Regulators warn 13 investment banks as principal bankers oversee up to 19 simultaneous listings
Record IPO Activity Strains Banking Resources
Hong Kong’s investment banking sector confronts an acute shortage of qualified professionals as the city experiences an unprecedented surge in initial public offering activity. The Securities and Futures Commission and Hong Kong Stock Exchange recently warned 13 investment banks that collectively handle more than 70 percent of over 430 active listing applications, highlighting insufficient capacity among principal bankers to supervise deals adequately. The regulatory intervention comes as some signing principals simultaneously helm as many as 19 separate IPO transactions, far exceeding prudent supervision capacity. First-time share sales reached a four-year high in 2025 and have begun 2026 at the busiest pace on record, with listing proceeds projected to reach a six-year high of $45 billion. Major potential listings this year include Chinese agricultural technology firm Syngenta Group, CK Hutchison Holdings’ beauty retailer A.S. Watson Group, and Baidu’s artificial-intelligence chip unit Kunlunxin.
Multi-Year Downturn Depleted Experienced Talent
The recruitment crisis stems directly from the years-long dry spell in dealmaking that followed Beijing’s regulatory crackdown on Chinese technology companies. During the slow period, banks reduced their operations and experienced professionals sought opportunities elsewhere, creating a severe talent deficit just as market conditions improved. John Mullally, managing director for Hong Kong at recruitment firm Robert Walters, characterized the situation bluntly: “The imbalance is a bit more severe than it has been in quite a while.” Every Hong Kong IPO requires a “signing principal” who must demonstrate years of experience, substantial involvement in advising deals, and passage of several rigorous examinations. To qualify, a banker needs to have served as a “responsible officer” supervising what the SFC defines as regulated activities. Hong Kong currently has 445 principals registered with the commission, though historical comparison data remains unavailable. The number of responsible officers for advising on corporate finance has fallen by 90 since 2020 to 1,185 at the end of last year, according to SFC data. Poaching has become rampant, especially in recent months. Sid Sibal, managing director at financial-services headhunter Aster Recruiting, reported principals jumping to other banks with above-the-norm pay rises as high as 45 percent. “If someone is not a signing principal right now, they’re not interviewing them,” Sibal noted, demonstrating banks’ desperate need to get on deals immediately rather than waiting for candidates to attain credentials.
Regulatory Quality Concerns Escalate
The SFC’s concerns extend beyond sheer numbers to the experience levels of broader IPO teams. More than 40 percent of deal team members at two banks had less than one year of experience in Hong Kong IPOs during the 2024-2025 period, according to the regulator. This inexperience, combined with principal banker overload, raises serious questions about due diligence quality and investor protection. Demand for IPO sponsor examinations surged significantly in recent weeks, with banks seeking to qualify as many workers as possible. Kevin Liem, who heads the Hong Kong Securities and Investment Institute organizing the exams, reported that physical exam sites in Hong Kong, overseas locations, and even online platforms will remain open through the Lunar New Year holiday to accommodate demand. Chinese investment banks, leveraging local market credentials, have expanded market share in competition with Goldman Sachs, Morgan Stanley, and UBS. However, this expansion has stretched resources dangerously thin.
Implications for Market Integrity and Democratic Accountability
The talent shortage crisis highlights broader concerns about Hong Kong’s financial sector under increasing mainland influence. Chinese banks’ growing dominance, combined with regulatory warnings about quality deficiencies, raises questions about whether the rush to process mainland Chinese company listings compromises the rigorous standards that historically made Hong Kong a trusted international financial center. For investors and advocates of transparent markets, the situation presents significant risks. Inadequately supervised IPOs may result in poor disclosure, inflated valuations, or overlooked red flags that ultimately harm shareholders. The SFC’s intervention demonstrates regulatory vigilance, but enforcement capacity remains limited when confronting systemic resource constraints across major banks. The underlying dynamic reflects Hong Kong’s subordination to mainland economic priorities, where facilitating Chinese company access to capital takes precedence over maintaining the highest professional standards. As Beijing tightens control over Hong Kong’s institutions, the question becomes whether regulators will maintain the independence and authority to enforce quality standards, or whether political pressure to process mainland listings will erode the due diligence that protects investors.
Senior Journalist & Editor, Apple Daily UK
Contact: athena.lai@appledaily.uk
Athena Lai is a senior journalist and editor with extensive experience in Chinese-language investigative reporting and editorial leadership. Educated at a leading journalism school in the United Kingdom, Athena received formal training in fact-checking methodology, editorial governance, and international media standards, grounding her work in globally recognized best practices.
She has held senior editorial roles at Apple Daily and other liberal Chinese publications, where she oversaw coverage of Hong Kong civil liberties, diaspora politics, rule of law, and press freedom. Athena’s reporting is distinguished by disciplined sourcing, cross-verification, and a clear separation between factual reporting and opinion, reinforcing reader trust.
Beyond reporting, Athena has served as an editor responsible for mentoring journalists, enforcing ethical guidelines, and managing sensitive investigations. Her newsroom leadership reflects real-world experience navigating legal risk, source protection, and editorial independence under pressure.
Athena’s authority comes from both her byline history and her editorial stewardship. She has reviewed and approved hundreds of articles, ensuring compliance with defamation standards, accuracy benchmarks, and responsible language use. Her work demonstrates lived experience within high-stakes news environments rather than theoretical expertise.
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