Hong Kong bourse proposes changes to encourage more secondary listings

[HONG KONG] The Hong Kong Stock Exchange proposed changing its rules to make it easier for Chinese companies from traditional industries to carry out a secondary listing in Hong Kong, in a consultation paper released on Wednesday.

Taking advantage of a 2018 rule change, about 13 US-listed Chinese firms including Alibaba Group, and Baidu have conducted secondary listings worth a combined US$36 billion in Hong Kong over the past 16 months, Refinitiv data showed.

However, under those rules this option was restricted to "innovative companies" with a "centre of gravity in Greater China".

The new proposals remove this requirement for Chinese companies as long as they have a one-share, one-vote structure.

They also make it easier for certain Chinese companies with secondary listings in Hong Kong to change to having a dual primary listing and regularise shareholder protections regardless of a company's listing type.

Non-Chinese companies currently have more options for carrying out secondary listings in Hong Kong than Chinese ones.

"We believe our latest proposals to streamline requirements and enhance our listing regime will attract more international and Mainland (Chinese) companies," Bonnie Chan, head of listing for the stock exchange operator Hong Kong Exchanges and Clearing , said in a statement.

REUTERS