The Chamber of Hong Kong Listed Companies (CHKLC) is urging Hong Kong to further lower the bar for innovative companies to go public in the city, so as to encourage more technology firms to raise funds here, according to the chamber’s chairman.

The Hong Kong Exchanges and Clearing (HKEX) unveiled its biggest listing reforms since 2018 in March, expanding the scope of businesses eligible for listing under a weighted-voting rights regime and redefining its classification for innovative companies, in order to allow biotechnology firms and non-technology issuers with innovative business models to go public in Hong Kong.

According to an HKEX consultation paper, the exchange will only allow innovative companies with technologies that are “novel in themselves, or essential to the novelty of the applicant’s core business” to apply to list via the weighted voting rights.

Chan Ka-keung, chairman of the CHKLC, said the current proposal requiring the innovative company to pass through the “novelty test” was too high a bar for many.

“The chamber recommends removing the ‘novelty test’ as it means maybe only the first one to use certain technology or business model to qualify to adopt the weighted voting right model to list,” Chan said at a media briefing on Friday. “This will fail a lot of good, quality innovative companies which have new technologies or business models but may not be the first one to do so.”

“Hong Kong would need to compete with many other markets for the innovative companies to list, while the US market has no requirement for innovations to list with weighted voting rights,” he said.