Stand and deliver

26 June 2015 By Peter Thal Larsen Follow @Peter_TL

By rejecting the stock exchange’s plan to weaken “one share, one vote” rules, the SFC has acted for the long-term good. Some companies might follow Alibaba and list elsewhere. But overall, public investors should benefit. It’s a welcome stance as China’s capital markets open up.

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Hong Kong’s securities regulator on June 25 rejected draft proposals by the city’s stock exchange to change listing rules that saw the bourse lose Alibaba Group Holding’s record $25 billion public offering to New York last year.

The Securities and Futures Commission (SFC) said its board had unanimously concluded it did not support the draft proposal to introduce so-called weighted voting rights for primary listings put forward by Hong Kong Exchanges and Clearing (HKEx).

A source familiar with the SFC’s thinking told Reuters it decided to make the statement after reviewing the HKEx’s proposal at its regular meeting, adding the watchdog felt it was in the public interest to make its position on the subject clear to reduce market uncertainty.

The source familiar with the SFC’s thinking said the board still had an open mind on whether weighted voting rights could apply to secondary listings in Hong Kong, but that the HKEx’s proposal on this issue was not fully developed.

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