HKSCC has provided SPSA services since 2015 to facilitate investors to sell Connect Securities without pre-delivering the shares from their custodians to their brokers before market open. Investors can request a Custodian Participant or a GCP who is not an Exchange Participant(non-EP GCP) to set up SPSAs in CCASS, each with its own unique investor identification number (“Investor ID”), and designate up to 20 EPs as executing brokers authorized to place sell orders for the SPSAs’ Investor IDs.
CCASS snapshots Connect Securities holdings under each SPSA to China Stock Connect System (CSC) for performing pre-trade checking. When an investor's broker places a sell order with the SPSA’s Investor ID, CSC verifies if the broker has been designated for the Investor ID and if there is sufficient holdings in such SPSA. If pass, the sell order is accepted; otherwise, it is rejected.
The SPSA model is ultimately intended to eliminate the inconvenience of pre-delivery. Here’s how it works: