Hong Kong plans to expand its “name-and-shame” regime for sloppy listing applications to include law firms and auditors, stepping up a campaign to improve the quality of initial public offerings in the city.
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Under a new Enhanced Return Mechanism proposed by Hong Kong Exchanges & Clearing Ltd. on Friday, all professional parties involved in a deal will be publicly identified if a listing application is rejected for being “not substantially complete.”
The proposal, unveiled in a
The bourse operator is looking to increase accountability across the entire IPO pipeline, arguing that broader public exposure will act as a more effective deterrent against substandard work.
Law firms and reporting accountants would join sponsors in the public spotlight if a filing fails to meet basic standards, in order to provide an incentive for all parties to ensure documents are “ready-to-publish” upon submission.
The move comes as Hong Kong seeks to bolster its reputation as a global financial hub by ensuring higher disclosure standards. By including legal and accounting advisers in the public record of failed applications, the exchange aims to force more rigorous due diligence before filings ever reach the regulator’s desk.
Others that would be singled out are industry consultants, experts who have consented to include their comments in the listing applications and promoters of SPAC transactions.
The public has until May 8 to submit comments.
At the same time, the exchange
The local regulator has also increased scrutiny over bankers’ work on initial public offerings, asking for improvement plans and capped the number of deals principal bankers can sign off at one time.
The audit regulator also
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