Hong Kong ramped up the issuance of licences for bankers specialising in initial public offerings (IPOs) by 53% in March, signalling a gradual recovery in activity even as regulators maintain strict standards for industry entry.
Data from the Securities and Futures Commission (SFC) showed that 43 new corporate finance advisory licences were granted during the month, rebounding from a low in February. However, the figure remains below the historical average of more than 100 licences per month seen prior to tighter regulatory scrutiny.
Market observers said the increase suggests the regulator is attempting to ease capacity constraints while continuing to enforce higher quality standards. The number of licensed bankers is widely seen as a key indicator of the health of Hong Kong’s capital markets.
The SFC had intensified oversight late last year, criticising banks for inadequate staffing and substandard IPO submissions. The move came amid a surge in listing activity, with the market experiencing its strongest fundraising levels in four years.
The regulator has since introduced measures to improve deal quality, including limiting signing principals — the bankers ultimately responsible for IPO submissions — to a maximum of five active mandates at any given time. This restriction has created a bottleneck, with more than 400 companies currently in the pipeline for listings.
SFC executive director of intermediaries Eric Yip said the regulator has been encouraged by how firms are responding, particularly in strengthening their resource allocation and internal processes.
Industry participants noted that as equity capital market activity begins to pick up, firms are hiring more talent to meet both rising demand and stricter regulatory expectations.
However, sentiment remains cautious following recent enforcement actions, including investigations into alleged insider trading involving a hedge fund and several brokerages.
Overall, while the uptick in licensing points to improving momentum, the sector is still adjusting to a more disciplined regulatory environment.
