such loss
or damage results from our negligence, wilful misconduct or fraud;(ii) we shall not be liable for consequential loss or damage (including, without
limitation, lost profits) in any circumstances, whether or not foreseeable
and regardless of the type of action in which such a claim may be brought,with respect to the Custody Account or our services hereunder; and(iii) in the case of negligence or wilful misconduct our liability shall not exceed
the replacement cost or the market value of the relevant China Connect
Securities at the relevant time (whichever is lower).
We may establish cut-off times for receipt of instructions. If we receive an
instruction after an established cut-off time, we may regard the instruction as
having been received on the following Trading Day and act on it accordingly.

12.8 Interest
No interest will be payable on your Custody Account.
12.9 LienIn addition to any other remedy we may have, we shall have a continuing general lien on
all China Connect Securities held for you or your account, for all amounts due or owing by
you to us.
13.

Client Information

13.1 Retention of records: if you instruct us to effect a Northbound transaction in China Connect
Securities on behalf of your client (a “Client Transaction”), you shall retain for a periodof not less than 20 years (or such other period as we may instruct you in accordance with
China Connect Laws or China Connect Rules) records of any client instructions and accountinformation in relation to the Client Transaction (such records the “Client Information”).
13.2 Your client acting as intermediary: if you instruct us to effect a Client Transaction and you
are aware that your client is acting as an intermediary (either directly or indirectly throughother intermediaries) for another person who is the beneficial owner of the Client
Transaction, you undertake and confirm that you have arrangements in place:
13.2.1 requiring your client to retain or procure the retention of the Client Information in
relation to the beneficial owner of the Client Transaction for the period specified
in Clause 13.1; and13.2.2 which entitle you to obtain and disclose the Client Information in relation to thebeneficial owner upon request and within the required timeline specified by us,
or procure that it be so obtained and disclosed.
12.3 Disclosure of information to China Connect Authority: If we receive an enquiry fromany China Connect Authority in relation to a Client Transaction, you shall, uponrequest and within the time limit specified by us, disclose to us or to the relevant
China Connect Authority the Client Information or procure such disclosure, in
relation to the beneficial owner of the Client Transaction.
14.

Taxation

14.1 In addition and without prejudice to any of our rights under the Existing Terms, you will
indemnify us and any Related Persons (together, the “Indemnified Parties”) on a fullindemnity basis against any Taxes of whatever nature that are incurred by, assessed on
China Connect July 202217

or imposed upon any Indemnified Parties by any China Connect Authorities and/or theState of Administration of Tax of Mainland China at any time in connection with any
purchase, sale or closing out of any orders/transactions entered into by us as agent on
your behalf.
14.2 You shall be responsible for paying all Taxes, and you shall be required to comply with any
filing or registration obligations, in each case as may be required under any China Connect
Laws or China Connect Rules relating to any China Connect Securities and any dividends
or entitlements in respect of such China Connect Securities.
14.3 In the event we are required under China Connect Laws or China Connect Rules to pay any
Taxes, we may notify you whenever necessary and request that you provide us with
relevant information as we may deem necessary to fulfill our obligations. You must provide
to us, promptly on such request, such information and documents such as but not limited
to costs of your purchase of the China Connect Securities, your and/or any underlying
beneficial owner’s tax status or residence. We may withhold or deduct relevant Taxes fromany amount due to you and you will remain liable for any shortfall.
14.4 In the event we do not receive any requested information from you within a reasonable
period of time to fulfill our obligations, we shall be forthwith entitled in our absolute
discretion, without further notice or demand to you, to satisfy any obligation of us or you
to pay or account for any amounts in respect of any Taxes by selling, realizing or otherwise
dealing with, in such manner as we in our absolute discretion may determine, all or partof any property held by us for any purpose in any of your accounts held with us, and to
apply the proceeds in reduction of all or part of your liability to any tax authority or us.
14.5 We shall have no responsibility to verify the accuracy of the information provided by you
and are entitled to rely on such information to fulfil our obligations.
14.6 We shall have no liability whatsoever for the lack of any tax relief, or any failure to obtain
the benefit of any tax credit.
14.7 In the event that we provide custody services to you, you acknowledge and agree that wereserve the right to deduct or withhold from any payment to you, amount equivalent to
all Taxes of whatever nature (including without limitation any provision for withholding
income or business tax on capital gain) that are incurred by, assessed on or imposed upon
any Indemnified Parties by any China Connect Authorities and/or the State of
Administration of Tax of Mainland China at any time in connection with any purchase, saleor closing out of any orders/transactions entered into by us as agent on your behalf.
15.

Miscellaneous

15.1 You will execute any further documents and provide any materials and/or information as
we may reasonably request to enable us to perform our duties and obligations under these
China Connect Terms which we deem necessary as and when the China Connect Laws or
the China Connect Rules are amended or supplemented from time to time.
15.2

You will provide all information (including translations into Chinese, if required) to us
which we request if such information is requested by any China Connect Authority, any
China Connect Entity or any exchange, regulatory authority or any organisation (whether
within or outside Hong Kong) with which HKEx or the SEHK has entered into an information
sharing arrangement or agreement. You acknowledge that, your failure to comply withthis provision may, amongst other things, result in a suspension of China Connect services
to you.

15.3 We reserve the right to vary any of the terms of these China Connect Terms in accordancewith the Terms of Business.
China Connect July 2022
18

SEHK Rule 569B

SCHEDULE: RISK DISCLOSURES AND OTHER INFORMATIONSEHK Rules
14A10(2) and
14B10(2)This Schedule describes some of the key risk factors and other information concerning China
Connect. This Schedule does not disclose all the risks and other significant aspects of NorthboundTrading through China Connect. You should ensure that you understand the nature and risks of
China Connect and Northbound trading and you should consider carefully (and consult your own
advisers where necessary) whether trading in China Connect Securities is suitable for you in lightof your circumstances. The decision to trade in China Connect Securities is yours, but you should
not trade in China Connect Securities unless you fully understand and are willing to assume therisks associated with China Connect and are able to comply with all relevant China Connect Laws
and China Connect Rules. You acknowledge the risks and agree to the terms set out in thisSchedule. You are responsible for monitoring changes in the China Connect Laws and China
Connect Rules and complying with any new requirements.
We do not represent that the information set out in this Schedule is up to date, and do notundertake to update the information set out in this Schedule. In addition, we do not provide any
warranty with respect to such information and no such information is to be construed as legal,financial or tax advice of any kind by us.
Home Market Rules
1

Home Market Rules

A fundamental principle of China Connect is that the laws and rules of the home market of theapplicable securities shall apply to investors in such securities. In respect of China Connect
Securities, Mainland China is the home market and thus the general principle is that investors in
China Connect Securities should observe the SSE Rules and/or the SZSE Rules (as the case maybe) and other Mainland China securities laws and regulations. If such rules and regulations arebreached, the relevant China Connect Market has the power to carry out an investigation.
Nevertheless, certain Hong Kong legal and regulatory requirements will also continue to apply to
Northbound trading.
Trading and Settlement Restrictions
2

Pre-Trade Checking

SEHK is required to check all the Northbound sell orders either (i) on the stock account(s) at the
Exchange Participant level or (ii) if you have opened an SPSA (including any Mapped SPSA) with
one or more Custodian Participants, on the relevant SPSA and/or Mapped SPSA, to ensure there
is no overselling in excess of the stock holding in the relevant account. Such Pre-Trade Checking
will be carried prior to the start of each Trading Day.
For a client who places an SPSA Sell Order and/or Master SPSA Sell Order, the above mentioned
Pre-Trade Checking will be carried out on the relevant SPSA and/or the Mapped SPSAs. HKSCC
will determine the number of China Connect Securities in each SPSA and/or the Mapped SPSAs
prior to the start of each Trading Day, which will serve as the limit for the amount of sell ordersthat may be executed in relation to each SPSA and/or the Mapped SPSA for that day. If there has
been a failure (for whatever reason) to deliver China Connect Securities from the SPSA and/or
the Mapped SPSAs to settle a sell order, HKSCC may deduct those China Connect Securities fromthe balance of China Connect Securities available for selling from that SPSA and/or the Mapped
SPSAs on subsequent Trading Days, notwithstanding the actual China Connect Securities balanceof that SPSA and/or the Mapped SPSAs.
China Connect July 202219

Accordingly, you may be unable to execute Northbound sell orders due to Pre-Trade Checking
related requirements. Your attention is drawn to the provisions set out in Clause 8 of the China
Connect Terms. Note in particular that you may be unable to execute a sell order of China Connect
Securities if (i) there has been a delay or failure for whatever reason in the transfer of the relevant
China Connect Securities to any clearing account of us or (ii) (in respect of an SPSA Sell Order
and/or Master SPSA Sell Order) there is not sufficient China Connect Securities in the relevant
SPSA and/or the Mapped SPSAs, even if you have additional China Connect Securities in another
SPSA and/or another Mapped SPSA mapped to a different Master SPSA ID, if for any other reason
we consider that there is or may be non-compliance with any China Connect Laws or China
Connect Rules.
Any risk, loss or cost resulting from non-compliance or potential non-compliance with Pre-Trade
Checking and/or the relevant China Connect Laws or China Connect Rules shall be borne by you.
Furthermore, we may act as executing broker for other clients in addition to you in relation to the
China Connect Securities. If any other such client fails to deliver sufficient China Connect
Securities to us or our Clearing Participant to ensure timely settlement of that client’s SPSA Sell
Order and/or Master SPSA Sell Order, we or our Clearing Participant may have an overdue shortstock position in the relevant China Connect Securities, resulting in all of our settlement
instructions in CCASS for delivery of the same China Connect Securities to be put on hold by
HKSCC pending resolution of the shortfall. While such settlement instructions are placed on hold,there may be a delivery failure in respect of your SPSA Sell Orders and/or Master SPSA Sell Orderin respect of the same China Connect Securities.
3

Settlement

Northbound trades will follow the settlement cycle of the relevant China Connect Market. For
settlement of China Connect Securities trades, ChinaClear will debit or credit the securities
accounts of its participants (including HKSCC as clearing participant) on T day free of payment.
We may have settlement arrangements in place different from the ChinaClear settlement
arrangements. Unless we agree, in our absolute discretion, to settle funds with you prior to us
receiving the corresponding funds from HKSCC in settlement of a trade on your behalf, settlementof funds relating to such trading will be effected on T+1 day. In the event that we are required
to settle funds with you prior to us receiving the corresponding funds from HKSCC in settlementof a trade on your behalf, you agree that, (a) we shall retain the funds received from the HKSCC
on T+1 day; and (b) you shall reimburse us an amount equal to the amount we have paid you
minus the amount we received from the HKSCC if it’s more than zero. In event we do not receive
funds from the HKSCC on T+1, you agree to reimburse us the whole amount of such funds we
had paid you within reasonable time of demand as we may in our absolute discretion specify, andyou shall be responsible to us for any loss, costs, fees and expenses incurred by us in connection
with such settlement.
Although the transfer of the China Connect Securities precedes the transfer of cash, under the
China Connect Service, the title to China Connect Securities will not be released until the receipt
of confirmation of payment. Accordingly, for purposes of contract notes, the settlement datewould be T+1 day when both the securities and the cash are settled or, where we settle fundswith HKSCC prior to us receiving the corresponding funds from you in settlement of the purchasetrade on your behalf, the settlement date would be the date on which the securities are released.
You acknowledge that there is no guarantee that we will settle funds with HKSCC prior to us
receiving the corresponding funds from you in settlement of a purchase trade on your behalf andthat if we decide to make such prior settlement of funds, we may decide to terminate such service
at any time. You agree to reimburse us the whole amount of such funds we have paid to HKSCC
within reasonable time of demand as we may in our absolute discretion specify, and you shall be
responsible to us for any loss, costs, fees and expenses incurred by us in connection with such
settlement.
China Connect July 2022
20

You acknowledge that there is no guarantee that we will offer settlement arrangements different
from the ChinaClear settlement arrangements and that if we decide to offer different settlement
arrangements, we may decide to terminate such service at any time.
4

Quota Restrictions

Purchases of China Connect Securities through China Connect are subject to certain quota
controls as described below. As a result, there is no assurance that a buy order can be successfully
placed through China Connect.
There is a daily quota that limits the maximum value of all Northbound buy trades in respect ofeach China Connect Market that can be executed by Exchange Participants on each Trading Day(“Daily Quota”). The Daily Quota may change from time to time without prior notice andinvestors are advised to refer to the HKEx website and other information published by the HKEx
for up-to-date information.
The SEHK and the relevant China Connect Market may also set pricing and other restrictions on
buy orders in order to prevent the artificial use or filling of the Daily Quota.
If there is a restriction, rejection or suspension of Northbound buying (which would include anyorder that has been accepted but not yet executed) as a result of a breach of the Daily Quota or
the relevant pricing and other restrictions, we will be unable to carry out any buy orders and any
instruction to buy submitted but not yet executed will be restricted or rejected.

SEHK Rules
14A07(12),14B07(8) and1428

Conversely, under the SEHK rules, investors may sell their China Connect Securities regardlessof whether there is a breach of the Daily Quota.
5

Restriction on Day Trading

Day (turnaround) trading is not permitted on the China Connect Markets. If you buy China
Connect Securities on T day, you may be able to sell the shares only on or after T+1 day. Due to
Pre-Trade Checking related requirements, we may accept an instruction to sell China Connect
Securities that were bought on T day only on or after the applicable cut-off time (as notified to
you by us from time to time) on T+1 day.
6

No off-exchange trading and transfers
SEHK Rules

You, we and any Related Person shall not, with certain limited exceptions, trade or provide
services to facilitate trading of any China Connect Securities otherwise than through the China
Connect Market System, and we shall not match, execute or arrange the execution of any saleand purchase instructions or any transfer instructions from you or effect any Non-trade Transfer
or settlement of instructions in respect of any China Connect Securities in any manner otherwise
than through China Connect in accordance with the China Connect Rules, except in the following
circumstances or as otherwise provided by a relevant China Connect Authority:(a)stock borrowing and lending of China Connect Securities which are eligible for covered
short selling and with a tenor of no more than one month;(b)stock borrowing and lending of China Connect Securities which are eligible for satisfying
the Pre-trade Checking requirement with a tenor of one day (and which is not renewable);(c)post-trade allocation of China Connect Securities by a fund manager across the funds
and/or sub-funds it manages; and(d)any other situations specified by the relevant China Connect Market and ChinaClear,
including but not limited to any Non-trade Transfer as a result or for the purpose of (i) succession,(ii) divorce, (iii) dissolution, liquidation or winding up of any company or corporation, (iv) donation
China Connect July 2022
21

14A12 and
14B12

to a charitable foundation; and (v) assisting in any enforcement action or proceedings of any
court, prosecutor or law enforcement agency.
7

Placing Orders

Only limit orders with a specified price are allowed pursuant to China Connect Laws and China
Connect Rules, whereby buy orders must not be lower than at the current best price and sellorders may be executed at or higher than the specified price. Market orders will not be accepted.
8China Connect Market Price Limits

China Connect Securities are, depending on the type of China Connect Securities, subject tocertain different price limits based on the previous Trading Day’s closing price as set out in the
China Connect Laws and/or the China Connect Rules. The price limit may be changed from time
to time and you are advised to refer to the HKEx website and other information published by the
HKEx for up-to-date information on such price limit. All orders in respect of China Connect
Securities must be within the relevant price limit. Any orders with a price beyond the price limit
will be rejected by the relevant China Connect Market.
9

Delisting of companies listed on a China Connect Market

According to the SSE Rules and the SZSE Rules, if any company listed on any China Connect
Market (other than a company listed on the ChiNext board) is in the delisting process, or its
operation is unstable due to financial or other reasons such that there is a risk of being delisted
or exposing investors’ interest to undue damage, such company will be earmarked and traded on
the risk alert board. Any change to the risk alert board may occur without prior notice. Investors
will only be allowed to sell such China Connect Security and are restricted from further buying ofsuch China Connect Security. For details concerning the risk alert board, please refer to the SSE
Rules, SZSE Rules and any other relevant sources from time to time.
10

Account Information of Beneficial Owner

The identity of the beneficial owner of China Connect Securities which are the subject of a sellorder may need to be disclosed to HKSCC and/or relevant Mainland China authorities.
11

No Manual Trade or Block Trade

There will be no manual trade facility or block trade facility for Northbound trading under China
Connect.
12

Amendment of Orders and Loss of Priority

Consistent with the current practice in Mainland China, if an investor engaged in Northboundtrading wishes to amend an order, the investor must first cancel the original order and then input
a new one. Accordingly, order priority will be lost and, subject to the Daily Quota balance
restrictions, the subsequent order may not be filled on the same Trading Day.
13

Special China Connect Securities

SEHK will accept or designate securities which cease to meet the eligibility criteria for China
Connect Securities as Special China Connect Securities (provided that they remain listed on therelevant China Connect Market). In addition, any securities or options (which are not ‘eligible for
China Connect trading’) received by you as a result of any distribution of rights or entitlements,
conversion, takeover, other corporate actions or abnormal trading activities will be accepted ordesignated by SEHK as Special China Connect Securities. You will only be able to sell, but notbuy, any Special China Connect Securities.
China Connect July 2022
22

Mainland China and Hong Kong Legal Issues
14

Disclosure of Interests
SEHK Rules

Under Mainland China laws, rules and regulations, if you hold or control shares (on an aggregate
basis, i.e., including both domestically and overseas issued shares of the same Mainland China
Listco (as defined below), whether the relevant holdings are through Northbound trading,
QFII/RQFII regime or other investment channels) in a Mainland China incorporated company
which is listed on a Mainland China stock exchange (a “Mainland China Listco”) above a certain
threshold as may be specified from time to time by the relevant China Connect Authorities, youmust disclose such interest within the period specified by the relevant China Connect Authority,and you must not buy or sell any such shares within the period specified by the relevant China
Connect Authority. You must also disclose any substantial change in your holding as required by
the relevant China Connect Authority.

14A09 and
14B09

Where a Mainland China incorporated company has both H Shares listed on the SEHK and A
Shares listed on a China Connect Market, if an investor is interested in more than a certain
threshold (as may be specified from time to time) of any class of voting shares (including A
Shares purchased through China Connect) in such Mainland China incorporated company, theinvestor is under a duty of disclosure pursuant to Part XV of the SFO. Part XV of the SFO does
not apply where the Mainland China incorporated company has not listed any shares on the SEHK.
It shall be your responsibility to comply with any disclosure of interest rules from time to time
imposed by the relevant China Connect Authorities and arrange for any relevant filings.
15

Short Swing Profit Rule

Under Mainland China laws, rules and regulations, the “short swing profit rule” requires you togive up/return any profits made from purchases and sales in respect of China Connect Securities
of a particular Mainland China Listco if (a) your shareholding in that Mainland China Listco exceeds
the threshold prescribed by the relevant China Connect Authority from time to time and (b) the
corresponding sale transaction occurs within the six months after a purchase transaction, or viceversa. You (and you alone) must comply with the “short swing profit rule”.
16

Foreign Ownership Limits
SEHK Rules

Under Mainland China laws, rules and regulations, there is a limit to how many shares a single
foreign investor is permitted to hold in a single Mainland China Listco, and also a limit to the
maximum combined holdings of A-Shares of all foreign investors in a single Mainland China Listco.
Such foreign ownership limits may be applied on an aggregate basis (i.e. across both domesticallyand overseas issued shares of the same issuer, whether the relevant holdings are throughNorthbound Trading, QFII/RQFII regime or other investment channels). It shall be yourresponsibility to comply with all foreign ownership limits from time to time imposed by China
Connect Laws and China Connect Rules. Such legal and regulatory restrictions or limitations may
have an adverse effect on the liquidity and performance of an investment in China Connect
Securities due to factors such as limitations on fund repatriation, dealing restrictions, adverse tax
treatments, higher commission costs, regulatory reporting requirements and reliance on servicesof local custodians and service providers. As a result, you may suffer losses through your trading
or investment in China Connect Securities.
If we become aware that you have breached (or reasonably believes that you may breach upon
execution of further Northbound buy orders) any foreign ownership limits, or if we are so requiredby any China Connect Authority, including, without limitation, as a result of any Forced-sale Noticeissued by the relevant China Connect Market, we will sell any China Connect Securities pursuant
to Clause 11 (Sale, Transfer and Disgorgement) above if you fail to comply with the corresponding
Client Forced-sale Notice in order to ensure compliance with all China Connect Laws and China
China Connect July 2022
23

14A08(02) and(3) and
14B08(2) and(3)

Connect Rules. In such case, no buy orders for the relevant China Connect Securities will be
accepted until the relevant China Connect Market informs its corresponding SEHK Subsidiary or
SEHK that the aggregate foreign shareholding has fallen below a certain percentage. SEHK may
determine in its absolute discretion which Exchange Participants and what quantity of China
Connect Securities should be subject to a Forced-sale Notice (this is likely to be on a “last-in,
first-out” basis), and SEHK’s (or the relevant SEHK Subsidiary’s) own records shall be final andconclusive.
Moreover, under Mainland China laws, where the aggregate holdings of foreign investors exceeds
a specified percentage (the “Cautionary Level”) of the issued shares of a single Mainland China
Listco, upon notification by the relevant China Connect Market to the SEHK Subsidiary, SEHK andthe relevant SEHK Subsidiary are required as soon as practicable thereafter to suspend accepting
China Connect Securities buy orders in respect of the relevant China Connect Securities. In suchcircumstances, we may reject your buy orders until the aggregate shareholding of foreign
investors has fallen below the specified percentage (the “Permitted Level”) as advised by therelevant China Connect Market.
SEHK Rules

As of the date of these China Connect Terms, the single foreign investor limit is set at 10% of
the shares of a Mainland China Listco and the aggregate foreign investor limit on A-Share holdings
is set at 30% of the shares of a Mainland China Listco (while the Cautionary Level and thePermitted Level are set at 28% and 26% respectively of the shares of a Mainland China Listco).
Such limits are subject to change from time to time and we shall not be under any obligation to
inform you of any such changes to foreign ownership limits.
17

Taxation

Prior to investing in China Connect Securities, you are strongly urged to consult your own tax
advisers and counsel with respect to the possible Hong Kong and/or Mainland China tax
consequences to you of such investment since such tax consequences may differ in respect ofdifferent investors.
You will be fully responsible for any Taxes in respect of China Connect Securities including, without
limitation, any capital gains tax or other Mainland China taxes, and will indemnify us and any
Related Person from and against all Hong Kong and/or Mainland China Taxes which we or Related
Persons may incur arising in connection with any China Connect Securities which you hold, tradeor otherwise deal in.
We assume no responsibility for advising on or handling any tax issues, liabilities and/or
obligations in connection with China Connect, nor will we provide any service or assistance in thisregard.
18

Insider Dealing, Market Manipulation and Other Market Conduct Rules

Northbound trading through the China Connect will be subject to Mainland China laws andregulations prohibiting activities that constitute market manipulation, insider dealing and related
offences. The scope of these restrictions may not be the same as equivalent requirements underHong Kong law. In particular, defences applicable under Hong Kong market misconduct rules may
not be applicable under Mainland China laws and regulations. If you are unfamiliar with Mainland
China market conduct requirements and restrictions, you should seek specialist advice before
engaging in trading through the China Connect. You confirm that you are not in possession of
inside information when trading China Connect Securities or procuring others to do so.
19

Client Securities Rules

By way of brief background, the Client Securities Rules prescribe how client assets are to be dealt
with by all intermediaries and their associated entities. However, as the China Connect Securities
China Connect July 2022
24

14A08(02) and(3) and
14B08(2) and(3)

traded through China Connect are not listed or traded on the SEHK, the Client Securities Rules
will not apply unless otherwise specified by the SFC or any other relevant China Connect Authority.
20

Investor Compensation Fund

Trading in China Connect Securities does not enjoy the protection afforded by the Investor
Compensation Fund established under the SFO. Accordingly, when you trade in China Connect
Securities, unlike the trading of SEHK-listed securities, you will not be covered by the Investor
Compensation Fund in respect of any loss you may sustain by reason of a default by SFC licensed
or registered persons.
21

Ownership of China Connect Securities

Hong Kong law recognises the proprietary interest of investors in shares held for them by theirbroker or custodian in CCASS. Such recognition should apply equally to China Connect Securities
held for Hong Kong and overseas investors by the Clearing Participant through HKSCC. In addition,in Mainland China (where China Connect Securities are registered in a securities account opened
with ChinaClear in the name of HKSCC), it is expressly stipulated in the CSRC China Connect
Rules that HKSCC acts as the nominee holder and the Hong Kong and overseas investors are thebeneficial owners of the China Connect Securities.
You should conduct your own review of the materials published by HKEX on China Connect inrelation to the ownership of China Connect Securities and the applicable China Connect Rules as
they may be amended and supplemented from time to time. You should also consult your own
legal advisers to make your own assessment of your rights as a Northbound investor in China
Connect Securities.
Under the rules of CCASS, HKSCC is prepared to provide assistance to the beneficial owners ofChina Connect Securities where necessary. HKEx notes that any beneficial owner who decides totake legal action in respect of China Connect Securities held for them by the Clearing Participant
through HKSCC is responsible for seeking its own independent legal advice to satisfy itself andHKSCC that a cause of action exists and the beneficial owner should be prepared to conduct theaction and take up all costs in relation to the action, including providing HKSCC with indemnities
and legal representation in proceedings. Further details are set out in the HKEx publishedmaterials.
Clearinghouse Risk
22

Risk of ChinaClear Default

ChinaClear has established a risk management framework and measures that are approved andsupervised by the CSRC. If ChinaClear (as the host central counterparty) defaults, HKSCC has
stated that it may (but shall have no obligation to) take any legal action or court proceeding toseek recovery of the outstanding China Connect Securities and monies from ChinaClear throughavailable legal channels and through ChinaClear’s liquidation process, if applicable. As ChinaClear
does not contribute to the HKSCC guarantee fund, HKSCC will not use the HKSCC guarantee fundto cover any residual loss as a result of closing out any of ChinaClear’s positions. HKSCC will inturn distribute the China Connect Securities and/or monies recovered to clearing participants on
a pro-rata basis as prescribed by the relevant China Connect Authorities. We in turn will be
distributing China Connect Securities and/or monies to the extent recovered directly or indirectlyfrom HKSCC. Although the likelihood of a default by ChinaClear is considered to be remote,investors should be aware of this arrangement and of this potential exposure before engaging inNorthbound trading.
23

Risk of HKSCC Default

China Connect July 2022
25

Our provision of services pursuant to these China Connect Terms also depends upon theperformance by HKSCC of its obligations. Any action or inaction of the HKSCC or a failure or delayby the HKSCC in the performance of its obligations may result in a failure of settlement of China
Connect Securities and/or monies in connection with them and you may suffer losses as a result.
Neither we nor any Related Person shall have any responsibility or liability for any such losses.
24

Scripless Securities

China Connect Securities are traded in scripless form and accordingly, China Connect Securities
may not be physically deposited into and/or withdrawn from CCASS.
Other Operational Issues
25

Company Announcements on Corporate Actions

Any corporate action in respect of China Connect Securities will be announced by the relevant
issuer through the SSE website and/or SZSE website (as the case may be) and certain appointed
newspapers. HKSCC will also record all corporate actions relating to China Connect Securities in
CCASS and inform its clearing participants of the details via the CCASS terminals as soon aspracticable on the announcement date. Investors engaged in Northbound trading may refer tothe SSE website and/or the SZSE website (as the case may be) and the newspapers and websites
officially appointed from time to time or, alternatively, the HKEx website’s China Stock Markets
Web (or such other replacement or successor web page from time to time) for corporate actions
in respect of China Connect Securities issued on the previous trading day. Investors should notethat (i) issuers that are listed on the China Connect Markets publish corporate documents in
Simplified Chinese only, and English translations will not be available and (ii) issuers listed on the
ChiNext board are required to publish certain corporate announcements on their corporatewebsites and the officially appointed websites only.
In addition, HKSCC will endeavour to collect and distribute cash dividends relating to China
Connect Securities to clearing participants in a timely manner. Upon receipt of the dividend
amount, HKSCC will to the extent practicable arrange to distribute to relevant clearing
participants on the same day.
Unlike the current practice in Hong Kong in respect of SEHK-listed shares, investors engaged in
Northbound trading may not be able to attend shareholder meetings by proxy or in person.
We do not and cannot ensure the accuracy, reliability or timeliness of any company
announcements of corporate actions and neither we nor any Related Person accept any liability(whether in tort or contract or otherwise) for any loss or damage arising from any errors,
inaccuracies, delays or omissions or any actions taken in reliance thereon. We expressly disclaim
all warranties, expressed or implied, as to the accuracy of any company announcement or as tothe fitness of the information for any purpose.
26

Average Pricing across Funds for Fund Managers

If you act as a fund manager for more than one fund or an asset manager on behalf of more than
one client and you pre-allocate China Connect orders across such funds or clients which you
manage, we may offer Average Pricing for such orders notwithstanding such orders may be
executed at different times during the same Trading Day. Where Average Pricing applies, eachfund or client will be allocated China Connect Securities (or their proceeds) at the same averaged
price, which may be higher or lower than the price which such fund or client would have paid or
received had the orders been processed individually and in the order submitted directly or
indirectly to us. Neither we nor any Related Person will be responsible for any such differences inpricing or any loss or risk arising from the application of Average Pricing.

China Connect July 2022
26

27

Disclosure of Information and Publication of Trade Information

SEHK may require us to provide information on your profile, and the type and value of your orders
in relation to Northbound trading of China Connect Securities and the trades which we executedfor you at such intervals and in such form as SEHK may specify from time to time for purposesof the publication, dissemination or public distribution of aggregated information in respect ofChina Connect Securities trades under China Connect, trading volumes, investor profiles andother related data. SEHK may forward such information to the relevant China Connect Market forsurveillance and investigation purposes.
28

Client Error

Neither we nor any Related Person shall be liable for any loss, damage or expense orconsequential loss, damage or expense suffered by an investor as a result of any trading basedon the investor’s instructions. We will not be able to unwind any trade, and investors should also
take note of the settlement arrangements in respect of China Connect Securities under China
Connect, including but not limited to quota restrictions.
The China Connect Rules generally prohibit any off-exchange trading or transfers. Howevertransfers may be permitted between you and us to rectify a trade in limited circumstances,although there is a lack of clarity as to the circumstances in which such transfers may bepermitted. We shall have absolute discretion to determine whether to conduct any transfer torectify any error trade and shall have no obligation to do so. Neither we nor any Related Person
shall have any liability for any losses which may result directly or indirectly from such errors or
any refusal to conduct a transfer to correct an error trade.
29

Retention of Information

You acknowledge and accept that we will be required under the China Connect Rules to keep
records for a period of no less than 20 years of (a) all orders and trades executed on your behalf,(b) any instructions received from you; (c) your account information in relation to Northboundtrading; and (d) all relevant information concerning margin trading and stock borrowing andlending of any China Connect Securities (including, without limitation, in respect of any suchmargin trading, the relevant securities margin trading arrangement and the funds provided.
30

China Connect Market System

SEHK or the relevant SEHK Subsidiary (after consulting with SEHK) may, under certain
circumstances as specified in the SEHK rules and/or whenever the SEHK determines that it isappropriate and in the interest of a fair and orderly market to protect investors, temporarilysuspend or restrict all or part of the order-routing and related supporting services with regard to
all or any Northbound trading of China Connect Securities, and for such duration and frequency
as SEHK may consider appropriate. You will not be able to buy or sell China Connect Securities
on SEHK through China Connect during any period in which trading of China Connect Securities
is suspended. In particular, you should note that while trading of China Connect Securities issuspended by the SEHK, trading of such China Connect Securities may continue on the relevant
China Connect Market. You may remain exposed to fluctuations in the price of China Connect
Securities caused by trading on the relevant China Connect Market during the period when tradingof such China Connect Securities is suspended by SEHK.
SEHK has absolute discretion to change the operational hours and arrangements of the China
Connect Service at any time and without advance notice, whether on a temporary basis, due tooperational needs, inclement weather, under emergency situations or otherwise. Moreover, SEHK
or the relevant SEHK Subsidiary (with the agreement of SEHK) may cease the provision of the
China Connect Northbound trading service permanently.

China Connect July 2022
27

Such suspension, restriction or cessation will affect our ability to accept and process your orders
and you are advised to refer to the HKEx website and other information published by the HKEx
for up-to-date information. There can be no assurance that your orders will be accepted orprocessed, notwithstanding that China Connect Securities may be traded through other channels
including, without limitation, by Mainland China investors on the relevant China Connect Market.
Further, the SEHK rules state that where any H Shares with corresponding A Shares eligible as
China Connect Securities are suspended from trading on SEHK, but the corresponding A Sharesare not suspended from trading on the relevant China Connect Market, the service for routing the
China Connect sell orders and China Connect buy orders for such A Shares to the relevant China
Connect Market for execution will normally remain available. However, SEHK may, in its discretion,
restrict or suspend such service without prior notice and your ability to place sell orders and buy
orders may be affected.
The China Connect Market System is a platform for trading of China Connect Securities under
China Connect. We provide trading services based on the China Connect Market System which isoperated by the relevant China Connect Market. We are not responsible for any delay or failurecaused by any China Connect Market System and investors accept all risks arising from trading
China Connect Securities through any China Connect Market System. Neither we nor any Related
Person shall be responsible or held liable for any loss or damage directly or indirectly suffered by
you arising from or in connection with the China Connect Service or the CSC through Northboundtrading including, without limitation, the following:(a)a suspension, restriction or cessation of the China Connect Service or the CSC, or any
inability to access or use the CSC or the China Connect Service;(b)
any special arrangement put in place or any action, step or measure taken or not taken
to deal with an emergency or contingencies including but not limited to the cancellation of
any or all China Connect orders input by Exchange Participants;(c)
any suspension, delay, interruption or cessation of trading of any China Connect Securities
on the relevant China Connect Market;(d)
any delay, suspension, interruption or order cancellation of any China Connect Securities
as a result of the hoisting of a Typhoon Signal No.8 or above or the issuance of the Black
Rainstorm Warning in Hong Kong;(e)any delay or failure to route any China Connect orders or any delay or failure to send any
order cancellation requests or to provide the China Connect Service due to any system,
communication or connection failure, power outage, software or hardware malfunction orother events beyond our control or the control of SEHK, us or a Related Person;(f)
any China Connect order which a China Connect Exchange Participant has requested to becancelled not being cancelled for any reason whatsoever;(g)in the event that SEHK or the relevant China Connect Market requires that we reject anyorder for China Connect Services;(h)any delay, failure or error of any China Connect Market System or any system upon which
we, the relevant SEHK Subsidiary or a Related Person is reliant in providing the China
Connect Service; and(i)any delay or failure to execute, or any error in matching or executing, any China Connect
order due to reasons beyond the control of SEHK, HKEx, the relevant SEHK Subsidiary, usor any Related Person, including but not limited to any action or decision taken or made,or not taken or made, by any China Connect Authority or any other relevant governmental
or regulatory body.
If there is a delay or failure to send order cancellation requests in any circumstance described inparagraph (e) above, you shall, in the event such order is matched and executed, remain
responsible for fulfilling any settlement obligations in respect of such transaction.
You acknowledge that HKEx, SEHK, the SEHK Subsidiaries, the China Connect Markets,
subsidiaries of the China Connect Markets and their respective directors, employees and agentsare not responsible or held liable for any such losses.
China Connect July 2022
28

31

Operational Hours

SEHK has absolute discretion to determine from time to time the operational hours of the China
Connect service, and will have absolute discretion to change the operational hours andarrangements of the China Connect service at any time and without advance notice whether ona temporary basis or otherwise. We shall not be under any obligation to inform you of any suchdeterminations by the SEHK as to the operational hours of the China Connect service.
Where, for example, there is any price sensitive information relating to a Mainland China Listco
during a time when China Connect Service is not in operation, the A Shares of the Mainland China
Listco may continue to trade on the relevant China Connect Market and the price of such A Shares
may move significantly. In such case, Northbound investors will not be able to trade in suchshares until the next available Trading Day under China Connect.
32

Margin Trading

Following are some key risk factors and/or other information concerning margin trading of China
Connect Securities, where we have informed you of our consent to providing margin trading
services on China Connect Securities.
Subject to certain conditions prescribed by the China Connect Authorities, Hong Kong andoverseas investors may conduct margin trading in China Connect Securities determined by therelevant China Connect Authorities to be eligible for margin trading (“Eligible Margin Trading
Securities”). The HKEx will from time to time publish a list of Eligible Margin Trading Securities.
A China Connect Market may suspend margin trading activities in any specific A Share and/or
ETF if the volume of margin trading activities in such A Share and/or ETF exceeds a thresholddetermined by such China Connect Market and resume margin trading activities when the volume
of margin trading drops below a prescribed threshold. Where the SEHK is notified by the relevant
China Connect Market that a suspension or resumption involves a security on the list of Eligible
Margin Trading Securities, the HKEx will disclose such information on its website. In suchcircumstances, any margin trading (except for margin trading in respect of China Connect
Securities buy orders) in the relevant China Connect Security shall be suspended and/or resumed
accordingly. The relevant China Connect Market reserves the right to acquire at some future date
for margin trading orders to be flagged when routed to China Connect. Neither we nor any Related
person shall have any obligation to update you in respect of the list of Eligible Margin Trading
Securities or any restrictions or suspensions in respect of margin trading from time to time.
33

Rights Issuances

Where you receive any form of entitlement security from the issuer of a China Connect Security,
if such entitlement security:(a)
is a China Connect Security, you will be permitted to buy and sell the entitlement security
through China Connect;(b)
is not a China Connect Security but is a RMB denominated security listed on the a China
Connect Market, you may be allowed to sell the entitlement security through China
Connect but will not be permitted to buy such entitlement security;(c)
is a security listed on a China Connect Market but is not traded in RMB, you will not beallowed to buy or sell the entitlement security through China Connect; and(d)is not listed on a China Connect Market, you will not be allowed to buy or sell theentitlement security on China Connect unless and until appropriate arrangements (if any)
have been provided by HKSCC. It is possible that no such alternative arrangements will
be provided.

34

Odd Lot Trading
China Connect July 2022
29

SEHK Rule1415

Odd lot trading in China Connect Securities is available only for sell orders and all odd lots must
be sold in one single order. A board lot order may be matched with different odd lot sell orders,
resulting in odd lot trades. Board lot and odd lot orders are matched on the same platform on
China Connect and subject to the same share price. The maximum order size is 1 million sharesand the tick size is uniformly set at RMB0.01.
35

Short Selling

Covered short selling must satisfy the requirements specified by the relevant China Connect
Authorities, including that short selling orders are only in respect of China Connect Securities
designated as eligible for short selling, are appropriately flagged as such and that they are subject
to an uptick rule. Naked short selling of China Connect Securities is prohibited. The China Connect
Authorities may also suspend the ability to engage in short selling of any China Connect Security
if the volume of short selling activity exceeds thresholds prescribed by the relevant China Connect
Market. You will be fully responsible for understanding and complying with short selling
requirements as in effect from time to time and for any consequences of noncompliance.
36

Stock Borrowing and Lending

Following are some key risk factors and/or other information concerning stock borrowing andlending of China Connect Securities, where we have informed you of our consent to providing
stock borrowing and lending services on China Connect Securities.
Stock borrowing and lending will be permitted for eligible China Connect Securities for the purposeof (a) covered short selling and (b) satisfying the Pre-Trade Checking requirement. Stockborrowing and lending of eligible China Connect Securities will be subject to restrictions set by
SEHK and the relevant China Connect Market, including but not limited to the following:(a)stock borrowing and lending agreements for the purpose of covered short selling shallhave a duration of not more than one month;(b)stock borrowing and lending agreements for the purpose of satisfying the Pre-Trade
Checking requirement shall have a duration of not more than one day (and roll-over is not
permitted);(c)stock lending will be restricted to certain types of persons to be determined by the relevant
China Connect Market; and(d)stock borrowing and lending activities will be required to be reported to SEHK.
The relevant China Connect Market will determine a list of China Connect Securities eligible forstock borrowing and lending. Special China Connect Securities are not eligible for stock borrowing
and lending for the purpose of covered short selling (but are eligible for the purpose of satisfying
the Pre-Trade Checking requirement). We will be required to file a monthly report to the SEHK
providing details of our stock borrowing and lending activities with respect to China Connect
Securities. This may include (amongst others) details of the borrower, lender, amount of sharesborrowed/lent, amount of shares outstanding and date of borrowing/returning.
Investors are advised to refer to the relevant provisions from time to time applicable in the SEHK
China Connect Rules (as and when these are published) and in the China Connect Laws and China
Connect Rules.
37

Restrictions on Mainland China Investors from trading China Connect Securities

From the Restriction Effective Date we will not register new CHN BCANs for Mainland China
Investors for Northbound trading of China Connect Securities. Mainland China Investors withexisting registered CHN BCANs could still trade China Connect Securities through Northboundtrading under China Connect during the Transitional Period or as otherwise allowed under the
China Connect Rules or the China Connect Laws. After the Transitional Period we shall delete all
CHN BCANs of Mainland China Investors and stop accepting instructions to trade China Connect
Securities via China Connect from such Mainland China Investors.
China Connect July 2022
30

38

RMB Conversion

Any conversion of any currency into RMB pursuant to Clause 10 (Settlement and Currency
Conversion) may be subject to conversion limits. Settlement of a Northbound buy order may bedelayed and/or fail if there is a delay in converting the relevant currency into RMB. Any risk, loss
or cost resulting from any such delay or failure of settlement shall be borne by you.
Risks associated with investing in China Connect Securities
39

Other risks associated with investing in China Connect Securities

General Mainland China related risk
Mainland China is an emerging market that possesses one or more of the following characteristics:
a certain degree of political instability, relatively unpredictable financial markets and economic
growth patterns, a financial market that is still at the development stage or a weak economy.
Emerging markets investments usually result in higher risks such as event risk, political risk,
economic risk, credit risk, currency rate risk, market risk, liquidity/gapping risk, regulatory/legalrisk, trade settlement, processing and clearing risks and bondholder/shareholder risk.
Equity risk
Investing in China Connect Securities may offer a higher rate of return than investing in shortterm and longer term debt securities. However, the risks associated with investments in China
Connect Securities may also be higher, because the investment performance of China Connect
Securities depends upon factors which are difficult to predict. Such factors include the possibilityof sudden or prolonged market declines and risks associated with individual companies. The
fundamental risk associated with any equity portfolio is the risk that the value of the investments
it holds might suddenly and substantially decrease in value.
General legal and regulatory risk
You must comply with all China Connect Laws and China Connect Rules. Furthermore, any change
in any China Connect Laws or China Connect Rules may have an impact on the market sentiment
which may in turn affect the performance of China Connect Securities. It is impossible to predictwhether such an impact caused by any such change will be positive or negative for China Connect
Securities. In the worst case scenario, you may lose a material part of your investments in China
Connect Securities. In addition, any litigation or other legal actions brought before the courts in
Mainland China will be subject to Mainland China laws, rules and procedures, which are not thesame as those which apply to the courts in Hong Kong.
Currency risk
RMB is not yet freely convertible in Hong Kong, and is subject to foreign exchange controls andrestrictions. Particularly, conversion of RMB through banks in Hong Kong is subject to certain
restrictions. It may be difficult for investors to convert RMB into Hong Kong dollars or othercurrencies or vice versa at any specific time, and conversion will be subject to conversion costs
and such costs and timings for conversion may not be of your preference.
In addition, the value of RMB against Hong Kong dollars or other foreign currencies may beaffected by a wide range of factors. There is no guarantee that RMB will not depreciate. A
depreciation of RMB may result in a decrease in the market value of RMB securities and therealisation price of RMB securities. Non-RMB based investors who are trading in RMB securities,
may also sustain loss in the event that they subsequently convert any RMB proceeds back to
Hong Kong dollars or other base currencies.

China Connect July 2022
31

There are also significant restrictions on the remittance of RMB into and out of Mainland China.
If the issuer of RMB securities is not able to remit RMB to Hong Kong or make distributions in
RMB due to exchange controls or other restrictions, the issuer may make distributions (including
dividends and other payments) in other currencies. Investors may therefore be exposed toadditional foreign exchange risk and liquidity exposures.
The liquidity and trading price of China Connect Securities may be adversely affected by thelimited availability of RMB outside Mainland China and restrictions on the conversion of RMB.
These factors may affect the liquidity of RMB for investors and accordingly adversely affect themarket demand for China Connect Securities.
ChiNext Shares
ChiNext Shares involve a high investment risk. In particular, profitability and other financial
requirements for listing on the ChiNext board are less stringent than the Main Board and the SME
Board of the SZSE. You should make the decision to invest only after due and carefulconsideration.
Companies listed on the ChiNext board may include enterprises in the innovation and technology
sector as well as other start-up and/or growth enterprises with smaller operating scale and sharecapital. Stock prices may also be more susceptible to manipulation due to fewer circulating shares.
Accordingly, the ChiNext Shares may be very volatile and illiquid. In addition, current information
on such companies may be limited and may not be widely available.
It may be more common and easier for companies listed on the ChiNext board to be delisted. The
ChiNext Shares may become very illiquid after delisting. You may suffer a total loss of yourinvestment in the event of a delisting.
STAR Shares
Below are some additional risks associated with STAR Shares and these are not exhaustive. You
should also refer to the standard Risk Disclosure Statement in the Investor Eligibility
Implementing Measure of STAR Market (上海證券交易所科創板股票交易風險揭示書必備條款), as
amended, supplemented or updated from time to time.
Regulatory Risks
The rules and guidance on listing, trading, disclosure and other matters of the STAR Market varymuch from those of the SSE main board. For example, on the listing requirements, lower net
profit and revenue requirements will apply for company seeking IPO and listing on the STAR
Market. Different trading arrangements will apply for the trading of companies listed on the STAR
Market (the “STAR companies”), such as daily price limit, minimum order size and maximum
order size. For details of the listing requirements and the trading arrangements of the STAR
Market and the SSE main board, please visit SSE website.
Delisting Risks
The delisting standards of the STAR Market are different from those of the SSE main board. There
are more situations that will lead to the delisting of STAR companies. STAR companies havegreater exposure to the risk of being delisted, and such delisting process may be speeded up.
Operating Risks
STAR companies are generally in an early stage of development and have a shorter history. They
are usually smaller in scale, have less stable operations, and are less resilient against market
risks and industry risks. Although they may have higher growth potential and leverage more on
China Connect July 202232

technical innovations, their future performance particularly those without a profit track record issusceptible to great uncertainty.
High Share Price Volatility
The share prices of STAR companies may fluctuate largely and frequently due to changing market
conditions, investor speculations, inconsistent financial results, etc. The unstable financial result
also adds the difficulty to the company valuations.
Technical Risks
There is higher degree of uncertainty whether a STAR company is able to convert its technicalinnovations into physical products or services. When the industry is experiencing rapid
technological development and replacement, its product may be obsolete and may not survive inthe market.
ETFs
Below are some additional risks associated with ETFs and these are not exhaustive.
Delisting Risks
There will be no delisting arrangement period for ETFs eligible for Northbound trading under China
Connect. If an eligible ETF is delisted from SSE or SZSE, the ETF will be excluded as China Connect
Securities and removed from the eligible list, from the date when the ETF is terminated fromlisting, i.e. further buy or sell orders of the delisted ETFs will not be accepted. Fund managers
will liquidate assets for delisted ETFs and distribute the cash proceeds from liquidation via HKSCC
to investors who still hold units of such ETF, according to the principles set out in the Law of thePeople’s Republic of China on Securities Investment Funds (中 華人民共和國證券投資基金法).
Trading hours
The trading hours of each trading session for A shares and ETFs for Northbound trading are notentirely the same. There will be no closing call auction for Northbound trading of SSE-listed ETFs.
SZSE-listed ETFs and A shares listed on SZSE will nonetheless still have a closing call auction
session. For further information, please refer to the web pages on the HKEx website and the SFC
website relating to China Connect from time to time and other relevant sources.”
Sell-only securities

Under China Connect, the eligible ETFs that subsequently meet any of the following criteria uponregular review will be designated as sell-only securities and will be restricted from buying if: (i)the ETF’s daily average assets under management (i.e. AUM) in the last six months falls under
RMB 1 billion; (ii) the total weighting of SSE-listed and SZSE-listed A-Shares in benchmark index
falls under 85% or the total weighting of China Connect Northbound eligible constituents in thebenchmark index falls under 70%; or (iii) the benchmark index and the index methodology ofthe benchmark index fulfil criteria as set out by China Connect Authorities. This may affect yourinvestment portfolio or strategies. You should therefore pay close attention to the list of eligible
ETFs as provided and renewed from time to time on the website of HKEx.
Market risk
The value of an ETF represents the value of its underlying assets including but not limited tostocks, bonds, or commodities. ETF issuers may use different strategies to construct the portfolios,
but in general they do not have the discretion to take defensive positions in declining markets.
China Connect July 2022
33

You must be prepared to bear the risk of loss and volatility associated with the underlying
index/assets.
Tracking error
Tracking error refers to the disparity in performance between an ETF and its underlying
index/assets. For ETFs adopting a passive strategy, tracking error can arise due to factors suchas the impact of transaction fees and expenses incurred to the ETF, changes in composition of
the underlying index/assets, and the ETF issuer’s replication strategy. For ETFs adopting an active
strategy, tracking error will normally be higher due to the ETF issuer’s objective to outperform
its underlying index/assets. You should be aware of this active risk when considering to invest in
actively managed ETFs.
Trading at premium or discountAn ETF may be traded at a premium or discount to its Net Asset Value. This price discrepancy iscaused by supply and demand factors, and may be particularly likely to emerge during periods ofhigh market volatility and uncertainty. This phenomenon may also be observed for ETFs tracking
specific markets or sectors that are subject to direct investment restrictions.
Liquidity risk
Market makers provide liquidity to facilitate trading in ETFs. Although most ETFs are supported
by one or more market makers, there is no assurance that active trading will be maintained. In
the event that the market makers default or cease to fulfil their role, you may not be able to buy
or sell the product.

You should seek independent professional advice if you are uncertain of or have not understood
any aspect of this Annex, the nature and risks involved in trading of ETFs, ChiNext Shares and/orSTAR Shares.
-

END -

China Connect July 2022
34