At issue is who should regulate the market professionals who sponsor listings, and who should supervise the listings process. HKEx has come in for heavy criticism over the last year after assorted scandals and foul-ups.

It now seems likely that supervision of the sponsors at any rate will fall to the sole control of the SFC, which already issues their licenses; unofficial reports this week say that HKEx has accepted the inevitable in this respect, but is still fighting to maintain its control of the listing process itself.

HKEx had previously proposed to improve regulation of sponsors by adopting a 'name-and-shame' regime; but market professionals have been complaining that they did not want what amounts to double regulation. It is supposed that the SFC also wants to gain control of the listing process; btu the jury is still out on that one as government consultation continues.

The four possibilities government is offering are:

• letting HKEx set up a subsidiary to handle new listings;
• expanding the current dual filing system;
• shifting the listing function from Hong Kong Exchanges and Clearing (HKEx) to the Securities and Futures Commission; or
• setting up a new regulator to handle the job.

The Hong Kong Stockbrokers' Association has said it is against the third and fourth proposals but could accept either of the first two.

Other moves being considered by HKeX include a significant enhancement of the existing voluntary Code of Best Practice, which would include a requirement for companies to disclose directors' salaries by name, increase a listing applicant's minimum shareholders to 300 from 100, and appoint at least three independent non-executive directors instead of two. HKEx chief executive Paul Chow has also said said the exchange is studying the possibility of mandatory training for first-time directors in listed companies.