Regulators have bowed to market pressure and scrapped requirements that main board listed companies immediately switch to mandatory quarterly reporting.
Sources at the weekend said that protests from companies had prompted the regulators to abandon their controversial proposal in favour of a British rule, which allows existing listed companies to voluntarily adopt quarterly reporting.
However, while the 790 existing main board companies will be given a three or four-year grace period to make the transition to quarterly reporting, all newcomers to the board will have to adopt it from the start.
'This two-tier system will help to ensure that Hong Kong could match the international trend to have quarterly reporting, while at the same it would give enough time for existing companies to prepare for the new regulation,' one source said.
In a January consultation paper, Hong Kong Exchanges and Clearing suggested that all main board listed companies move to quarterly reporting. The exchange said the proposal aimed to bring Hong Kong into line with international practices.
Quarterly reporting is mandatory in both the United States and the mainland, while it is voluntary but encouraged in Britain.
During the consultation process, which ended last month, regulators received more than 300 opinions on quarterly reporting, reflecting mixed views on the subject.