How past reform proposals have come, failed and gone
Listed companies have been leading the opposition in many of the reforms proposed over the past 15 years.
The listing reforms that would increase the Securities and Futures Commission’s power in listing matters are likely to join the list of failed reforms, after they were resoundingly rejected by most of the respondents to a consultation.
The proposals in a joint consultation paper by Hong Kong Exchanges and Clearing and the SFC centred on establishing two committees – one for policy and one for regulatory issues – on top of the existing listing committee, with equal representation by the SFC and HKEX, to approve complicated new listings and set listing policies.
This would upend the current structure whereby HKEX’s listing division staff give preliminary approval to a listing and can suggest listing rule changes, which are then submitted to the 28-member listing committee of accountants, lawyers, executives of listed firms and fund managers for final approval.
The initial result showed 94 per cent of respondents – 8,000 out of 8,500 – rejected the proposals
for fear that the change would allow the SFC to overregulate. As they have in past reforms, the listed companies again led the opposition.
Amid the stiff opposition, the reforms would be difficult to proceed without any modification, and the current deadlock is not a first. Previous failures in the past 15 years have ranged from delisting, quarterly reporting and restrictions on cornerstone investments.
Here are the reforms that were proposed and why they failed: