Hong Kong - Adding two chapters to the Listing Rules rather than a New Board

The Hong Kong Stock Exchange has taken a strong step forward towards liberalising its listing platform, deciding to:

  •  allow listing of biotech companies that are pre-revenue and pre-profit;
  • allow weighted voting structures for “new economy”, “innovative” companies, subject to additional disclosures and safeguards; and
  • broaden the secondary listing channel to attract “innovative” companies which are already listed on “qualified exchanges”, including those who were previously denied this avenue due to having WVRs or a “centre of gravity” in Greater China.

There are plenty of questions that remain around the finer points of these proposals, which detailed rules are being drafted with the aim of commencing formal consultation on the detailed rules before the end of Q1 2018. Nevertheless, the proposals do represent a fresh and measured approach to further develop and liberalise the Hong Kong market, one which will stimulate conversations with potential HK listing applicants who have been sitting on the sidelines waiting to see how the wind would blow on these issues.

Read our summary of the key points of the proposals.