Regulators backed on governance stance
Despite the cost, fund managers and brokers say the stock exchange and SFC were justified in sticking to the rule book in Alibaba case
Hong Kong-based fund managers and brokers support the decision by local regulators to refuse mainland e-commerce giant Alibaba's request for a waiving of listing rules, even though it may have cost the city a HK$100 billion initial public offering.
However, they are also calling for the listing rules to be reviewed soon with a view to attracting technology firms in the future.
Nick Ronalds, head of equities at the Asia Securities Industry & Financial Markets Association, which represents 60 financial institutions, said local regulators should not grant a waiver or change the rules for any one deal, no matter how big it is.
"Good governance means abiding by existing laws and regulations, unless or until they are changed, and any change should be based on a careful weighing of costs, benefits and consequences," Ronalds said.
Good governance means abiding by existing laws and regulations
Alibaba said on Sunday it would list in the United States instead of Hong Kong after local regulators' October rejection of its request to list here with a shareholder structure that would allow its founder and certain senior executives to nominate a majority of the board despite holding only minority stakes. The Securities and Futures Commission considered the request violated the "one share, one vote" principle. The city's listing rules ban dual-share structures while US markets allow them.
Christopher Cheung Wah-fung, the legislator representing the financial services sector, said the regulators had been right not to back down.
