Beijing Stock Exchange. Photo: CFP

The Beijing Stock Exchange (BSE) and the Hong Kong Exchanges and Clearing Limited (HKEX) on Thursday signed a memorandum of understanding (MOU) to support qualified listed companies in each other's market to file applications for listings, as Hong Kong will celebrate the 26th anniversary of its return to the motherland on July 1. 

The MOU reflects both exchanges' commitment to building long-term cooperation in support of cross listings, and sharing insights and expertise to promote the growth of capital markets in Beijing and Hong Kong, HKEX said on its official website. 

In addition, the two bourses will work together in a number of areas such as joint market programs, joint research projects, investor education and personal exchanges. 

The launch of the dual-listing arrangement represents a significant initiative which underscores commitment to deepening reforms and further opening up its market, responding to the needs of the market under the guidance of the China Securities Regulatory Commission, BSE CEO Sui Qiang said.

Sui added that the dual-listing will further broaden the benefits for companies to be listed both on the Chinese mainland and in Hong Kong, adding that the cooperation will support Beijing's development as an international science and innovation hub, and strengthen Hong Kong's role as an international financial center, further contributing to the growth of China's real economy and its technological development. 

The dual-listing mechanism will further expand the option for companies listed on the A-share market in Shenzhen or Shanghai and trying to be listed in Hong Kong simultaneously to also to be listed in Beijing, Dong Dengxin, director of the Finance and Securities Institute of the Wuhan University of Science and Technology, told the Global Times on Thursday.

Dong added that companies listed on the BSE will be able to further elevate their competitiveness with more funding options, which marks a milestone in boosting the market position and competitiveness of the BSE. 

Meanwhile Dong noted that as the BSE mainly serves small and medium-sized innovative enterprises, the mechanism will offer more opportunities and development potential for such companies.

The HKEX has also been stepping up efforts to attract and assist the development of more innovative enterprises, so the launch of the mechanism will help elevate the competitiveness of the bourse as well, Dong added. 

HKEX Chief Executive Officer Nicolas Aguzin said that the agreement reflects HKEX's ongoing commitment to connecting China and the world, while looking forward to supporting corporates and investors across the region, matching capital with ideas and driving towards shared, long-term sustainable success with the BSE.

The CSRC said earlier in May that it will keep enriching products in a bid to promote a high-quality expansion of the market.