The Securities and Futures Commission's refusal to ease the lock-in period for Growth Enterprise Market (GEM) investors from two years to six months could bring about the failure of the new board, according to the chief executive of potential listing candidate I-Quest. Anthony Blass warned that the two-year lock-up rule would keep many high-quality companies from seeking GEM listings. The SFC's reported decision to keep the share lock-up period at two years could even cause the new board to fail, he said. Mr Blass said I-Quest, a broadband Internet service provider, had planned to list next year on the GEM but would seek a listing on the United States' Nasdaq or in Singapore if the share lock-up rule was not relaxed. 'We had virtually discounted [listing in] Singapore until this morning [when we heard of the SFC's alleged refusal to ease the lock-up rule],' Mr Blass said yesterday. On Tuesday, stock exchange sources said the SFC had rejected a stock exchange plan to cut the lock-up period to six months, sparking market concerns about the new board's prospects. According to the sources, the SFC rejected the exchange's plan to ease the lock-up rule because of concerns about increasing risks for investors. However, the SFC approved the stock exchange's proposal to relax the minimum public-float requirement to 15 per cent. Some GEM sponsors also said a two-year lock-up period was too long, as six months was an established market practice. Ernest Ip, a partner at PricewaterhouseCoopers, said the GEM's rigid lock-up period would prevent companies from being involved in mergers and acquisitions and from having strategic investors.