HONG KONG - HONG Kong-listed companies and tycoons in the Chinese city on Monday criticised new measures aimed at making insider trading more difficult, saying the restrictions could force firms to relocate.

More than 250 companies and individuals signed a letter published in local newspapers that protests plans to extend the period banning directors from trading shares in their firms.

The new rule, due to come into effect on Jan 1, effectively extends the current one-month blackout period that begins four weeks before the company's earnings announcement to up to seven calendar months.

For firms reporting quarterly results, the blackout period would last for up to nine months under the change.

'Not only will this amendment damage the continued viability and health of the Hong Kong market, it will also undermine the legitimate rights and functions of directors as investors,' the letter said.

'As a result, companies already listed in Hong Kong might relocate to other markets and those contemplating a listing here might decide to list elsewhere,' it said.

The letter said the move would 'inflict damage on Hong Kong's status as an international financial centre' and jeopardise 'an important source of market liquidity and stable support for shareholder value.'

It drew the signatures of some of Hong Kong's biggest firms, including Shun Tak Holdings, headed by Macau gambling tycoon Stanley Ho, and Cheung Kong (Holdings), controlled by Li Ka-shing. -- AFP