Hong Kong overhauls city’s stock listing rules to attract biotech firms, tech giants to raise capital
The overhaul in the listing regulations and procedures, the most drastic in three decades, will take effect in mid-2018, according to the exchange operator.
Hong Kong’s stock exchange has unveiled the biggest overhaul in its listing rules and procedures in three decades, in an overture to giant technology companies seeking to raise capital, as the city tries to catch up with New York and Shanghai in the race to be the world’s largest market for initial public offers.
The bourse will abandon an earlier plan for a so-called Third Board for start-ups, but instead create two additional chapters in its listing regulations for biotechnology firms and companies with multiple classes of shares to raise capital, according to the Hong Kong Exchanges and Clearing Limited, the market operator.
“The market has changed substantially in 30 years, it’s time to make a change,” said chief executive of the bourse, Charles Li Xiaojia, in response to a media inquiry. “If we don’t change our listing rules, we will miss the boat.”
The founders of Alibaba – owner of the South China Morning Post –have special rights to appoint directors to the company’s board. That privilege, although it must be ratified at a shareholders meeting, contravened Hong Kong’s “one share, one vote” principle, resulting in a deadlock on the company’s listing application that ultimately drove Alibaba to take its stock offer to New York.
“We may have missed some big players, but it is not too late,” Li said in Hong Kong . “After the change in the rules, many of the Chinese companies that are seeking to list in the US may also consider listing in Hong Kong.”