HKEx delisting rules may be set to change
Updated: 2016-02-03 08:02
By Bloomberg in Hong Kong(HK Edition)
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As of Dec 31 last year, trading in 51 companies had been suspended for more than three months on the Hong Kong stock market, according to the bourse. Bobby Yip / Reuters |
Hong Kong Exchanges and Clearing Ltd (HKEx) will review prolonged stock trading suspensions in response to investor concerns over being unable to exit some of their holdings.
Institutional investors represented by groups including the Hong Kong Investment Funds Association (HKIFA) and Alternative Investment Management Association (AIMA) have raised the matter with the stock exchange and the regulatory Securities and Futures Commission (SFC), according to officials.
The aim is to improve Hong Kong's delisting policy, which can see shares halted for years before they are removed from the market.
Hong Kong authorities are examining measures to force "an orderly exit of poor quality companies and provide a deterrent effect on companies committing material breaches" of listing rules, an exchange spokesman said in an e-mailed statement to Bloomberg.
HKEx will consult market participants on proposed amendments to the procedure to bring its "practices more in line with other major markets," he said.
HKIFA, whose members include BlackRock Inc and the asset management unit of JPMorgan Chase & Co, has raised the issue of prolonged trading suspensions with the city's financial markets regulator as well as HKEx, said Sally Wong, chief executive officer at the association.
"Trading halts should only be invoked if it is absolutely necessary" and there is room for improvement in the rules, Wong said by e-mail.
The AIMA, which represents hedge funds, has discussed with HKEx ways to improve share suspension rules, a person familiar with the matter said on condition of anonymity.
As of Dec 31, trading in 51 companies had been suspended for more than three months on the Hong Kong stock market, according to HKEx data. First Mobile Group Holdings Ltd has been halted for the longest, since November 2009. In December last year, HKEx announced plans to delist China Metal Recycling Holdings Ltd, which stopped trading in January 2013. HKEx Chief Executive Charles Li Xiaojia pledged to review listing rules and suspensions during his three-year strategic plan presentation on Jan 21.
(HK Edition 02/03/2016 page8)