The stock exchange wants the Securities and Futures Commission (SFC) to be the sole regulator of listing sponsors to resolve investment bank concerns about double regulation, according to exchange sources.
'The SFC is the one which issues licences to the sponsors and it would be natural for the commission to handle the regulation of sponsors,' the sources said.
A source told the South China Morning Post yesterday Hong Kong Exchanges and Clearing (HKEx) had put the suggestion to the government and the SFC for consideration and had received positive responses from both.
HKEx and SFC spokesmen declined to comment yesterday, only saying they were still reviewing comments gathered in a consultation exercise earlier this year on the regulation of sponsors.
At present, sponsors are licensed by the SFC as financial advisers and also need to meet requirements set by HKEx to be sponsors in the Growth Enterprise Market.
Sponsors of main board companies are not subject to any specific requirements from the HKEx.
The Euro-Asia Agricultural (Holdings) scandal last year led to proposals to tighten regulation of sponsors after allegations that the sponsors of the Shenyang orchid grower did not conduct due diligence to ensure information provided by the company was accurate.