Hong Kong Exchanges & Clearing said yesterday that funds related to cross-border stock investments between Shanghai and Hong Kong could not be used for additional investment purposes, in a bid to curb risks.

HKEx Chief Executive Charles Li said settlements would be based on net amounts to minimize cross-border fund flows.

The cross-border scheme, unveiled earlier this month, is a small but significant step toward opening China's capital account. It lets mainland investors trade shares in companies listed in Hong Kong and Hong Kong investors buy shares in Shanghai-listed firms.

Also yesterday, the Shanghai Stock Exchange issued draft rules on the program to solicit public opinions.

There will be no changes on the practices of the two bourses, laws on stock trades or investor habits, according to the draft rules, which specifies shares eligible for trade, volume controls and trading time.