SFC statement on the SEHK’s draft proposal on weighted voting rights

25 Jun 2015



The Securities and Futures Commission (SFC) issues the following statement in relation to The Stock Exchange of Hong Kong Limited’s (SEHK) draft proposal on weighted voting rights (WVR).

The SEHK’s Consultation Conclusions on WVR published on 19 June 2015 outlined some of the relevant features of the draft proposal for a second stage consultation on WVR. The SFC has considered a more detailed version of the proposal.

The Board of the SFC has unanimously concluded that it does not support the draft proposal for primary listings with WVR structures.

The Board’s views are set out below.

Eligible applicants would be required to have a very high expected market capitalisation

The SEHK would expect eligible applicants to have certain features relating to their businesses and the contribution of their founders as identified in a set of “enhanced suitability” criteria

WVR structures would be permitted for new listing applicants only (with appropriate anti-avoidance measures)

A focus of the discussion to date on WVR has been competition from the United States for the listing of Mainland China businesses. Hong Kong’s business and competitive environment is affected by many factors and can change significantly within a relatively short period. In carrying out its regulatory functions, the SFC considers both long term and short term objectives and seeks to uphold the core principles of fairness and transparency which underpin Hong Kong’s reputation as an international financial centre.

The Board of the SFC has noted the extensive local and international public debate on and widespread coverage of the WVR issue over many months and has discussed the importance of Hong Kong’s reputation as an international financial centre. Against this background, the Board decided that it is in the public interest to issue this statement.

End



Page last updated : 25 Jun 2015