It is possible already to invest electronically in IPOs, either by using services provided by some local brokerages, or through Central Clearing, but in both cases it is necessary to have existing accounts. There has been little use of these facilities so far, probably because of a perception that the market is dominated by institutions who can so easily control the pricing and availability of small volumes of electronic IPO participation. Time and again, retail investors have been left with the short end of the stick in popular IPOs, and there can seem to be even less transparency when dealing takes places through an unsophisticated electronic link.

Now, however, Hongkong Bank - an arm of HSBC Holdings - and Central Registration - a subsidiary of Hongkong Bank and Australian leading share registry Computershare - have jointly proposed the launch of their own e-IPO service. The service will combine the facilities of Hongkong Bank and its affiliate Hang Seng Bank, which have about three million bank accounts in total. The service would allow investors to use telephone banking, the Internet or even ATMs to subscribe to an IPO. Subscription data will be handled by Central Registration, which will be responsible for share allocation and other arrangements, as it would under the ordinary process. It is hoped that this will give retail investors something approaching parity with institutional investors in the IPO process.

The Government plans to use this method for the HK$30bn of shares in MTRC which it plans to sell in the next two years. The first tranche will be on offer in thr autumn, and investors will not have to go through the time-consuming process of opening share-delaing accounts, but will be able to tap directly into the subscription process. It won't be an entirely electronic IPO, though: the Government will offer more conventional subscription methods as well.

Even though the talk of an e-IPO for the MTRC is just speculation at the moment, it has wider implications for the future issue of IPOs.

Market observers said that the Government has been exploring various methods of IPO delivery since 1993, including the introduction of paperless methods, as a first step towards the development of the securities market.

Hardly any progress has been achieved during the past seven years.

The picture of tens of thousands people crowded into several Hongkong Bank branches just to submit the IPO subscription forms for Tom.com and Sunevision is still fresh and vivid in many people's memory.

Since then the issue has been raised several times, and despite the fact that a number of regional countries including Singapore and Australia, are using scriptless e-IPO methods or enact fully scriptless share transactions, Hong Kong has yet to introduce a system. Even Shenzhen, just north of the border, is known to have used an e-IPO method.

Frank Chan, assistant director of business development at the Central Registration, said the company proposed the new method jointly with Hongkong Bank in the hopes that it would help promote market development in the territory.

E-IPO is the first step along the scriptless development path. The using of electronic methods could hasten information dissemination and thus enhance market efficiency, which is good for overall market development, he said.

He added that when a scriptless method is fully developed, the system could be opened for overseas investors to subscribe to, or trade Hong Kong stocks, which would also promote the local stock market.