Abstract

Due to the gap of legislative and supervisory systems, some problems have occurred in the Mainland corporations listed in Hong Kong, which result in the underperformance of the stocks and inadequate confidence of investors on them.The purpose of this paper is seeking some ways to develop further cooperation between the securities supervision of the two regions, by analyzing and solving the existing problems.In this paper, we discuss the advantages of the Hong Kong financial markets and the particular relationship between the Mainland and Hong Kong markets.We provide an introduction of company types, methods of Initial Public Offering（IPO），and the stock performance，analyze the problems in those corporations and in the securities supervision cooperation between the two regions.We demonstrate the reforms of Hong Kong securities supervision and the revision of the related laws after the Asian Financial Crisis, and explore the impacts and new problems in cooperation of the regions which are generated from the revision of securities regulations.We conducted comparative study on the securities supervision systems of the two regions, and analyzed the unique supervisory practices, routine methods and supervisory culture in the Mainland's securities supervision and their impacts on the cooperation of securities supervision.Furthermore, we provide some suggestions and strategies to intensify the cooperation of two regions'securities supervision.We conclude that the Mainland and Hong Kong securities markets should establish a deeper cooperative relationship.We should focus on solving the conflicts in regional laws.We should eliminate the disturbance from different legislative systems and set up ajudicial assistance relationship to protect the investors.We also suggest draw on the experiences of international practices in securities supervision and improve the Mainland's legal system with regard to supervisory cooperation through“unilateral legislation”.The most urgent task is to identify and allocate relevant responsibilities and to intensify the supervision on the Mainland private enterprises listed in Hong Kong.We also recommend the acceleration of securities market exchange and cooperation after China's accession to the WTO and the enforcement of CEPA, so as to speed up the alignment of the securities markets of the two regions.

Keywords: Hong Kong Securities Supervision Cooperation Strategy