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Dec. 6 (NBD) -- The launch of the Shanghai-London Stock Connect trading scheme will be delayed by at least one month, Reuters reported on Wednesday citing people with knowledge of the matter.

On the same day, after confirming with a source at the London Stock Exchange, Chinese news outlet Yicai reported that the launch ceremony for the Shanghai-London link, which was scheduled for December 14th, had been called off.

The delay is linked to the December 11 parliamentary vote on the U.K.'s Brexit deal, according to Yicai.

Although no definitive timetable for the launch of the Shanghai-London Stock Connect has been put in place, there are signs that China's preparations in terms of institutional design and trading systems are nearing completion.

On Tuesday, the Shanghai Stock Exchange announced that the bourse had approved the registration of China International Capital Corporation (UK) Limited ("CICC UK") to become a cross-border conversion institute of global depositary receipts ("GDRs") under the Shanghai-London Stock Connect scheme.

A source at China International Capital Corporation Limited ("CICC") told NBD that the approval means that CICC UK has obtained the market making qualification and there will be more top brokerages to be granted such qualification. Businesses related to the connect will not be very large-scaled at the initial stage, but will exert a demonstration effect on the industry, the source added.

This September, several major listed securities firms were reported to have submitted to the Shanghai Stock Exchange the application for marketing making for CDRs.

Later in October, the Shanghai bourse issued draft guidelines for the market making for CDRs under the Shanghai-London Stock Connect scheme as well as guidelines for the cross-border conversion of depositary receipts under the stock connect, laying down the institutional foundation.

Also in October, the Shanghai Stock Exchange, together with its clearing service provider China Securities Depository and Clearing Corporation Limited, ran a 24-hour debugging test to examine functions of the Shanghai-London Stock Connect trading platform. An employee at the Shanghai bourse said to NBD that there will be another debugging test.

However, an insider at one of the Shanghai-based top brokerages told NBD that there appear signs of a slowdown in recent regulatory approval of market makers for the Shanghai-London link. The insider said his or her company hadn't got the market making qualification which was expected to be granted in late November.

But, the above-mentioned source at CICC held that although news about the hold-up reflects some uncertainties in the implementation process of the Shanghai-London link, yet the launch of the Shanghai-London Stock Connect is inevitable with preparation work almost done.

The Shanghai-London Stock Connect scheme includes two business directions, eastbound and westbound. The eastbound business means that the London Stock Exchange-listed companies list the CDRs on the Shanghai Stock Exchange. In the westbound business, the A-share companies on the Shanghai Stock Exchange list the GDRs on the London Stock Exchange.

On November 30 this year, the China Securities Regulatory Commission gave Huatai Securities green light, paving the way for the brokerage to become the first of its kind to issue GDRs in London.

Email: gaohan@nbd.com.cn