Hong Kong Exchanges and Clearing (HKEx) should be more flexible in its listing rules and speed reforms of initial public offerings (IPOs) to keep abreast of transparency in developed markets, according to financial experts. HKEx should also make it more attractive for foreign companies to make a second listing in Hong Kong. 'The Hong Kong market must conform with the international standards. The [United States] market is very transparent with the quarterly reporting by companies. If the Hong Kong market can improve itself with more governance, more companies will seek listing here,' said Ernest Ip, a partner at PricewaterhouseCoopers Capital Market Services Group. Kennedy Liu Tat-yin, a partner at consulting firm Arthur Andersen, said the regulator should formulate rules for companies to announce their financial results quarterly. Companies listed in the stock exchange at present are required to report their financial performance half yearly. 'Some costs might be involved but there'll be better corporate governance,' said Mr Liu. Only companies registered in Hong Kong, the mainland, the Cayman Islands and Bermuda are allowed to be listed directly on the board. Experts said the HKEx should consider companies registered in other jurisdictions, such as Delaware in the US. Most US-based Internet and technology companies are registered in Delaware. 'I do believe that the stock exchange may have to consider accepting Delaware-incorporated companies,' said Mr Liu. 'If they can be listed in the US, I don't see why they can't be listed here. 'These companies are quite sizeable. The HKEx should make the listing rules more flexible.' Allowing Delaware-incorporated companies to list in Hong Kong was more relevant 18 months ago, before the technology meltdown that decimated many technology-related and dotcom firms. '[Then] Hong Kong would love to have these Silicon-based companies listed here, but its not relevant now. However, it would offer listing applicants a choice if Delaware is also accepted,' said Mr Liu. Experts stressed that investor protection should be an important consideration if the SAR were to entice more foreign companies to list here. 'We are taking an initiative to attract more companies and it will be a continuous effort,' a HKEx spokesman said. Financial experts also suggested that more mainland companies would list in Hong Kong and raise capital to face competition as a result of China joining the World Trade Organisation. 'With more capital raised, they would be able to compete with foreign enterprises in the early stages of China's entry into the WTO, before the full compliance with the trade requirements,' said Cheng Kin-chung, assurance and advisory partner of Deloitte Touche Tohmatsu. Mainland firms will be the main fund-raisers in the Hong Kong IPO market this year. 'The IPO list on hand now is higher compared to the same period last year and it's higher than what we expected,' said Mr Cheng. The slowdown in the local economy last year caused many firms to stall their plans to list. With the global economy expected to pick in the second half of this year, IPO activities will be reactivated. 'In the last six weeks, there was lots of IPO activity. They will continue in the coming quarter,' said Mr Ip. Last year, the funds raised by 88 IPOs on the main board and second board was HK$25.4 billion - an 80.7 per cent drop from the previous year.