Charles Li Xiaojia, former CEO of Hong Kong Exchanges and Clearing (HKEX), who spearheaded multiple listing reforms during his 11-year tenure, is seeking to revolutionise capital markets again – this time by helping small companies raise funds.
Li filed on June 20 to list his newly launched Micro Connect International Finance (MCIF) under HKEX’s Chapter 21 regime – a framework designed for investment companies seeking capital from institutional investors.
“When I was at the exchange, we did not like the structure of the Chapter 21 listing rule, as it allowed investment companies to raise funds to invest in a basket of stocks, bonds and other products without a clear theme and standard,” Li said on Thursday.
However, MCIF had a clear theme and structure, as it allowed international investors to invest in cash-flow-based assets of small companies and start-ups in mainland China and elsewhere, he added.
Unlike conventional listed companies that must meet profit, revenue and asset thresholds, Chapter 21 enables newly established investment firms to raise at least HK$150 million (US$19.23 million) from a minimum of 300 qualified investors, each committing HK$500,000 or more.
The rules have been in place since 1989, but so far only 21 firms have taken this route. China New Economy Fund was the last to do so in January 2011, a year after Li took over the HKEX’s reins.
