Date
19 January 2017
SFC chairman Carlson Tong says regulators should look into the suitability of a company for a public listing, not just whether it meets the profit requirement. Photo: HKEJ
SFC chairman Carlson Tong says regulators should look into the suitability of a company for a public listing, not just whether it meets the profit requirement. Photo: HKEJ

SFC chief says third board not suitable at this time

Hong Kong securities regulators are cracking down on backdoor listings to guard against inferior stocks.

A growing number of companies are exploiting listing loopholes to gain entry to the stock market for the purpose of selling out at a later stage, the Hong Kong Economic Journal reports, citing Securities and Futures Commission chairman Carlson Tong.

These include using shell companies as a vehicle for backdoor listings. 

“We should look into the suitability of a company for a public listing, not just whether it meets the profit requirement,” Tong said.

He said a third board is not ideal at this time given that the Growth Enterprise Market (GEM) has yet to have a concrete identity.

The market can’t decide whether the GEM board is for high-tech companies similar to NASDAQ or some kind of incubator to nurture smaller players, he said.

David Graham, chief regulatory officer and listing head of Hong Kong Exchanges and Clearing Ltd. (00388.HK), said the stock market operator will review both GEM and the proposed third board.

No timetable has been set.

[Chinese version 中文版]

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