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By Elzio Barreto
HONG KONG, Sept 15 (Reuters) - Hong Kong’s securities regulator and the stock exchange on Friday proposed a new listing policy panel as part of their initiative to improve transparency and governance in the Asian financial hub.
The final proposals underscore the Securities and Futures Commission’s (SFC) desire for a “more direct presence” in listing regulation and to become more active in objecting to certain listings, according to conclusions from the consultation process that started in June 2016.
The consultation drew nearly 9,000 submissions from market participants and pitted the city’s banks and the Chamber of Hong Kong Listed Companies against international asset managers who favoured tougher scrutiny of listing candidates.
The chamber and banking sector have pushed back against reforms over fears they could give the SFC too much power and potentially stymie the market for initial public offerings (IPOs)..
“We have been demonised,” SFC Chairman Carlson Tong told a news conference. “If we are too popular with the market, we are not doing a very good job as a regulator. Our job is to ensure quality in the market.”
The proposals made in June 2016 suggested the creation of two new committees to develop and regulate listing policies in Hong Kong. The CEO of Hong Kong Exchanges and Clearing (HKEx) would no longer sit on the listing committee while the SFC’s chief executive would sit on a newly created listing policy committee.
The proposed changes followed investor criticism of possible conflicts of interest in the current framework, wherby HKEx acts as both the profit-driven market operator and regulator of IPOs. HKEx has also clashed with the SFC over listing matters.
The new policy panel would be set up as an “advisory, consultative and steering body” outside the SFC and the HKEX to initiate and centralise discussion of listing policies, according to a joint statement.
Editing by Nick Macfie and David Goodman