HONG KONG Exchanges and Clearing Ltd. (HKEX) said Friday that it would seek to tighten listing rules to prevent the formation of shell companies and backdoor listings. HKEX, operator of Hong Kong’s stock exchange, has been concerned about shell companies, public firms that do little real business but remain listed in order to be purchased by firms that wish to go public but are unable or unwilling to go through the usual channels. Along with Hong Kong’s Securities and Futures Commission, HKEX has recently issued a number of pieces of guidance, but is now attempting to formalize these and has published a consultation paper seeking market views on its proposed changes. “While shell activities are limited to a small segment of our market, they undermine investors’ confidence and overall market quality,” said David Graham, HKEX’s head of listing. “At this point, there is a need to formalize our guidance into the rules, and to make rule amendments to address some issues in a more effective manner,” he said in a statement. (SD-Agencies) |