Scripless share proposal falls short, lawmakers tell officials

A government proposal for a scripless stock exchange does not go far enough, legislators said.

Lawmakers grilled government officials at a Legislative Council financial affairs panel meeting yesterday about the slow pace of reform to allow electronic shareholding records that were first suggested in 1988.

Andrew Leung Kwan-yuen, who represents the industrial sector, said the government's proposed law change would only allow Hong Kong companies to go scripless initially. That meant only 206 of the more than 1,600 listed firms would qualify because most of them are domiciled on the mainland or abroad.

The actual number to begin using digital share records would be even smaller, with the government saying it would first allow about 50 firms to go electronic.

"It would not work if the scripless market involves only 50 companies. No investors would care about it," Leung said. "The government needs to set a clear target for all companies to go scripless."

Salina Yan, a deputy secretary of the Financial Services and the Treasury Bureau, said the government would work with overseas regulators on changes to laws to allow their companies listed in Hong Kong to use electronic shareholding records.