While the market expects more mainland SMEs to come, there are concerns whether or not H-shares will be able to maintain their high standing.

"IPO approval is very strict in Hong Kong," said Edward Au, co-leader of national public offering group at Deloitte. "We have the HKEx Listing Division, the HKEx Listing Committee and the Securities & Futures Commission (SFC) to examine listing applications. They are not rubber stamps. Hong Kong is one of the toughest places in the world to get listed. A lot of cases are turned down."

Last December, SFC renewed listing rules, making it clear that sponsors of IPOs face the same civil and criminal liabilities as company directors, if a listing prospectus is found to have misled investors. "These reforms will underpin market confidence during all market cycles," SFC Chief Executive Ashley Alder said.

Echoing that, the local stock exchange published rule changes regarding listing applications this July. "The Exchange has streamlined the vetting process for listings, refined the number of required documents and issued guidance on certain interpretations and procedures, all with a view to make the process more efficient, while maintaining the standards of companies to be listed on the Exchange," said a release on the exchange's website. The new rules took effect on Oct 1.

"That means sponsors now have to make sure all the checks are done properly, that the numbers are accurate and the prospectus substantially complete before filing the application," said Edmond Chan, PwC capital market services group partner. "The new rules secure sponsors enough time to prepare listing documents and emphasize the importance of due diligence before application. All sponsors should serve as filters. That's key to ensuring the international standards have been maintained. In the long term, it will benefit Hong Kong."

(HK Edition 10/18/2013 page4)