Shenzhen Stock Exchange
Shenzhen Stock Exchange (SZSE) brokers give UK investors opportunities to trade on Chinese companies. This guide will cover how to select brokers with access to the Shenzhen Stock Exchange. We also discuss the background of the exchange, trading hours, investing rules, and the largest listed businesses and indices.
Best Shenzhen Stock Exchange Brokers UK
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AvaTrade is a leading forex and CFD broker, established in 2006 and regulated across 9 jurisdictions. Over 400,000 users have signed up with the broker which processes over 2 million trades each month. The firm offers multiple trading platforms, including MT4, MT5, and a proprietary WebTrader. 1250+ financial instruments are available for trading, alongside a comprehensive education center and multilingual customer support.
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Established in 1989, CMC Markets is a respected broker listed on the London Stock Exchange and authorized by several tier-one regulators, including the FCA, ASIC and CIRO. More than 1 million traders from around the world have signed up with the multi-award winning brokerage.
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Established in Australia in 2010, Pepperstone is a top-rated forex and CFD broker with over 400,000 clients worldwide. It offers access to 1,300+ instruments on leading platforms MT4, MT5, cTrader and TradingView, maintaining low, transparent fees. Pepperstone is also regulated by trusted authorities like the FCA, ASIC, and CySEC, ensuring a secure environment for traders at all levels.
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Interactive Brokers (IBKR) is a premier brokerage, providing access to 150 markets in 33 countries, along with a suite of comprehensive investment services. With over 40 years of experience, this Nasdaq-listed firm adheres to stringent regulations by the SEC, FCA, CIRO, and SFC, amongst others, and is one of the most trusted brokers for trading around the globe.
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City Index is an established and award-winning forex, CFD and spread betting broker with top-tier global regulation, including in the UK (FCA) and Australia (ASIC). With 30+ years in the industry, 13,500+ instruments and 24/5 customer support, City Index is a solid pick for aspiring traders.
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Founded in 1974, IG is part of IG Group Holdings Plc, a publicly traded (LSE: IGG) brokerage. The brand offers spread betting, CFD and forex trading across an almost unrivalled selection of 17,000+ markets, with a range of user-friendly platforms and investing apps. For 50 years, IG has maintained its position as an industry leader, excelling in all key areas for traders.
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RockGlobal is a New Zealand based and regulated CFD broker. They offer competitive spreads from 0.1 pips and a large range of trading assets, trading platforms and educational services, with up to 1:500 leverage. Operating in a Tier 1 regulated environment, RockGlobal offers peace of mind and excellent customer support.
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Saxo Markets is a multi-award-winning trading brokerage, investment firm and regulated bank. With a huge 72,000+ trading instruments, plus investment products and managed portfolios, clients have no shortage of opportunities. The trusted brand also offers transparent pricing and top-tier regulatory protection from 10+ agencies including FINMA, FCA & ASIC.
Comparing Shenzhen Stock Exchange Brokers
The quality of services and products will vary between Shenzhen Stock Exchange brokers. With that said, there are several areas to review and compare firms in:
Instruments
A key point when comparing Shenzhen Stock Exchange brokers is the available products. Which instrument to trade will vary depending on your short- and long-term goals, previous experience, and trading strategy.
Exchange Traded Funds (ETFs), for instance, may be suitable for longer-term investment strategies. ETFs track a number of securities listed on the SZSE. Popular examples include the iShares MSCI China A ETF and the KraneShares Bosera MSCI China A ETF.
The direct purchase of company shares may be the most straightforward trading vehicle. You can speculate on the price fluctuation of SZSE company stocks. Traders can invest in a range of sectors, from healthcare to finance.
Alternatively, some top brokers offer CFDs on Shenzhen stocks and indices, allowing traders to speculate on a rise or fall in prices without taking ownership of stocks, for instance.
In February 2023, the SZSE also launched a bond market-making business and stepped up the tools and services to create a stable investment environment.
Fees
The top Shenzhen Stock Exchange brokers have low/no commissions with tight spreads. City Index, for instance, offers indices trading from 0.45 pips. Additionally, the broker offers commission-free CFDs except for shares trading, whereby Chinese stocks are charged at 0.08%.
As well as trading fees, there are several non-trading charges to be aware of including deposit and withdrawal costs and inactivity penalties. AvaTrade, for example, has a £50 inactivity fee after three consecutive months of no trading, plus a £100 admin fee after 12 months of account dormancy.
Regulation & Safety
One of the most important aspects to review when comparing Shenzhen Stock Exchange brokers is their regulation and safety.
The best Shenzhen Stock Exchange brokers will hold a license from trustworthy financial authorities. This includes the Financial Conduct Authority, the UK’s financial regulator which works to protect customers.
Pepperstone, for example, provides UK investors access to the Chinese stock market, alongside top-tier licensing from the FCA.
Also look for two-factor authentication (2FA), website and platform-encrypted data transmissions, and one-time passwords for account management changes or updates.
Payment Methods
Prominent Shenzhen Stock Exchange brokers will offer free deposit and withdrawal methods with fast processing times. For UK traders, the most accessible payment methods will include credit/debit cards, bank wire transfers, and e-wallet solutions such as PayPal.
The minimum deposit requirement will also be important. CMC Markets, for example, has a £0 minimum deposit, making it easy for beginners to get started.
Trading Platform
Trading platform availability will differ amongst SZSE brokers. MetaTrader 4 (MT4) is the most common third-party terminal, however, proprietary platforms may provide competitive conditions and a user-friendly experience.
IG Index, for example, offers several trading terminals including MT4. Additionally, their customers can trade derivatives using ProRealTime (PRT) and their bespoke L2 Dealer terminal with access to watchlists, price alerts, and algo bots for stock investments.
Mobile app compatibility will also be advantageous so you can trade the SZSE and manage your account whilst on the go.
Tools
Additional tools and technology will provide a competitive advantage between Shenzhen Stock Exchange brokers. The best SZSE brokerages will provide tools for beginners and experienced investors.
This may include copy trading and funded accounts. Other valuable analytical tools include third-party data providers such as TradingView or Trading Central, where you can analyse the Shenzhen Stock Exchange Composite index and other assets through live charts and screeners.
Other features to look for when comparing SZSE brokers include a trading calendar with updates such as trading days, market opening hours, Chinese public holidays, and market closures.
Additionally, live news streams and company filings, real-time product performance, best stocks search functionality, and historical data may enhance the trading experience.
What Is The Shenzhen Stock Exchange?
History
The Shenzhen Stock Exchange (SZSE) was founded in 1987 though wasn’t established as a formal exchange until 1st December 1990. It is one of two major exchanges in China, the other being the Shanghai Stock Exchange (SSE).
The main difference between the two Chinese exchanges is the type of listed companies. The Shenzhen Stock Exchange predominantly consists of small and developing companies, whilst the Shanghai Stock Exchange lists larger, state-owned firms.
The SZSE is a self-regulated firm but is overseen by the China Securities Regulatory Commission (CSRC). The exchange operates fully online, however, its head office building is registered to an address in the Futian District of Shenzhen.
Products include A and B shares, fixed-income products, major indices, mutual funds, and more. It’s important to note that SZSE instruments are typically traded in the Chinese yuan as the majority of company listings are based in China.
Markets
The Shenzhen Stock Exchange (SZSE) was previously made up of three financial boards, however as approved in April 2021, a merger between the main board and the SME board created just two financial boards.
Before the merger, the SME board held just over 1,000 firms with a market cap of $2.1 trillion (approx. £1.7 trillion). The main board was home to 468 organisations with a value of $1.5 trillion (approx. £1.2 trillion).
The ChiNext Market is the Chinese equivalent of the NASDAQ in the United States, with a focus on new and upcoming technology firms. The board launched in 2009 and saw a 22% growth rate in the number of listed companies between 2010 and 2020.
Originally home to 849 companies in 2010, there are now over 2,700 listed today. Among the largest companies listed on this board include Guangdong Wens Foodstuffs Group, East Money Information Co, and Sanju Environmental Protection & New Materials.
There are three different stock classifications:
- A Shares – The common shares of firms that are listed and incorporated in mainland China. The stocks are denominated in the Chinese yuan.
- B Shares – Again, common shares of organisations that are listed and incorporated in mainland China. However, some stocks are denominated in the Chinese yuan as well as some in foreign currencies. Some Shenzhen Stock Exchange brokers refer to these as ‘foreign investment shares’.
- STAR Shares – Shares of firms that are involved in technology, scientific research, or innovation.
How To Buy Shares
UK retail traders can buy Chinese company shares by registering with an authorised broker-dealer. Note, countries must be registered as ‘partners’ of the China Securities Regulatory Commission (CSRC) before the issuance of Chinese stocks is permitted via online brokers.
Funding to Shenzhen Stock Exchange brokers can be facilitated in GBP, however, A-shares are listed in the Chinese yuan and therefore you may need to pay a conversion fee when trading in the home currency.
Typically, the brokerage will operate with a market maker, which will be located in China and act as the transaction facilitator.
Indices
Shenzhen Stock Exchange brokers may offer major Chinese indices. The most common index found at UK brokers is the China A50, however, some platforms also provide trading opportunities on:
- A50 Index (CN50) – The A50 index consists of the 50 most actively traded and largest organisations listed on the Shenzhen and Shanghai stock exchanges. It tracks the performance of A shares and is a good benchmark for UK traders. There is a quarterly rebalance. Listed firms are categorised across several industries including insurance, property, banking, and consumer goods.
- Shenzhen Stock Exchange (SZSE) 100 Index – Similar to the A50 index, the SZSE 100 index comprises the 100 largest and most liquid A company shares, reflecting the overall performance of the leading companies listed on the Shenzhen Stock Exchange.
- SZSE Component Index ETF – The Shenzhen Stock Exchange Component Index ETF is the flagship index made up of the 500 leading and most liquid A company shares.
- ChiNext Index – This is a free-floating market cap-weighted index, comprising the 100 largest and most liquid shares trading on the Shenzhen Stock Exchange ChiNext Market.
China A50 Index Chart
Major Stocks
Some of the largest companies listed on the Shenzhen Stock Exchange include ZTE (ticker symbol SHE: 000063), Oriental Energy Co Ltd (SHE: 002221), Bank of Ningbo Co Ltd (SHE: 002142), Anker Innovations Technology Co Ltd (SHE: 300866) and BYD Co Ltd (SHE: 002594).
Use the listed companies search function on the Shenzhen Stock Exchange website to find company stocks, or review your broker’s website for financial information on listed firms. Available data may include company announcements, average daily turnover, annual financial reports, statements and upcoming IPOs.
Major listings include:
- Contemporary Amperex Technology Co Ltd – industrials sector, market capitalisation CNY 1.01 trillion
- Wuliangye Yibin Co Ltd – consumer necessities sector, market capitalisation CNY 815 billion
- BYD Co Ltd – household goods, market capitalisation CNY 745 billion
- Hangzhou Hik-Vision Digital Technology Co Ltd – technology sector, market capitalisation CNY 399 billion
- Shenzhen Mindray Bio-Medical Electronics Co Ltd – healthcare sector, market capitalisation CNY 378 billion
- Luzhou Laojiao Co Ltd – consumer necessities sector, market capitalisation CNY 375 billion
- Midea Group Co Ltd – consumer necessities sector, market capitalisation CNY 375 billion
- Muyuan Foods Co Ltd – consumer necessities sector, market capitalisation CNY 268 billion
- East Money Information Co Ltd – financial sector, market capitalisation CNY 265 billion
- Ping An Bank Co Ltd – financial sector, market capitalisation CNY 243 billion
Trading Hours
The Shenzhen Stock Exchange trading hours are Monday to Friday, 9:30 am to 11:30 am and 1:00 pm to 2:57 pm China Standard Time (GMT+8). Note the exchange does have a lunch closure each day.
The Chinese exchange also offers a pre-market trading session from 9:15 am to 9:25 am, though there are no post-market trading sessions available.
Leading Shenzhen Stock Exchange brokers will reflect these trading hours and public holiday dates in an online calendar so you can review when the exchange is open and closed in real-time.
Listing Requirements
To be accepted as a listed company on the Shenzhen Stock Exchange, there are several minimum listing requirements and trading rules that must be adhered to.
For example, to be accepted as a listing on the SZSE main board, an organisation must have a positive net profit in the last three years with a combined total amount above RMB 30 million.
Additionally, firms must have been in operation for at least three years and have a suitable financial statement reporting process in place with no historical false records.
Trading Limits
The rules dictate that a single foreign investor may not hold more than 10% of a company’s total issued shares. There is also a total foreign ownership limit of 30% of all issued shares.
The SZSE is required to publish a notice on its official website when the total foreign investment holding of a company share reaches 26%.
Regulation
The China Securities Regulatory Commission (CSRC) oversees and regulates the securities and futures industry in the country.
The national body operates to maintain fair and transparent systems and functions in the financial markets. This includes the oversight of all foreign investment firms listing Chinese securities. The agency is located in Beijing.
Additional roles of the CSRC include the creation and implementation of laws for the securities market, oversight of the issuance, trading, and settlement of stocks and other listed securities, and disciplinary action for any breaches of CSRC laws.
Short Selling
The China Securities Regulatory Commission (CSRC) stated that a small number of stocks were permitted to be sold short or purchased on margin in 2010. This includes ‘blue chip’ stocks with a stable earnings performance and limited volatility on the Shenzhen Stock Exchange.
The guidelines surrounding short selling have been amended several times, including implementing a halt of all shorting activities in 2015 following the stock market crash in China.
Bottom Line On Shenzhen Stock Exchange
UK brokers offer access to new and emerging Asian markets through the Shenzhen Stock Exchange. CFDs, ETFs and indices are particularly popular investment vehicles with retail traders. Use our Shenzhen Stock Exchange brokers list to find the best trading platform for your investment goals.
FAQ
Which Is The Best Shenzhen Stock Exchange Broker?
This will depend on your trading strategy and goals. SZSE brokers with ETFs may suit longer-term investors while short-term traders may prefer leveraged CFDs that allow them to go long or short on the Chinese stock market. Also look for FCA-regulated brokerages, low fees, accessible payment methods, and reliable customer support.
Who Owns The Shenzhen Stock Exchange?
The Shenzhen Stock Exchange is a self-regulated entity that is supervised by the China Securities Regulatory Commission (CSRC). The CSRC oversees the investment activities of the SZSE and other members to ensure that fair and transparent trading rules are being met.
Where Is The Shenzhen Stock Exchange Located?
The Shenzhen Stock Exchange’s head office location is in the Futian District of Shenzhen, southeast China.
What Time Does The Shenzhen Stock Exchange Open For Trading?
Retail investors can trade on the Shenzhen Stock Exchange Monday to Friday, 9:30 am to 11:30 am, and 1:00 pm to 2:57 pm China Standard Time (GMT+8). The best Shenzhen Stock Exchange brokers publish a full trading calendar with important dates, market closures, and public holiday times.
Does The Shenzhen Stock Exchange Offer After Market Trading?
No, the Shenzhen Stock Exchange does not permit after-market trading. However, leading SZSE brokers may offer customers access to the pre-market trading session available between 9:15 am and 9:25 am China Standard Time (GMT+8).
Article Sources
Shenzhen Stock Exchange website