Exclusive | Hong Kong stock exchange plans to scrap paper IPO applications in a bid to be more competitive, say sources

Hong Kong’s stock exchange is aiming to cement its position as the world’s leading IPO market by cutting out the paperwork, sources revealed.

It plans to take a major step towards becoming an entirely paperless bourse by shifting to a fully electronic subscription process for initial public offerings, according to two people familiar with the situation.

The move, aimed at making the city’s stock market more competitive, would dramatically speed up the process, cutting the delay between the close of an IPO and the first trading day, said the sources, who spoke on condition of anonymity.

“The problem with the [current] process is it’s very slow. The current model, which involves a lot of paperwork and cheque clearing means a company can only be listed about five days after the close of the offering,” one of the sources said.

“By making the subscription process purely electronic, including online fund transfer instead of cheque payment, it will speed it up the whole process. This means the company may be able to have their shares trading two or three days after the close of the offering. It will cut down costs and enhance efficiency.”