There are two fundamental flaws in the hasty decision over the weekend to relax the listing rules of the Growth Enterprise Market (GEM).
The first is the reasoning that it had to be done because GEM rules are more restrictive than those of competing stock markets elsewhere and this could hinder GEM's development.
The difficulty with this line of reasoning is that not all stock markets are the same.
Nasdaq in the United States may have looser requirements in some areas but this is because US securities regulation is much tighter than Hong Kong's in most other areas.
Try to list a speculative stock on Nasdaq with a prospectus to which you have no intention of adhering and from which you soon depart, leaving the people to whom you have sold the shares in the lurch.
You will spend almost every day of the next three years either in court or locked in consultations with your lawyers, defending class action suits that give you not a moment of peace.