Reforms fuel concerns over regulator role for HKEx
Spike in HKEx shares on speculation through train quota would increase is cited as example of role conflict as both regulator and listed firm
With Hong Kong Exchanges and Clearing (HKEx) the main beneficiary of market reforms, questions have been raised again about whether it should keep its role as the exchange regulator.
"There is a clearly a conflict of interest for HKEx to continue to act as a front-line regulator for other listed companies while at the same time it is a listed company chasing maximum profit for shareholders," Democratic Party lawmaker Sin Chung-kai said.
"The Securities and Futures Commission should take a bigger regulatory role in terms of listing approval and to make sure the exchange system can cope with the current market rally."
The conflict occurs when HKEx, as a regulator, works with other government agencies to discuss reform plans but fails to release all the information obtained to the public, which is its duty as a listed company.
A prime example was that when its share price rose more than HK$100 in four trading days to hit a record high of HK$300 on Monday due to market speculation that the quota for the Shanghai-Hong Kong stocks through train might be lifted, the exchange could not provide more information.
HKEx chief executive Charles Li Xiaojia said on Friday the quota for through-train stocks would increase substantially - by more than 30 per cent - but gave no more details.
"HKEx has obviously not provided sufficient transparency about discussions on the stocks through train quota," Sin said. "More transparency would be needed as it is a listed company."