Two former Hong Kong financial heads take the side of SFC in company listing reform debate

Two former financial heavyweights have added their voice to the turf war between Hong Kong’s two financial market regulators over public company listing reforms.

Hong Kong Securities Futures Commission founding chairman Robert Owen and former financial minister Frederick Ma both support proposed listing reforms that would boost the influence of the SFC in listing matters, while the plans are strongly opposed by others including a Hong Kong Exchanges and Clearing director.

Owen, who was chairman of the SFC from its establishment in 1989 until 1992, the period when the basic structure of the city’s public listing regime was established, said he believes the reform plans are steps in the right direction.

“Circumstances back then were very different from how they are now,” he said. In 2008 Owen was also adviser to the HKEX during a review on how to improve the process of listing new companies in Hong Kong.

The controversial consultation jointly announced by the SFC and the HKEX suggests the establishment of a listing regulatory committee and a listing policy committee, with equal representation from both regulators, effectively involving the SFC in the listing process at an earlier stage. At present, HKEX and a listing committee approve new listings and set policies, while the SFC grants approval in the final stage.

But there is strong opposition, with HKEX director Vincent Lee saying the proposals were prepared by exchange staff and did not have board approval. Lee said he was totally opposed to the reforms, a view echoed by Chamber of Hong Kong Listed Companies vice-chairman Lo Ka-shui last month when he publicly slammed the plan as one that could result in over-regulation and “may kill off the IPO market”.