Will Rusal's prospectus be delivered in a brown paper bag? The Russian aluminium company has been cleared to list shares in Hong Kong, but with an unprecedented stipulation: adults only. Restrictions in both the primary and secondary markets are designed to protect vulnerable minors. The minimum subscription will be HK$1m and the stock will trade in lots of 200,000 shares.

This is bizarre. The stock exchange has deemed Rusal fit to list. But by trying to control who buys it, the Securities and Futures Commission is signalling that it isn't. Professional investors attending next month's roadshows, and thumbing the 1,000-page prospectus (almost three times the size of PetroChina's), will make up their own minds. Meanwhile, the casualty is Hong Kong's reputation as a serious international financial centre.

The SFC, regulating by a nudge and a wink, is hoping that arbitrary filters dissuade investors who cannot afford to lose a bundle. But in the same way that slapping an “R” rating on a film increases its allure to those excluded, setting a big minimum board lot may encourage investors to lever up to buy one. The judgment of the listing authority, which sits within the exchange, is equally questionable. Conditions imposed by the SFC usually cause issuers to restructure the deal or withdraw. Here, the exchange is pressing ahead with a much-needed diversification of its issuer base (more than 97 per cent of new issuers this decade were Chinese). But that is in spite of concluding this year that offerings that shut out retail investors were a bad idea.