Hong Kong is working night and day to launch an initiative that will let global investors trade Chinese stocks from the city for the first time and secure the former British colony's position among the world's pre-eminent share markets.
The Hong Kong and Chinese governments agreed in April to allow international investors to trade Shanghai 'A' shares via the Hong Kong stock exchange while mainland investors will be able to trade Hong Kong 'H' shares via the Shanghai Stock Exchange, subject to quotas both ways.
To meet an October deadline, regulators, brokers and engineers in Hong Kong have shunted other projects to the bottom of their to-do list, delaying technology upgrades, putting off new product launches and pushing market reforms onto the backburner.
But the rush to launch the complex project risks a technology snafu that could lead to potential losses on investors' portfolios, people in the industry say. They also worry that the Hong Kong and Shanghai financial industry may not be fully prepared by October.
"My concern is that some exchange participant firms won't be ready, and many buy-side firms won't be either, which means the first few months may be quiet as institutional investors wait and see how the initial implementation pans out," said Stephane Loiseau, head of cash equities for Asia Pacific at Societe Generale.
"Everyone is trying to get ready to connect, even if the timeline is very aggressive," said Loiseau, whose bank has a big group of staff working on the project.
One banker at an international firm said his institution had unsuccessfully approached the Shanghai Stock Exchange to urge it to delay the project because "the timeline is very tight."
The Shanghai exchange did not respond to requests for comment.
More than 100 banks and brokers in Hong Kong - including HSBC, Societe Generale, BNP Paribas, Morgan Stanley, Citigroup and Instinet - are working on the project. The initiative has diverted thousands of staff from their everyday roles and will see many of them office-bound over several weekends in August and September for performance and business continuity testing.
"If you have to get your arms around this in two-and-half months, you have no choice but to be working on it 24-7," said Christopher Hamilton, executive for the Asia-Pacific region at Capco, a consultancy working on the project.
"Banks are being cautious because there is reputational risk if you mess up," he said.
The trading link requires an unprecedented level of coordination between multiple parties - including brokers, asset managers, the two exchanges, their clearing and settlement providers, data providers, technology firms and several regulators.
Additionally, the Hong Kong and Shanghai markets have to overcome different currencies, fee structures, legal regimes, tax rules, national holidays, clearing and settlement processes, and supervisory regimes.
All that has to be ironed out over a six-month period. Brokers note this is a narrow window, saying a relatively simple market connection to a new exchange system would normally take a minimum of nine months.
The link is the top priority at the Hong Kong Exchanges and Clearing (HKex), which has pushed a number of closely-watched initiatives - including a planned consultation on a closing auction and the introduction of trading controls known as circuit-breakers - onto the backburner, two sources familiar with the matter said.