Hong Kong's bourse agrees terms for dual-class share trading with mainland China

Hong Kong Exchanges and Clearing, operator of the Hong Kong stock exchange, said on Friday it has agreed with China's main bourses on the terms for making dual-class shares available to mainland investors using Stock Connect.
Stock Connect is a cross-border investment scheme that allows offshore investors to buy onshore Chinese shares, and mainland investors to tap the Hong Kong market.
Hong Kong Exchanges and Clearing got into a rare public dispute with China's two mainland exchanges a year ago when the latter blocked Chinese smartphone maker Xiaomi Corp - at the time the only company listed in Hong Kong with dual-class shares - from the trading link. The Shanghai stock exchange said that mainland investors didn't understand the structure well enough.
Dual-class shares - which offer one type of shares for the general public and another type for a company's top executives and founders - give the company's management more of a say, which advocates say protect against pressure for short-term returns, but critics argue they could be abused by company insiders.
Meituan Dianping, a Chinese online food delivery-to-ticketing services firm, is the only other company listed in Hong Kong with such a structure, under Hong Kong's new rules designed to attract tech companies.
The Shanghai and Shenzhen stock exchanges said in statements on Friday that they were running a consultation on the agreed criteria for dual-class share trading until Aug. 9.