The stock exchange listing committee plans to halve the amount of new shares that can be issued to raise cash under a general mandate to 10 per cent of the total share capital to enhance investor protection.
However, listing committee chairman Moses Cheng Mo-chi yesterday said the 20 per cent general mandate threshold should remain when companies were seeking assets or acquisitions.
The proposals, which will be the subject of a consultation paper, are aimed at answering criticism from corporate governance advocates, who say the current general mandate rules result in shareholders' investments being diluted too much.
But one such advocate, exchange director David Webb, last night said he was not satisfied with the proposal.
Mr Webb has been pressing for a 5 per cent cap on general mandates to raise cash without seeking shareholder approval.
'It has not gone far enough,' he said, adding that in Britain, the general mandate for companies to issue new shares for cash was capped at a 7.5 per cent total over a three-year period.
'If Hong Kong wants to be an international financial centre, it should follow the international practice,' he said.