Submissions and Reports

The Chamber commends the Government's ongoing efforts to advance the Northern Metropolis (NM) mega-project and have submitted our latest general recommendations to support its comprehensive development in the short and medium term. Specifically, we have conveyed our members' perspectives on the design and execution of the Pilot Large-Scale Land Disposal Scheme, emphasizing key considerations such as financial and investment aspects, as well as land supply and management challenges. These insights aim to encourage industry participation and foster effective collaboration with the Government in building this new metropolis.

The Chamber expresses in principle support to the HKEX’s proposals to enhance its IPO Price Discovery and Open Market Requirements framework, recognizing that this approach aligns with internationally recognized best practices for regulation, focusing solely on instances where a clear and demonstrable need for regulation is necessary. As part of our recommendations, we advocate that the requirement of enhanced disclosure in the IPO listing prospectus of a possible downward adjustment of up to 10 per cent below the indicative offer price be removed, as investors’ interests are sufficiently protected by present rules.

The Chamber expresses general support for the HKEX’s proposals to expand its paperless listing regime, thereby elevating Hong Kong’s regulatory framework for listed companies to align with global sustainability objectives. Taking note of the current market landscape, we nevertheless advocate for the incorporation of a degree of flexibility into the regime, with consideration of the practicability of some of the digitalisation proposals, such as that related to corporate communications, payments and web accessibility. Such an approach would facilitate a balanced addressing of the needs of listed issuers, securities holders and investors.

The Chamber acknowledges the HKEX’s efforts to enhance the corporate governance of listed issuers to strengthen Hong Kong’s competitiveness as a leading financial hub, as well as align to with international practices. Notwithstanding the forgoing, we put forward the recommendation that many of the proposed new rules – including that related to board governance effectiveness and independence - would merit further assessment on their necessity, as well as potential benefits and drawbacks of implementing them in the local context, in light of their potential impact on the general business community. In making such a suggestion, the Chamber draws from the principles of the globally recognized regulatory impact analysis approach, which considers the need for the identification of concrete issues that require tackling when implementing new regulatory initiatives.

The Chamber recognizes the objectives of present industry-led efforts to develop a Voluntary Code of Conduct for ESG ratings and data products providers (the Code), and regards this form of regulatory intervention as a proportionate measure, to foster the growth of a transparent and trusted market for the sector, and to facilitate companies due diligence in light of increasing sustainable investment awareness.
In relation to the design and implementation of the proposed Code, we suggest amongst others, that consideration be given to incorporating suitable flexibility and interoperability to facilitate voluntary adoption by the wider business community, in the light of potential resource and real data provision challenges.

The Chamber generally supports the Government’s proposals to transform Lau Fau Shan into a tech hub and eco-tourism hotspot, in line with its blueprint for the development of the Northern Metropolis. We recognize that such efforts would benefit businesses, particularly the tech sector, through creating opportunities for cross-border corporate synergies and development alongside Qianhai and Nanshan in Shenzhen.
At the same time, we highlight several conceptual and practical issues relating to these proposals, which we suggest that the Government take into consideration when taking forward the megaproject.

The Chambers continues to express support for the Government’s efforts in developing a robust market for VA development in Hong Kong, thereby recommending that the development of the proposed licensing regime for over-the-counter VA trading services strikes a balance between facilitating the continued demand for VA trading opportunities amidst the rapidly evolving digital landscape, against the need to safeguard investor interests and preserve market integrity.
In its response, the Chamber also puts forward suggestions on the execution of the legislative proposals, in such aspects as the scope of services which would be permitted under the new licensing regime as well as the proposed supervisory scope.

The Chamber welcomes the HKEX’s proposals to enhance the GEM Listing regime in light of the recent significant decline of listings. We nevertheless suggest that greater strides should be taken to attract GEM’s main intended beneficiaries – growth and small and medium sized companies (SMEs), who are crucial contributors to Hong Kong’s economy and prosperity as an international financial city – so as to facilitate the success of such reforms. Recommendations on how to achieve such objectives, comprising cost reduction and relaxing financial eligibility requirements for GEM listing, reducing the profit requirement for entry to the Main Board, as well as enhanced promotion and outreach, are also outlined in the response.

The Chamber is generally supportive of the Hong Kong Monetary Authority’s proposals to simplify the existing three-tier banking system – through merging Deposit-taking Companies with Restricted Licence Banks to form a new second-tier - and recognize the benefits of such reforms as enhancing the industry’s role in strengthening Hong Kong’s status as an international financial centre. At the same time, we suggest that consideration could be given to further consulting key industry stakeholders on the potential implications of such changes on the banking system, so as to achieve a balanced and sustainable implementation of the initiative.

The Chamber welcomes the SFC’s introduction of a new regulatory framework for licensed virtual asset trading platform (VATP) service operators as well as proposals to allow retail investors to access services delivered by the former, provided that there is balance between supporting the development and demands in virtual asset trading, and providing robust protection to investors and market integrity. At the same time, the Chamber notes that there exist differences in industry views on the necessity and sufficiency of certain proposed investor protection mechanisms.