Stock exchange rules being simplified

Aims to restore Hong Kong as world’s leading IPO center.

The Hong Kong Monetary Authority and the Hong Kong Exchanges and Clearing Ltd (HKEx), operator of the stock exchange, are working on rule changes to make foreign company listings in the stock market simpler and easier for investors to understand.

The two organizations are trying to simplify the rules for primary and secondary listings to create a set of core principles that are transparent, clear and easy to understand for companies, investors and regulators,.

Hong Kong lost its position this year as the world’s initial public offering leader, a distinction it held for three years. Hong Kong’s decline was mostly due to the collapse in activity from big Chinese state-owned firms, which are not considered foreign companies.

HKEx has been trying to move its business away from its heavy reliance on Chinese equity listings by trying to attract more primary and secondary listing from overseas and more recently by buying the London Metal Exchange.

It reported a 19% drop in its third-quarter net profit. The stock exchange operator said its net profit for the three months ended September 30 was HK$1.00 billion compared to HK$1.24 billion year-on-year. For the first nine months of the year, HKEx’s net profit fell 16% to HK$3.22 billion from HK$3.82 billion.