SFC maintains a neutral attitude towards HKEx's "share ownership" system consultation

December 11 Afternoon news in order to attract Alibaba Group to come to Hong Kong for listing, the HKEx (00388-HK) would like to consult on whether Hong Kong's current "same-share" system needs to be revised. Alder, chief executive of the SFC, said today that the SFC has a neutral attitude towards the consultation. However, the Secretary for Financial services and the Treasury, Chan, has said recently that "same-share rights" are the conditions for quality corporate governance, and the performance of such enterprises is mostly to win "different rights" companies.

Alibaba's listing in Hong Kong includes a "partner system" listing, where the partner will hold a smaller share but have a larger control over the company, which is inconsistent with the existing listing rules in Hong Kong. The HKEx held a quarterly policy meeting on the listing Committee at the end of October to promote public consultation on the review of the equity structure, or to revise the listing rules to meet Alibaba's requirements. The listing staff of HKEx have already conducted research work on different shareholding structures, and the market expects the HKEx to commence market consultation at the end of this year or early next year.

Alder, chief executive of the SFC, was also asked about Alibaba's listing in Hong Kong today, saying that the HKEx had a neutral attitude to the SFC, and that he believed that the HKEx could be "free" and "open" to discuss with the market.

Before the policy meeting of the HKEx, the Hong Kong Financial Secretary, Mr John Tsang, had publicly stated that the SFC and HKEx could promote consultation on the change of listing rules and that if the rules were considered necessary, they could seek appropriate ways to deal with them and be regarded by the industry as supportive of the amendment rules. However, the Secretary for Financial services and the Treasury, Chan, has expressed different views recently.

Chan quoted the study last week as saying that "same-equity" is a condition for quality corporate governance, which respects all shareholder rights, and most of its share price performance wins "shares of different rights" structures. Chan said that he did not deliberately comment on individual companies, but only wanted to explain the overall trend and that good corporate governance would increase confidence in the market and would be an important cornerstone in maintaining good market quality.

It is believed that Chan this word "complications", it is likely to be targeted at Alibaba in Hong Kong listing. If the Hong Kong government does not welcome the "different rights" of the same shares, the HKEx's plan to liberalize the listing rules and allow companies to list "shares of different rights" may encounter obstacles. (Peng)