Securities commission backs introduction of dual-class shares on Hong Kong stock exchange
To attract new economy companies to list, ‘we need to change’, says Securities and Futures Commission chairman
The Securities and Futures Commission, recognising the competitive pressures the city faces in attracting listings by new economy companies, has thrown its weight behind the Hong Kong stock exchange’s proposed listing reform that will allow companies with multiple classes of shares to list here, its chairman Carlson Tong Ka-shing said on Tuesday.
This confirmed a South China Morning Post report on the regulator’s support for a change that will hopefully attract big mainland players such as Lufax and Ant Financial Holdings.
“This is a competition issue. It is not just the US – the UK and Singapore also want to attract technology and new economy companies to list. Hong Kong needs to play catch up,” Tong said in a media briefing on Tuesday.
He hoped at least one giant tech company would list here under the new rules by October 2018, when he retires after a six-year stint with the commission.
“I hope that mainland tech companies would no longer see the need for them to list in the US, as they will be able to list in Hong Kong, while the tech giants such as Alibaba Group Holding and Baidu would consider secondary listings here after the new rule changes for dual-class share companies are introduced next year,” said Tong.
“I hope that mainland tech companies would no longer see the need for them to list in the US, as they will be able to list in Hong Kong.”
This follows the rejection in 2014 of a plan by e-commerce giant Alibaba to adopt a structure that would allow its founder, Jack Ma Yun, and key executives to appoint more than half of the company’s board. Alibaba, which owns the South China Morning Post, eventually listed in New York, which allows dual-class share structures while Hong Kong has banned these since the mid-1980s. Ant Financial is an affiliate of Alibaba.