Hong Kong’s IPO fraud clampdown sends shock waves across financial sector

Hong Kong regulators’ tough action to crack down on fraudulent activity in the initial public offering market is sending ripples across the city’s financial industry, with insiders predicting short-term turbulence as some listings are scaled back or even cancelled.

Financial intermediaries and IPO sponsors in particular find themselves in a “difficult position”, as they are now expected to conduct deeper due diligence to ensure deals are free from distortions, sources told the South China...