Hong Kong bourse relaxes mainland firms’ listing rules
HONG KONG: Hong Kong's stock exchange has defended a decision to let Chinese companies listing on the exchange use mainland accounting standards and auditors, saying it will increase efficiency and reduce costs.
However the move came in for criticism Monday that it might lead standards to slip.
In a statement Friday the bourse said the amendments to listing rules, which limit the Hong Kong regulator's ability to tackle fraud, would take effect Wednesday this week.
The changes force the city's Securities and Futures Commission (SFC) to rely on mainland authorities to act against mainland auditors suspected of wrongdoing. Previously, the SFC could hold the Hong Kong-based auditor of a mainland company listed in Hong Kong accountable.
At present, mainland companies must prepare one set of financial statements based on local standards and another based on Hong Kong standards, but the amendments allow them the option of preparing just one set. "This is expected to increase market efficiency and reduce compliance costs of mainland incorporated companies listed in Hong Kong," Mark Dickens, Hong Kong Exchanges and Clearing's head of listing, said in a statement.
However Jamie Allen, secretary general of the Asian Corporate Governance Association, told AFP the changes would add to uncertainty for investors. -Ap