Hong Kong’s regulator, exchange to assess listing reform submissions, may take months

SFC and HKEX say they will publish the results of the consultation in due course

PUBLISHED : Friday, 18 November, 2016, 7:59pm
UPDATED : Friday, 18 November, 2016, 11:15pm

Hong Kong’s securities regulator and stock exchange said they will need months to plough through the various proposals and suggestions submitted by academics, bankers, brokers and officials on reforming the city’s financial and listing regulations, as a much-delayed deadline for public consultations lapsed on Friday.

“In the coming months, the SFC and the HKEX will carefully consider and analyse all submissions received in preparing the consultation conclusions, which will be published in due course,” according to a written statement by the exchange, echoing a similar comment by the regulator.

The Hong Kong Exchanges & Clearing Ltd (HKEX) is the current market watchdog agency, which sets policies and approves each individual application by companies to list their shares. The Securities & Futures Commission (SFC) is the regulator that takes a back seat role with veto power in the approval process.

At issue, among a myriad of permutations and clauses, are proposals to propel the SFC into a frontline role alongside the HKEX.

Proponents of the plan, including Hong Kong’s Secretary for Financial Services & The Treasury Chan Ka-keung, and the SFC’s founding chairman Robert Owen, said having the SFC in the front seat will improve the quality of the market.

Opponents of the plan, including listed companies, brokers and pro-business political parties, argue that having a second regulator in the forefront could lead to excessive regulation.

The proposal, and all the policy minutiae associated with it, has stirred controversy and protests among financial officials, brokers and bankers in the city.

Technology entrepreneurs and startup founders have lent their voices to the controversy, amid concern that Hong Kong may lose its attractiveness as Asia’s preferred destination for initial public offerings if it didn’t reform its rules to keep up with other regional bourses including Singapore.

Jack Ma, founder of the South China Morning Post’s owner Alibaba Group Holdings, said earlier this month in an interview that Hong Kong’s existing listing regulations are old and not “relevant” to startups and new businesses.

He said the city needs to reform its listing rules to attract New Economy businesses and remain relevant as Asia’s financial hub. Alibaba chose to list its shares in New York in 2014.