Hong Kong's financial regulators have pledged to ease listing requirements for mainland Chinese companies, as they eye the city's stock market as a source of funding to support their global ambitions.

Secretary for Financial Services and the Treasury Christopher Hui Ching-yu said on Thursday that the Securities and Futures Commission (SFC) and Hong Kong Exchanges and Clearing Limited (HKEX) were studying how to fine-tune existing listing rules.

The market watchdog and the bourse operator would propose revisions later this year, aiming to lower the fundraising threshold, optimise market structure and improve corporate governance, Hui said at a conference in Shenzhen.

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The regulators "are conducting comprehensive studies and will unveil proposed measures to improve the existing [fundraising] system within this year," he said at a meeting of the Shenzhen-Hong Kong Financial Cooperation Committee. "We hope to further facilitate mainland companies, including firms in Shenzhen, to raise capital."

The committee, established in June 2024, focuses on the two cities' financial ties and the development of the Greater Bay Area's financial infrastructure.

Hui's statement is expected to spark enthusiasm among mainland firms for initial public offerings (IPOs) in Hong Kong as they pursue fresh capital to power their expansion.

The city's IPO market is recovering from a years-long slump as more mainland-listed companies pursue flotations.

About 100 companies were in the IPO pipeline, Bonnie Chan Yiting, CEO of HKEX, said last month.

A view of Exchange Square in Central, home of Hong Kong's stock exchange operator, on January 9, 2025. Photo: Jelly Tse alt=A view of Exchange Square in Central, home of Hong Kong's stock exchange operator, on January 9, 2025. Photo: Jelly Tse>

The city's high-quality and international professional-services sector could assist in further liberalisation of the mainland's financial markets, Hui said at the meeting.

Over the past two years, regulators from both Hong Kong and the mainland have stressed the importance of closer links between the capital markets to buoy the Chinese economy.

They also highlighted Hong Kong's role as a bridge between the mainland and global markets, while promising to create more cross-border schemes to allow greater capital flows.

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"Mainland companies, particularly those that are keen on internationalising their businesses, will treat Hong Kong as their top choice when looking to raise funds," said Ivan Li, a fund manager at Loyal Wealth Management in Shanghai. "Most of them are eager to know to what extent the Hong Kong regulators will lower listing requirements and streamline application procedures."

Carlson Tong Ka-shing, HKEX chairman, said early this month that the exchange received 30 IPO applications in January, including seven so-called A+H applications, referring to companies that already have mainland-listed shares, or A shares, and want to add Hong Kong shares, or H shares. A total of 10 such applications were under processing, he said.

On Tuesday, Contemporary Amperex Technology, also known as CATL, submitted its listing application draft with the Hong Kong exchange. The company is expected to raise at least US$5 billion in what could be the city's biggest IPO in more than four years.

The world's largest producer of batteries for electric vehicles (EVs), based in Ningde, in east China's Fujian province, said proceeds from the proposed IPO would reinforce its global expansion, which would enhance China's dominance in the EV supply chain.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.

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