SFC endorses Stock Exchange of Hong Kong’s initiative to tackle backdoor listings

The Hong Kong Securities and Futures Commission (SFC) has shared its support of the proposals in the Stock Exchange of Hong Kong Limited’s (Exchange) consultation paper published today relating to backdoor listings and shell activities.

These proposals are part of a series of initiatives to address concerns about problematic corporate and market conduct and represent an intensified effort on the part of the SFC and the Exchange to maintain the quality and the integrity of the Hong Kong market.

The consultation is part of a broader review of regulation concerning listed companies, which has already resulted in a series of changes over the past year, including reforms aimed at curbing sharp share price movements of GEM stocks on their trading debuts and highly dilutive capital-raisings that are prejudicial to minority shareholders.

The regulatory challenges we are facing in today’s listed market are increasingly complex but we believe that successive regulatory initiatives – both those pursued by the SFC itself and the outcomes of our collaboration with the Exchange – have had a positive impact on market quality”, said Mr Ashley Alder, the SFC’s Chief Executive Officer.

We will continue to focus on behaviour in the listed market which is harmful to the investing public. We will not hesitate to step in at an early stage under our ‘front-loaded’ approach where we see misconduct or other serious issues which justify intervention under the Securities and Futures Ordinance,” Mr Alder added.

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