On Friday, the South China Morning Post newspaper quoted Hong Kong Stock Exchange Chairman Ronald Arculli as saying the plan will be launched by the end of the month.

The new Hong Kong Depository Receipts, or HDRs, will work in a similar way to American Depository Receipts (ADRs), the Post reported.

ADRs represent shares of foreign companies traded on US markets that allow American investors to get exposure to foreign stocks without actually investing in overseas markets. ADRs are issued by US banks that hold a receipt of the foreign company's shares in their vaults.

Hong Kong currently allows companies from some, but not all, foreign countries to sell shares on its exchange.

The move comes as many Chinese companies, a major source of business for the Hong Kong market, raise funds through mainland markets instead, the Post said.

'The depository receipt scheme will diversify the source of listed companies in Hong Kong and strengthen our position as an international financial center', the Post quoted Mr Arculli as saying.

Mr Arculli said the plan will likely draw companies from Russia, Vietnam, India, Kazakhstan and the Middle East, according to the report.

HKEx, the company that runs the Hong Kong market, didn't immediately return a reporter's call seeking confirmation of Mr Arculli's comments. -- AP