Update | HKEX rekindles plans for dual-class share structure in Hong Kong

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Launch would attract more technology and new-economy firms to list in city, says Charles Li; SFC fails to endorse move ‘until proposals more fully developed’

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Charles Li says the third board could be home to different types of companies, be they start-ups with a good potential or well-established companies that want to be listed with a dual-class structure. Photo: Dickson Lee

Enoch Yiu

Published: 3:27pm, 19 Jan 2017Updated: 10:57pm, 19 Jan 2017

Hong Kong may change its listing rules and introduce a dual-class share structure after the exchange operator said it plans to consult the market on the launch of a third board in an effort to attract more listings by technology and new-economy firms.

Top of the agenda was the controversial issue of whether a dual-class shareholding structure should be allowed, Hong Kong Exchanges and Clearing chief executive Charles Li Xiaojia said on Thursday.

Charles Li says HKEX is working with the mainland to expand the stock link to bonds, exchange-traded funds and commodities. Photo: Bloomberg

The bourse consulted the market two years ago on the dual-class structure, which, if it were to go ahead, would have allowed one class of shareholders more rights than others.

However, the Securities and Futures Commission opposed the proposal due to what it claimed was insufficient investor protection – a subject that is likely to dominate discussions this time round again.

“Consultation on the third board will cover the dual-class shareholding structure, which companies should be [allowed] to list and who should be allowed to trade,” Li told the media briefing. “There should also be a delisting mechanism to remove poor performers from the board.”