Update | Hong Kong bourse to study measures to attract more tech start-ups to raise funds in the city

Hong Kong’s stock exchange said it will explore ways to encourage start-ups and technology companies to raise capital in the city, conceding the need to tweak existing listing rules to compete with Singapore and New York to be the hub for initial stock offers.

On Monday, the listing advisory committee at rival Singapore Exchange approved a plan to allow companies with dual-class shares to raise funds, in a move that makes the city more appealing to technology start-ups that often feature stocks with unequal voting rights.

Dual-class structure has been the subject of intense debate in Hong Kong since the bourse in 2014 missed out on a US$25 billion initial public offer by Alibaba Group, owner of the South China Morning Post.

Alibaba has a dual-class structure that allows founding shareholders to nominate up to half the company’s board of directors even as they own minority shares.

Hong Kong hasn’t allowed such a structure since the 1980s because the city’s Securities & Futures Commission, the market regulator, believes dual-class shares violate the “one share, one vote” principle and are unfair to other investors.

Alibaba eventually listed its shares in New York in what became the largest IPO in history.