January 19, 2018 / 6:10 AM / a year ago

HK to introduce bill to boost auditing oversight for listed firms

HONG KONG, Jan 19 (Reuters) - Hong Kong will introduce a bill that seeks to enhance regulatory oversight over auditors of listed companies to the legislative council on Wednesday, an official statement said on Friday.

The move is among the measures being taken by Hong Kong to attract more foreign investors and bring the Asian financial hub up to speed with regulations in more developed markets.

Analysts have said Hong Kong’s ever-closer relationship with mainland China, whose companies dominate the Hong Kong market but remain beyond its legal reach, was a concern for the corporate governance practices in the former British colony.

The bill, if approved, seeks to make the Financial Reporting Council (FRC) the independent oversight body for auditors of listed companies in Hong Kong, widening its existing mandate to investigate complaints against them.

The FRC will get direct powers to inspect, investigate and discipline auditors of listed entities after the bill becomes law. It would also make it easier for the council to work with other overseas regulators.

“The bill will enhance the existing regulatory regime for auditors of listed entities ... thereby providing better protection to investors,” James Lau, secretary for financial services and the treasury, said in the statement.

“This is crucial to strengthening Hong Kong’s status as an international financial centre and capital market.” (Reporting by Sumeet Chatterjee; Editing by Himani Sarkar)

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