New | Hong Kong’s listing reform survey draws a resounding ‘nay’ for change

Proposals to amend Hong Kong’s rules for fundraising and stock market listing have been roundly rejected by representatives of the city’s listed companies, brokers and lawyers in a public consultation as the vast majority of them voted to maintain the status quo, according to lawmakers.

About 94 per cent of the 8,500 respondents in a survey are opposed to change while the remainder – largely made up of representatives of the accounting industry – supported change, according to David Graham, chief regulatory officer and head of listing at Hong Kong Exchanges and Clearing.

“Those opposed to the proposals have expressed concern about the risks of over-regulation and the possibility of excessive power” in the hands of the Securities and Futures Commission, the industry watchdog, Graham said in the presentation of the consultation findings to lawmakers at the Legislative Council on Tuesday.

The results, which are still being reviewed by the SFC and the exchange, are a resounding blow for reform advocates who have been striving to tweak Hong Kong’s financial regulations to attract more start-ups, technology and internet companies to raise capital here.

Even though Hong Kong remained the world’s top destination for initial public offerings in 2016, it has been losing ground to New York, Shenzhen and Singapore in attracting technology companies to list.

Jack Ma Yun, founder of Alibaba Group Holding, which owns the South China Morning Post, had been a critique of Hong Kong’s financial regime, describing it last year as an “irrelevant” framework that was more suited to attracting property developers instead of technology start-ups.

Among the issues being considered were the role of the SFC in approving stock listings and the allowance of stocks with different voting rights to list in Hong Kong.