Tomorrow, Financial Secretary John Tsang Chun-wah will lead a senior delegation to Moscow and St Petersburg to promote Hong Kong as the best place to list Russia's rich natural resources. This should be an easy sell, given our market's dramatic rebound, stellar track record in financing China's reform and, most important of all, unrivalled access to investment-thirsty mainland investors. After all, where on earth can the cash-starved Russians find a place where wealth has been largely unscathed by the financial crisis than the mainland? Yes, London, the old favourite of Russian issuers, has a cultural and historical edge, but that is very much negligible now, given the deep wounds the Europeans have suffered in the past nine months. The sales pitch should not be too difficult for Mr Tsang. Well, only if the Russians do not ask about the friendliness of our regulatory regime. The answer to that would be very disappointing. More than three years after an open pledge by Chief Executive Donald Tsang Yam-kuen to welcome foreign issuers, our regulations remain unfriendly. Rather than this being the fault of individual officials, it says more about a structural failure. Let's wind the clock back to March 2007, three months after Mr Tsang's pledge in his policy speech. The stock exchange and the Securities and Futures Commission issued a joint statement promising a streamlining of regulations for foreign issuers. An addendum to that statement said: 'For the purpose of determining whether an overseas company demonstrates acceptable shareholder protection standards, the Stock Exchange of Hong Kong ordinarily expects an overseas applicant to provide submissions to demonstrate appropriate shareholder protection standards in the various key aspects.' That means, as the first company from your country to seek a listing here, you will have to bear the cost and responsibility of ensuring rules at home are compatible with Hong Kong. Needless to say, no foreign issuer applied. Last year, HKEx made another move - the introduction of depository receipts allowing a foreign company to list in Hong Kong while keeping its incorporation or primary listing at home. Hopes were high. Market practitioners expected this to address any political hostility in the home country against a foreign listing and remove the burden of proof on the issuers. It did not. The new rule said: 'The law of the issuer's place of incorporation, as supplemented by the issuer's constitution, must not be inconsistent with the rights of shareholders or of the holders of depositary receipts under Hong Kong law and the Exchange Listing Rules.' So for any Russian interested in our market, Mr Tsang's answer to him would be: 'Thank you very much for your interest. However, to enter, you should first get your country to sign a bilateral agreement with the SFC, or get your lawyers to prove that your standard of shareholder protection is equivalent to ours.' That's not a very warm welcome. 'The problem is you would have to spend a lot on legal fees without knowing whether you've got the right answer for the regulators,' said an investment banker. Sure, there is an issue of investor protection. But the dilemma between market friendliness and shareholder protection can be solved by having the exchange take on the legal comparisons job then drawing up general guidelines for potential issuers on what amendments they need to make to their constitution in order to meet the Hong Kong conditions. The regulators did it in the late 1980s and early 1990s to lure issuers from the mainland and Bermuda when the market was in a bad condition. It was costly, but that's what you have to pay if you are serious about competing for issuers with other bourses. The result of our unfriendly regulation is that no foreign issuer has applied in the past three years, while other markets such as Singapore and London have secured many. Cheat me once, shame on you. Cheat me twice, shame on me. The real question is why a policy decision by the government and the stock exchange board, which is vital to our market's long-term development, has not been translated into action. Instead, it has been lost in the drafting of rules and regulations. There are other questions, too. Why has the listing division not opted for a more proactive approach as they have done before? What has the board done to ensure the strategy has been implemented? What is the SFC's role in the whole process? What have the responsible government officials done to put their words into action? It is hard to imagine Hong Kong living up to the challenges not just from Shanghai but other financial markets, if these questions remain unanswered. Perhaps, instead of basking in Russia's white night and dreaming of an influx of Russian issuers, Mr Tsang should spend his time figuring out an answer.