Hong Kong working on reforms to bring small, diverse companies to stock exchange
The HK$40 billion market cap threshold for weighted voting right companies could be lowered and listings could be opened up for more sectors
Hong Kong plans to implement a new round of stock exchange reforms to allow small and diverse companies with multiple voting rights to raise funds, according to a senior government official.
“The 2018 reforms paved the way for companies with weighted voting rights to list in Hong Kong, which has been very successful,” said Salina Yan Mei-mei, Permanent Secretary for Financial Services and the Treasury, on Monday. “Some people might think the scheme does not require any changes, but there is always room for improvement.”
Some of the changes could include lowering the minimum threshold requirements to allow relatively smaller companies to qualify, Yan told lawmakers on the Legislative Council Financial Affairs panel. The reform would also look into expanding the scope of businesses eligible for listing.
Currently, only innovative technology companies with a minimum valuation of HK$40 billion (about US$5 billion) are qualified to list under the weighted voting rights regime, which grants certain shareholders higher voting rights than others.
“While Hong Kong has been a listing venue for new economy and technology companies, we would like to see more diversified companies in different business sectors raise funds,” Yan said.
“On the whole, we would like to simplify the listing process, relax the listing rules to attract international firms and at the same time make sure that the changes do not affect the quality of the listing regime.”