Hong Kong’s financial regulator plans to launch a consultation in the first half of 2027 on streamlining prospectus disclosure requirements for initial public offering (IPO) applications, as part of efforts to boost the competitiveness of the city's listing regime while safeguarding market integrity and stability.

“Our objective is not less disclosure, but better disclosure: clearer, more focused and more useful to investors, while making transactions easier and more cost-effective,” said Julia Leung Fung-yee, chief executive officer of the Securities and Futures Commission (SFC).

To support the implementation of the special administrative region’s five-year plan and the 2026 Policy Address, the SFC on Wednesday unveiled a strategic action plan, outlining short-, medium- and long-term initiatives across areas. Priorities include strengthening Hong Kong’s renminbi, fixed income and currency market ecosystem, deepening market connectivity with both the Chinese mainland and overseas markets, and forging the efficiency, inclusiveness and quality of the city’s capital markets while enhancing market infrastructure.

According to the action plan, the SFC will review listing rules for the Stock Exchange of Hong Kong’s GEM board — the Growth Enterprise Market board. It also plans to launch public consultations on refinements to current requirements concerning notifiable transactions, connected transactions and spinoffs, as well as simplification of prospectus disclosure rules.

ALSO READ: Hong Kong regulator allows virtual assets in margin financing

Leung said the current prospectus framework contains significant overlaps between statutory disclosure requirements and the HKEX’s listing rules, resulting in prospectuses that are often “lengthy and complex”.

To reduce duplication and improve efficiency, the regulator is considering consolidating disclosure requirements for listed securities so that applicants would only need to comply with the HKEX’s listing rules, she said.

The SFC is also exploring allowing publicly available information to be incorporated by reference, alongside establishment of a central database to ensure such information remains accessible to the public.

“This would help streamline prospectuses and improve their readability and usefulness. It would also make it easier for issuers listing in Hong Kong and overseas to use the same set of disclosure materials to meet the regulatory requirements of different markets,” she said.

Hong Kong’s IPO market has rebounded sharply since 2025. In January, the SFC issued a circular to licensed sponsors, warning of a decline in the quality of draft listing documents and substandard conduct.

Leung said staffing levels at licensed corporations had improved, but the regulator continued to see “signs of potential manipulation by some listed companies to create false demand during public offerings”.

She warned that the SFC will deal seriously with companies and intermediaries involved in market misconduct, vowing to continue safeguarding market integrity and stability, and upholding robust regulatory standards.

READ MORE: SFC: Hong Kong capital markets see broad-based growth

The action plan also mentions that the SFC is aiming to include RMB counter trading in the southbound trading of the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programs by July 1 next year. It is also targeting the launch of a “REIT Connect” — a mutual market access channel for real estate investment trust trading — in the first half of next year.

Kelvin Wong Tin-yau, chairman of the SFC, said the plan is not only a response to the development priorities of the country and the HKSAR government, but also an important blueprint for the long-term development of Hong Kong’s capital markets.

“By consolidating our traditional strengths, fostering new growth drivers, and continuing to enhance market quality and integrity, we are confident that Hong Kong’s competitiveness and attractiveness as an international financial center will be further strengthened,” he added.

Hong Kong Exchanges and Clearing Ltd welcomes the action plan. Chairman Carlson Tong Ka-shing said the HKEX will continue to work closely with the SFC and other stakeholders to strengthen connectivity between the HKSAR, the Chinese mainland, and international markets, promoting market innovation and development, and enhancing the long-term competitiveness of Hong Kong.

Contact the writer at gabylin@chinadailyhk.com