Beginning Monday, November 17, foreign fund managers in Shanghai and Hong Kong could access each other's stock exchanges, allowing investors from both markets to purchase or sell stocks in either direction. However, under the Shanghai-Hong Kong Stock Connect program, there would be a daily quota limit and aggregate cap.

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The link could potential make the merged bourses the third-largest stock market in the world once their boards become fully integrated, analysts said. The two stock exchanges make available to investors a total of $2 trillion shares, UBS estimates.

As part of marking the landmark event, China's Finance Ministry said on Friday that it would temporarily exempt from taxes on profits transactions made on the two stock exchanges to encourage not only investors from Hong Kong and China to trade in each other bourses but also global investors to purchase Chinese shares for the first time.

But foreign investors would be taxed on future transactions at a later date. The exemption from income tax would be for three years, but investors are still liable for tax on dividends, according to Beijing. Likewise granted temporary exemption from business tax are Qualified Foreign Institutional Investors and Renminbi Qualified Foreign Institutional Investors.

"Launching the scheme with tax uncertainty looming would have been a major obstacle for investors and removes a big source of risk and uncertainty," Reuters quotes Nick Ronalds, Asia Securities Industry & Financial Markets Association head of equities, based in Hong Kong.

Stamp duties would still be imposed on investors from the two bourses, while investors from Hong Kong must still pay the 10 percent tax on dividends earned from investments in the mainland.

Despite the incentives, brokers, fund managers and lobby groups have warned traders that among the things they have to get used to as part of the unique set-up of the trading link are different trading hours, rules and settlement systems as well as different market holidays.

There are two schools of thought on who would benefit from the linkage. One school believes it would favor the A-share market, the other thinks it would benefit more the H market.

"For me it doesn't matter ... If I can invest in more stocks, that means more opportunities," The Wall Street Journal quoted Old Mutual Global Investors head of Asian equities Joshua Crabb who manages $27.3 billion investors' shares.

Tagscross trading, Hong Kong Stock Exchange, Shanghai Stock Exchange, bourses, stock market