June 12, 2017 / 10:18 AM / 2 months ago

UPDATE 1-Hong Kong stock exchange to launch trading board consultations on Friday

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HONG KONG, June 12 (Reuters) - The Hong Kong stock exchange will launch on Friday long-awaited consultations on a review of the city's growth enterprise market (GEM) board and on whether to establish a trading board for young firms with non-standard share structures, its CEO said.

This comes amid general debate about Hong Kong's corporate governance rules and attractiveness as a listing destination. The city was the world's biggest IPO venue last year but has struggled to attract technology and so-called new economy companies due to its profitability requirements and ban on weighted voting rights, which many tech firms prefer.

"Details of the reform of the second board (GEM) and the introduction of the third board will be announced this Friday," Chief Executive Charles Li said at an event in Hong Kong on Monday. "We believe all that will help maintain Hong Kong's competitiveness."

Concerns have grown over the quality of companies listed on the GEM board, with many stocks jumping sharply on the first day of trading, fuelling fears over market manipulation, Li said.

On the long-awaited bond connect scheme to link China's $8 trillion bond market with overseas investors, Li said only that the HKEx was "rushing" to get everything in place.

Plans for a "Bond Connect" programme have been percolating since Beijing launched a scheme allowing two-way trading between the Hong Kong and Shanghai stock markets in 2014, but the authorities have provided few details on the mechanics or the timeline. (Reporting By Michelle Price and William Ho, Writing by Anne Marie Roantree; Editing by Himani Sarkar)

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