The Securities and Futures Commission has stepped up efforts to strengthen its regulatory framework in the face of rapid technological development in the financial markets, according to the watchdog's annual report.
Among recent measures, the SFC had set up a 10-member independent committee to review listing rules and other regulations to ensure they are in line with international practices, it said in the report.
'Technology has changed securities markets profoundly in character, depth and liquidity,' Andrew Sheng said in a chairman's statement.
This had created the problem of regulatory arbitrage between markets, as some companies could list in markets with fewer restrictions than home-country exchanges, Mr Sheng said.
'Given the growing regulatory arbitrage between markets in the competitions for listing, there is also an urgent need to ensure regulatory standards coverage.' To address this problem, the newly created committee is to check whether local regulations are adequate to block regulatory arbitrage.
The committee would also make sure regulations were not too tight, in order to keep companies interested in seeking local listings, he said.