Activist Webb pushes for even more radical listing reforms

Top News | Esther Yu 7 Sep 2016

Stock market activist David Webb has shown support for the ongoing consultation on listing regulations as the Chamber of Hong Kong Listed Companies - which opposes the reform - holds a forum with regulators today.

Webb is pushing for even more radical reforms, with the regulator - the Securities and Futures Commission - taking over the exchange listing functions.

In a submission response to the consultation paper, the deputy chairman of the SFC's Takeovers and Mergers Panel said the reform will "clear the way for a more rapid and meaningful pace of reforms to the Listing Rules on corporate governance and disclosure."

Under proposed changes, a listing regulatory committee is to be created to oversee IPO cases involving suitability issues.

Half of the committee's members are to come from the SFC and half from Hong Kong Exchanges and Clearing (0388).

A listing policy committee is to be formed to make and change listing rules, which is also to be composed of equal representation from the HKEx and the SFC.

At least one member of the exchange's listing committee must be an investor representative, and Webb believes that "in the event of disputes, decisions will swing 5:3 in favor of investors."

He hopes the listing rules committee will get reforms back on the agenda in the future.

"That reform process should raise HK's future competitiveness in the face of competition from the mainland as capital controls are gradually lifted," he wrote.

On concerns that the LRC will result in what opponents called a "regulator- based" regime, Webb said they made no sense because the SFC already has a veto over new listings.

But Webb believes there is more to be done.

The current reform is a politically compromised plan, producing only half of what the government-appointed expert group recommended back in 2003.

The recommendation urged a transfer of the listing function from HKEx to the SFC, and the exchange can charge "admission fees" to make up for lost profit from the listing function.

The three-month consultation will end on September 17.

Among those who oppose the reform are Chamber of Hong Kong Listed Companies vice chairman Lo Ka-shui and HKEx director Vincent Lee Kwan- ho.

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