Securities regulators have rejected two Hong Kong stock exchange listing applications because of alleged misleading information in their prospectuses. The rejections were the first of their kind after the Securities and Futures Commission (SFC) began reviewing new listing applications under the dual filing system, which started on April 1. The new system requires all applicants to submit prospectuses to the commission and the Hong Kong Exchanges and Clearing (HKEx) for approval. The SFC said it had informed the HKEx of its intention to reject the applications because of material deficiencies in the prospectuses, despite the companies having been given several months to fix the problems. This means the SFC did not use its power of rejection, but only asked the exchange to reject the application. An exchange source said the HKEx listing division followed the SFC decision in rejecting the applications. However, HKEx's listing division also decided to reject the applications. The commission did not identify the rejected listing candidates, who had not made their applications public. Under the law, the SFC has the power to prosecute any companies that give it misleading information, including information contained in listing prospectuses. An SFC spokesman yesterday declined to say if the watchdog would take action against the companies. Ashley Alder, SFC executive director of corporate finance said: 'This is not merit regulation or 'picking winners'. The focus is on material and meaningful information disclosure to enable investors to make an informed decision.'