Hong Kong Exchanges and Clearing (0388) published the conclusions to its consultation paper to enhance the competitiveness of Hong Kong's listing framework on Friday, saying that all proposals will be adopted with modifications and clarifications following strong market support.
These proposals include lowering thresholds for firms with dual-class share structures and broadening access to confidential initial public offering filings.
HKEX said that it received 73 responses and drew strong support from investors, issuers and market participants.
Among the key changes, the exchange halved the minimum market capitalization threshold for companies, including overseas-listed firms, with weighted voting rights (WVR), or dual-class share structures, to HK$20 billion from HK$40 billion.
It also reduced the threshold for non-WVR overseas-listed companies to HK$6 billion from HK$10 billion.
Companies with a market value of at least HK$6 billion can also qualify if they generate at least HK$600 million in annual revenue, down from previous thresholds of HK$10 billion and HK$1 billion, respectively.
A dual-class share structure gives founders extra voting power, allowing them to maintain high levels of control despite smaller stakes.
HKEX will also extend the option of confidential filing for IPO applications to all new applicants, rather than limiting it mainly to secondary listings, biotech firms and specialist technology companies.
Regarding the return mechanism, it said that in addition to the sponsor's identity, it will display the identities and roles of the professional parties involved in preparing the application materials upon a return of the listing application, and the reasons for return.
Commenting on these enhancements, John Lee Chen-kwok, vice chairman and co-head of Asia Country Coverage, Global Banking, Asia at UBS, said that these moves will further strengthen Hong Kong's attractiveness as an international fundraising hub and reinforce its leading position among global financial centres.
He added that the changes should encourage more international issuers to consider Hong Kong as a primary listing destination, supporting the continued growth and diversification of the market.
In the first half of the year, Hong Kong recorded 87 new listings and HK$210.2 billion in IPO fundraising, representing a 92 percent year-on-year increase in funds raised and positioning the city among the world's leading IPO destinations.
Staff reporter and Reuters
