Hong Kong Securities and Futures Commission's Huang Tianyou: Reviewing the minimum trading unit regulations in cooperation with the Hong Kong Stock Exchange to enhance market liquidity and efficiency.

Chairman of the Hong Kong Securities and Futures Commission, Huang Tianyou, stated at a forum that one of the key focuses of the Commission this year is to improve capital efficiency and reduce trading costs. He further stated that the Commission is working together with the Stock Exchange to enhance market liquidity and efficiency. Measures such as the implementation of share buybacks and gradually lowering the minimum tick size for shares, as well as reviewing the rules for board lot sizes and examining existing trading and settlement infrastructure are being carried out by the Commission. Huang Tianyou emphasized that good corporate governance is key to the sustainable development of markets. In the increasingly competitive financial market environment, investors will only pursue companies with good corporate governance. The Commission believes that by improving the quality of listed companies and capital markets in Hong Kong, promoting good governance, and managing market values well, shareholder value can be enhanced, bringing them more happiness. Huang Tianyou credited the recent highs in the stock market to the effectiveness of Japan's corporate governance reforms in 2023. He gave the example of the Japanese stock market, stating that the improvement in corporate governance has enhanced market performance. The strong performance of the Japanese stock market in recent years is mainly attributed to the positive impact of the corporate governance reforms introduced in 2023, leading to a good trend in company profits. He mentioned that the Japanese government launched a corporate governance action plan in 2023, and the Tokyo Stock Exchange also took measures to increase shareholder value and improve gender diversity. According to the Asian Corporate Governance Association (ACGA) corporate governance rankings, Japan rose from 5th place in 2020 to 2nd place, indicating that investors are more willing to communicate with companies and make shareholder proposals. Many companies are also enhancing shareholder returns through buybacks and dividend distributions. Huang Tianyou stated that good corporate governance can promote company growth as it ensures timely and accurate disclosure of operational and financial information, reducing information asymmetry and earning trust from investors. He cited reports from ACGA and Citi Research, showing that companies in the top 20% of corporate governance rankings have improved performance, with an annualized stock price growth rate close to 10% over 5 years, 6 percentage points higher than the lowest 20% ranked companies. On the contrary, the latest report from the Hong Kong Securities and Futures Commission shows that the Stock Exchange referred approximately 170 cases of improper corporate governance for investigation by the Commission from 2020 to June 2024. These cases involved unauthorized loans or transfers to third parties, misappropriation of company assets, and many of them resulted in impairment losses for shareholders.