1. Richard Williams Head of Listing 31 May 2007 Strengthening Hong Kong as China’s International Capital Formation Centre Introductory Remarks to Panel Discussion

2. 2 1. Complete GEM review and related market development – The review of GEM will be taken forward and the proposals subjected to market consultation and subsequently implemented, as appropriate. 2. Open the equity listing regime to issuers from overseas jurisdictions – HKEx will facilitate the listing of issuers from a broader range of jurisdictions than at present, and promote this in overseas markets. 3. Improve the Exchange’s service standards in the listing process – HKEx seeks to streamline the listing process to facilitate listing on our markets. HKEx Strategic Plan 2007-09: Key Listing Initiatives

3. 3  AIM model not considered suitable for Hong Kong today: Structural differences exist Too early to adopt this model  Key Features of Proposals for further development of GEM as Second Board: New quantitative admission criteria: –Aggregate Operating Cash flow of HK$20million over last two years –Minimum Market Capitalisation of HK$100million Alignment of continuing obligations between GEM & Main Board The power to approve GEM admissions be delegated to the Listing Division Streamline the transfer process of qualified GEM applicants to the Main Board GEM Review

4. 4 Opening the Equity Listing Regime Overview of companies listed on the Exchange by place of incorporation (as at 30 April 2007) % of Market capitalisation* % of Country Number total (HK$) total Australia 10% 7,024,639,7020% Bermuda 45839% 1,562,371,887,17911% Canada 10% - Cayman Islands 38633% 1,490,303,776,16610% England 20% 2,007,644,637,68614% Hong Kong 19516% 5,788,050,059,03441% PRC 14312% 3,391,543,399,65124% Total 1,186100% 14,246,938,399,418 100% *Foreign companies and stock suspended over 1 year are excluded

5. 5  Clarify the Listing Rules governing the listing of overseas companies.  Provide a roadmap to overseas companies incorporated outside the Recognised Jurisdictions (i.e. Bermuda, Cayman Islands and the People’s Republic of China as prescribed in the Listing Rules).  State factors affecting eligibility for listing. Joint Policy Statement – 7 March 2007

6. 6 1H 2006 2H 2006 Average waiting period before Listing Committee Hearing for 2H 2006 decreased by 6 weeks from 18 weeks in 1H 2006 to 12 weeks in 2H 2006. The reduction in average waiting period in 2H 2006 is primarily due to (i)the shortening of the waiting period to Internal Clearance Meeting; (ii)a decrease in lag time between Internal Clearance Meeting and Listing Committee Hearing from 4 weeks in 1H 2006 to 1 week in 2H 2006; (iii)the resolution of all the three outlier cases brought forward from 2005 to 1H 2006; (iv)the introduction of the “internal 70-day protocol” in September 2006. Time to Listing Committee Hearing Improving the Exchange’s service standards in the listing process

7. 7 Time spent with HKEx was generally longer than time spent with issuers across all three categories of market capitalisation in 2006. This can be explained by the fact that there was always a minimum period (approx. 3 weeks) for the Listing Division to prepare to the first comment letter. 2006 1H 2006 2H 2006 Time spent (HKEx/Issuers) ratio 1.60 0.69 1.16 Time spent (HKEx/Issuers) ratio 1.84 1.00 1.26 Time spent (HKEx/Issuers) ratio 2.08 1.88 1.50 The Split of Processing Time Prior to Listing Committee Hearing Improving the Exchange’s service standards in the listing process