Reforms key to Growth Enterprise Market’s tech ambitions
Hong Kong market participants call for creation of new boards or relaxation of listing rules
Market participants have backed the Securities and Futures Commission’s (SFC) plan to review the listing rules to improve the troubled Growth Enterprise Market (GEM) and make the city a more attractive listing destination for technology companies.
They want the regulators to consider creating a separate board, or changing GEM’s listing criteria.
SFC chairman Carlson Tong Ka-shing said last month there would be a review of listing rules in the city to address the many problems in the GEM, where the share prices of some companies have been volatile and many companies have been taken over for backdoor listings.
“Hong Kong has traditionally been a difficult place for smaller technology companies to raise capital through an IPO,” said Allan Yee, a partner at global law firm Norton Rose Fulbright. “It would be helpful if the SFC considered allowing confidential filing and vetting for GEM board listings and for regulators to be less paternalistic in allowing technology companies to list. As technology is becoming an increasingly important sector in China and Hong Kong, the regulators in Hong Kong need to also update the listing rules to facilitate this new economy.”
The procedural requirements to list on the main board and GEM board are substantially the same
Yee said the United States had adopted the Jumpstart Our Business Startups Act (or JOBS Act) in 2012 which had made it much easier for smaller companies to raise capital there.