SFST's speech at Hong Kong Investor Relations Association 8th IR Awards Presentation Ceremony (English only)
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Eva (Dr Eva Chan, Chairman of HKIRA), distinguished guests, ladies and gentlemen,
It is my great honour to be here again attending the Investor Relations Awards Presentation Ceremony organised by the HKIRA. Today's presentation ceremony brings together the corporates getting rewarded as well as their executives, IR practitioners and other stakeholders in our industry. Two years ago we met online due to the pandemic, so I am particularly pleased that I can meet all of you - our investor relation professionals, physically right here this year.
The year of 2022 is a milestone for Hong Kong, marking the 25th anniversary of our return to the motherland. As a member of the financial services circle, I believe you would appreciate that with our unique strengths, such as institutional advantages under "one country, two systems", a fine tradition of rule of law, a market-oriented and internationalised business environment, robust infrastructure support, internationally aligned regulatory regimes, a full range of financial products and free flow of information and capital, Hong Kong has remained resilient in weathering different challenges while consolidating our status as an international financial centre after 25 years as a Special Administrative Region.
As a major global listing platform for companies from different jurisdictions, the Government, financial regulators and the Hong Kong Exchanges and Clearing Limited (HKEX) have all along strived to develop Hong Kong into a deeper and broader fundraising platform. Further to the series of reforms in 2018 in facilitating listings of companies from emerging and innovative sectors in Hong Kong, including high growth and innovative companies that have weighted voting rights (WVR) structures and pre-revenue/pre-profit biotechnology companies, we have spared no efforts to continuously modernise our listing regime with a view to capturing new opportunities presented by the changing global financial landscape.
In January this year, considering that an increasing number of China Concept Stocks may choose to return from overseas markets and the demand for such listings is expected to continue to grow in future, HKEX launched further reforms to enhance the listing regime for overseas issuers to list in Hong Kong. The reforms include allowing Greater China companies from traditional sectors without WVR structures to seek listings; and providing greater flexibility for Greater China issuers seeking dual-primary listings whilst retaining their existing WVR structures and variable interest entity structures. The measures are conducive to attracting quality China Concept Stocks to return while balancing the risks involved and investor protection.
In the same month, HKEX also launched a new listing regime for Special Purpose Acquisition Companies (SPACs), which is a type of company that raises funds through an IPO to conduct a business combination with an operating company within a pre-defined time period. It broadens the source of listing in Hong Kong and enhances our product offerings, thereby further strengthening Hong Kong's position as a premier fundraising platform, while imposing relevant requirements to uphold investor protection. As at August 2022, three SPACs were already listed.
To facilitate the fundraising of technology companies, and considering that some large-scale advanced technology enterprises require substantial capital for their research and development work but are not qualified for listing yet, SFC (Securities and Futures Commission) and HKEX are reviewing the Main Board Listing Rules and, having due regard to the risks involved, examining the revision of the listing requirements to meet the fundraising needs of such enterprises. HKEX is approaching different stakeholders for views, with a view to putting forward concrete recommendations as soon as practicable for consulting the market publicly.
Being strategically located at the gateway of the Mainland, we have strived to seize Hong Kong's unrivalled advantages and made continued efforts in expanding the mutual market access programmes in a gradual manner. In addition to the Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect and Bond Connect which have thrived over the past few years, the recent inclusion of exchange-traded funds (ETFs) in Stock Connect and approval by Mainland and Hong Kong regulators for establishing Swap Connect have added to the appeal of Hong Kong's unique role as the largest global offshore Renminbi (RMB) business hub.
And just earlier this month, the China Securities Regulatory Commission announced that it will take forward three initiatives that carry significant meaning to the deepening of mutual access between the Mainland and Hong Kong financial markets. First, to include securities of overseas enterprises that are primary listed in Hong Kong in the eligible scope of Southbound Trading under Stock Connect. Second, to study the proposal to set up an RMB securities trading counter under Southbound Trading of Stock Connect, and third, to support the issuance of Mainland government bond futures in Hong Kong.
These three measures are significant milestones of the mutual market access and have demonstrated to investors once again our country's strong support for Hong Kong in consolidating its status as an international financial centre and meeting the goals in the National 14th Five-Year Plan. They will broaden the scope for the future development of Hong Kong's securities market, particularly the internationalisation of our listed markets for equities as well as the issuance and trading of RMB securities. Not only will they facilitate Mainland investors to enrich their investment choices via Southbound Trading of Stock Connect, but also offer offshore risk management tools for Hong Kong and overseas investors to participate in the Mainland government bond investments, and deepen the development of Hong Kong's offshore RMB market. All these will be highly conducive to adding vibrancy to our securities market and further enhancing our competitiveness as a go-to listing platform for global issuers.
While we are well-positioned to capitalise on the opportunities to further develop our capital market, equally important is that we should enhance our market quality and safeguard investors' interest. To this end, continuous efforts have been made to improve corporate governance of our listed companies and maintain a high level of investor protection.
Among others, to address the difference in shareholder protection standards under the laws of different jurisdictions, upon consulting the market, HKEX implemented a set of Core Shareholder Protection Standards applicable to listed companies from different jurisdictions in January 2022. These protection requirements cover arrangements of general meetings, shareholders' rights, etc, with a view to establishing the same level of protection to investors.
In addition, further to its market consultation launched in April 2021 on proposals to enhance corporate governance standards and practices among listed issuers, HKEX implemented the revised Corporate Governance Code and Listing Rules in January 2022. The revisions cover a wide range of areas such as corporate culture, board independence and refreshment, board diversity, shareholder communication policy, and timely disclosure of Environmental, Social and Governance Reports. For instance, the specific revisions include requiring issuers to put in place anti-corruption and whistleblowing policies, introducing requirements on board refreshment and succession planning, etc.
In developing Hong Kong into a broader and deeper fundraising platform, the Government weighs equally the importance of upholding our market quality. Going forward, the Government will continue to strengthen Hong Kong's competitiveness as a global listing platform and ensure the appropriate safeguards for our investors, with a view to reinforcing Hong Kong's position as an international financial centre.
Finally, I would like to send my congratulations to this year's deserving winners and many thanks to the Hong Kong Investor Relations Association for organising this meaningful event today. To me, one key feature or characteristic of the IR award is about storytelling. In fact, I have a lot to learn from the award this year today because not only you have to tell your corporate story, we as officials also have to tell our Hong Kong stories. And on this front, I will be going to Manila in two weeks' time to attend the Asian Development Bank's Annual Meeting and also will have some official meetings there, hopefully, to showcase to the rest of the world about Hong Kong's financial story. While we are organising the FinTech Week and the investment summit that will have people to come, we also have to go out and proactively share our Hong Kong financial story, and in which HKIRA plays a key part. I definitely look forward to collaborating further with HKIRA to improve corporate governance with a view to further enhancing the quality of our listing platform and staying competitive around the globe. Thank you.
Ends/Thursday, September 15, 2022
Issued at HKT 16:09
Issued at HKT 16:09
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