HKEX, SFC propose overhaul of stock market listing regime
Move comes after Charles Li Xiaojia’s role in process seen as conflict of interest
Hong Kong Exchanges and Clearing would face a cut in its power on listing matters, while chief executive Charles Li Xiaojia would be removed from the committee that approves new listings, under a major reform proposal.
The blueprint would allow the Securities and Futures Commission to have a bigger say in the listing approval process and in setting new listing rules, under an overall plan aimed at improving listing quality following a series of high-profile cases of badly handled new listings.
Under the proposal — jointly issued by the HKEX and the SFC on Friday evening for a three-month consultation — it is suggested Li will no longer be a member of the listed committee which approves new listings.
David Graham, chief regulatory officer at HKEX, said the move was aimed at addressing what had been seen as a conflict of interest for the exchange to have an official sitting on the listing committee to approve new listings.
HKEX collects listing fees, and there have been concerns it could be profiting by approving more new listings than necessary.
“The HKEX chief executive is only one of 28 members of the listing committee. But the market still had the perception of a conflict of interest of the exchange’s role in the listing approval process.
“The HKEX chief executive is only one of 28 members of the listing committee,” said Graham.