Regulating disclosure in cross border listing between Mainland China and Hong Kong

Abstract

The last few years have seen a substantial increase in the number of A&H dual listings in Hong Kong and mainland China. These cross-border dual listings bring challenges to issuers and regulators in both Hong Kong and mainland China. One of the biggest concerns that issuers face is to ensure simultaneous and consistent compliance with the continuing disclosure regimes in the two jurisdictions. These two disclosure regimes differ in several significant aspects, such as their structures, enforcement patterns and regulatory intensity. The most pressing challenges for the regulators seem to have come from two directions: (a) investor concerns about possible unequal treatment of shareholders, and (b) issuers’ regulatory arbitrage induced by rule gaps between Hong Kong and the mainland. Both of these challenges are commonly associated with compliance inconsistencies and ...