The Hong Kong Stock Exchange (Stock Exchange) and the Securities and Futures Commission (SFC) have jointly announced their consultation conclusions on proposals to revamp the regulatory structure for making decisions in listing related matters. The June 2016 consultation (summarised in our earlier bulletin) generated considerable negative market feedback resulting in a change of approach by the SFC and Stock Exchange. The consultation conclusions modify the original proposals, taking account of the views raised.

The originally proposed Listing Policy Committee is to be replaced with the Listing Policy Panel (LPP) with the same remit to advise on listing policy with broader regulatory and market implications. The LPP will be formed by a memorandum of understanding between the SFC and the Stock Exchange rather than being a committee under either of them.

The proposal to introduce a Listing Regulatory Committee responsible for deciding, and providing guidance on, listing applications and matters relating to suitability or broader policy concerns has been dropped. However, the SFC has, in tandem, modified its approach to its role in regulation to separately achieve a greater involvement in the decision making process. This approach was made public in a recent speech by the SFC’s Chief Executive Officer, Ashley Alder, and in the its new Regulatory Bulletin launched on the same day.

In our recent bulletin, we briefly examine the proposals being taken forward by the SFC and the Stock Exchange. If you wish to discuss this further, please do not hesitate to reach out to our Hong Kong team, the contact details of which are set out in the bulletin.