Listing reforms have made Hong Kong more competitive, says new financial advisory council chief

Laurence Li Lu-jen, who takes over as chairman of Hong Kong’s Financial Services Development Council, said on Tuesday listing reforms and other measures introduced by the government recently had enhanced the city’s competitiveness as a financial centre.

Li was speaking in the immediate aftermath of Chinese smartphone maker Xiaomi’s flotation in Hong Kong, which only raised US$4.72 billion instead of the expected US$10 billion. It also meant the city was unable to reclaim its crown as the world’s top IPO market – it ranked third globally in the first half of 2018, the same as last year.

“The council does not focus on the ranking of IPO markets. We support the listing reform introduced by Hong Kong Exchanges and Clearing, and believe it is working in the right direction, promoting innovation and technology development in the city,” Li, a barrister, told a press conference. “We cannot control how the market reacts to reforms,” he added.

Li was appointed by the government on Friday and will assume the post of chairman on Wednesday, taking over from Laura Cha Shih May-lung, who in April became the first woman to chair bourse operator HKEX. He will be in office until January 16, after which he will continue as the chairman of the council, which will be incorporated as a company, for another two years.

Joining the council in 2013, Li has been pushing for reforms such as those introduced this year by the HKEX, allowing companies with dual-class share structures and biotechnology firms with no revenue to list in Hong Kong.

He said he would continue to promote financial technology and investor protection in his new role.

“One of the tough tasks ahead is turning the FSDC into an incorporated company early next year, which will allow it to have more resources and hire professionals for research and promotion,” said Li.

The council currently relies on government secondment or voluntarily staff for research and promotion. The government last year announced it would turn the council into a government-funded corporation with a budget of HK$32 million, including HK$11 million for setting up an office and hiring 13 staff members.

Cha, who was present for the press conference, said she had known Li for more than 20 years, since their time together at Hong Kong’s Securities and Futures Commission in the early 1990s.

“Over the past five-and-half years, the council has completed 35 reports on how to promote Hong Kong as a financial centre. I believe Li will continue to lead the council, to work further to promote Hong Kong,” she said.

The FSDC was set up by Hong Kong’s former chief executive, Leung Chun-ying, as an advisory body to conduct research into improving the competitiveness of the city’s financial market and promoting it in international financial circles.