Gongs were struck in the Shanghai and Hong Kong bourses to mark the historic start of the Shanghai-Hong Kong Stock Connect program on Monday.

The initiative is a landmark trading link program allowing investors to trade on both bourses. It has been seen as a significant move toward a more open capital market in the Chinese mainland.

The much-anticipated launch is expected to see billions of dollars in daily cross-border transactions.

Under the whole program, which caps cross-border investment at 550 billion yuan (90 billion US dollars), investors, with over 500,000 yuan in their brokerage accounts, will be allowed to trade eligible shares listed on either market through local securities firms or brokers.

Each day, investors are permitted to buy and sell up to 23.5 billion yuan worth of stock from a select list of companies. Up to 10.5 billion yuan of that daily quota goes to mainland investors and the rest to Hong Kong.

Previously, cross-border investment in the the mainland equity market was only allowed under a series of projects including qualified domestic institutional investor (QDII), qualified foreign institutional investor (QFII) and RMB qualified foreign institutional investor (RQFII).

To overcome a major block in the stock connect program, the Finance Ministry and its securities watchdog on Friday decided to exempt profits made from the connect program from taxes from its launch until Nov. 16, 2017.

At the launch ceremony in Shanghai, China Securities Regulatory Commission (CSRC) chairman Xiao Gang hailed the trading link program as a "major institutional innovation" in capital markets.

The link heralds a new model -- whereby operation is convenient and risks controllable -- for cross-border securities investment," Xiao said.

The connect program is conducive to "consolidating the role of Hong Kong as an international financial center", and "speeding up the building of Shanghai as an international financial center" so as to raise the competitiveness of China's overall capital market, Xiao said.

It is also "conducive to the internationalization of RMB and boosting the convertibility in cross-border capital and financial transaction," he added.

Chinese shares surged on the news. The benchmark Shanghai Composite Index opened at 2,506.86 points, up 28.04 points, or 1.13 percent, before closing at 2,495.80 for the morning session.

Hong Kong stocks moved up 225.68 points, or 0.94 percent, to open at 24,313.06.