An investor looks at a board showing stock information at a brokerage house in Haikou, capital of South China's Hainan Province. Photo: CFP

The Shanghai Stock Exchange (SSE) on Monday launched tests to examine the technological vitality of the hardware and software system for the Shanghai-Hong Kong Stock Connect program as the bourse gets ready to launch the program later this year, the Xinhua News Agency reported Monday.

The Shanghai-Hong Kong Stock Connect program will allow mutual trading on the two cities' bourses.

 "Tests by securities firms indicate that we are a step closer to linking the Shanghai and Hong Kong bourses," Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, told the Global Times Monday.

The scheme has been welcomed by brokerages from both the Chinese mainland and Hong Kong, according to a report by the Shanghai Securities News on August 5.

A total of 90 mainland brokerages, or 91 percent of the registered SSE members, and 110 Hong Kong brokerages have applied to participate in the program, the report said.

Representatives from about 60 brokerages joined a mobilization meeting held at the SSE on Monday, signifying the government's determination to ensure a successful trial-run.

Brokerages can only become eligible for the scheme after they pass the tests, a representative of a brokerage firm attending the meeting was quoted as saying by Shanghai-based thepaper.cn.

The person also said that he is surprised to find out that many small and medium-sized brokerages have also submitted their applications to join the tests, drawn by the optimistic outlook for the scheme.

Over the weekend, Charles Li Xiaojia, CEO of Hong Kong Stock Exchanges and Clearing Ltd (HKEx), wrote in a statement published on his blog that the HKEx will conduct several joint exercises with the SSE in August and September.

However, Li also pointed out several constraints that mainland investors should be aware of.

He mentioned that the trading days of the two bourses will differ as Shanghai and Hong Kong have different public holidays, saying the scheme will be suspended during such occasions to save cost and manpower.

Other concerns include differing trading rules and the use of a quota system, one which Li said was designed to minimize any potential unforeseen risk of excessive capital flows.

Yao Changchun, a veteran HKEx investor based in Shenzhen, told the Global Times on Monday that he is just waiting for the scheme to get a "real" kick-start.

"With the support of the central government and the joint efforts of the two bourses, I believe the program will get rolling smoothly and what I have to do is to adjust my positions," Yao said, believing the scheme will help create a short-term boom in both Shanghai and Hong Kong stock markets.

But there are also concerns among the mainland investors.

"As a daily trading quota will be set for investors participating in the program, a major concern is that investors may be unable to buy new shares in the other market if the quota is already filled for the day," Xu Liping, a Shenzhen-based stock investor, told the Global Times on Monday.

"Investors in Shanghai and Hong Kong have different preferences in stock trading - investors in the ­mainland prefer trading on small cap stocks while international investors and those in Hong Kong tend to trade on blue-chip large cap stocks," Dong said.

HKEx said in an Information Book issued on April 29 that all Hong Kong and overseas investors will be allowed to buy A shares under the program.