EU regulatory fears blamed for thin Stock Connect volumes

Concerns by Europe's top funds watchdog that the landmark Hong Kong-Chinese mainland trading link may not adequately protect investors are preventing thousands of funds from buying Shanghai stocks, threatening the success of the project, market participants told Reuters.

The Stock Connect scheme, launched on Nov 17, allows foreign investors to trade Shanghai-listed shares via the Hong Kong stock exchange, and mainland investors to invest in Hong Kong shares via the Shanghai bourse.

But within a week of its launch, trading volumes had dwindled to less than 20 percent of the maximum allowance.