The Hong Kong Stock Exchange has revised its listing rules to allow mainland firms to use Chinese accounting standards and auditors, the Wall Street Journal reported. The move, which comes into effect on Wednesday, should make it cheaper and easier for mainland companies to access Hong Kong’s equity market – at present companies must prepare one set of financial statements according to local standards and another according to Hong Kong standards. However, the Securities and Futures Commission’s (SFC) powers in terms of tackling fraud will be reduced. According to people familiar with the matter, the rule change was delayed from January because the SFC wasn’t happy with the documentation of cooperation arrangements with the mainland authorities. It is unclear whether these concerns have now been fully addressed. As it stands, China’s Ministry of Finance has released a list of 12 accounting firms accredited to audit mainland-incorporated companies listed in Hong Kong.
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