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You are Here:Home - Technical - The Listing Rules

Basic Listing Requirements for Equities

The following shows some of the basic requirements for listing equity securities on the Exchange.  For details of the listing requirements, please refer to our Listing Rules.
Note: On 9 May 2008, the Exchange announced the framework for issuers to list on the Main Board in depositary receipt (HDR) form.  The listing requirements for HDR issuers are generally the same as for issuers of shares.  Any company which can meet the requirements of the Main Board Listing Rules and is in compliance with its local regulatory regime can apply to list in HDR form.  For more information on listing your company by way of HDR, please visit our “Depositary Receipt Framework" section.


(I)    Financial Requirements:

Main Board

GEM

A Main Board new applicant must have a trading record of not less than three financial years and meet one of the following three financial criteria:

A GEM new applicant must have a trading record of at least two financial years comprising:

 

1.

Profit Test

2.

Market Cap/ Revenue Test

 

3.

Market Cap/ Revenue/ Cashflow Test

Profit Attributable to Shareholders

At least HK$50 million in the last 3 financial years (with profits of at least HK$20 million recorded in the most recent year, and aggregate profits of at least HK$30 million recorded in the 2 years before that)

 

 

 

 

i.

A positive cashflow generated from operating activities in the ordinary and usual course of business of at least HK$20 million in aggregate for the two financial years immediately preceding the issue of the listing document

 

Market Cap

At least HK$200 million at the time of listing

At least HK$4 billion at the time of listing

At least HK$2 billion at the time of listing

 

Revenue

 

 

At least HK$500 million for the most recent audited financial year

At least HK$500 million for the most recent audited financial year

 

Market cap of at least HK$100 million at the time of listing

 

 

Cashflow

 

 

 

 

Positive cashflow from operating activities of at least HK$100 million in aggregate for the three preceding financial years

Note:

Note:

The Exchange may accept a shorter trading record period and/or may vary or waive the above profit or other financial standards requirement. For further details, please see Special Listing Requirements for Equities.

 

(II)    Acceptable Jurisdictions:


Chapter 19 of the Main Board Listing Rules and Chapter 24 of the GEM Listing Rules provide the general framework applicable to all overseas companies seeking a listing on the Exchange.  Main Board Rule 19.05(1)(b) and GEM Rule 24.05(1)(b) and the explanatory notes thereto set out the shareholder protection standards that are expected of an overseas company when seeking a primary listing on the Exchange.
Applicants incorporated outside Hong Kong and other recognised jurisdictions seeking a primary listing on Main Board and GEM are assessed on a case-by-case basis and have to demonstrate they are subject to appropriate standards of shareholder protection, which are at least equivalent to those required under Hong Kong law.  A roadmap that compromises a schedule of shareholder protection matters is set out in the attachment to the Joint Policy Statement dated 7 March 2007 to distil the key requirements for ensuring appropriate standards of shareholder protection from Exchange's current approach.


(III)    Accounting Standards:

•    A new applicant's accounts must be prepared in accordance with either Hong Kong Financial Reporting Standards or International Financial Reporting Standards.
•    Banking companies must also comply with the Financial Disclosure by Locally Incorporated Authorised Institutions issued by the Hong Kong Monetary Authority.


Main Board

GEM

For Main Board new applicants, accounts of an oversea-incorporated issuer prepared in accordance with generally accepted accounting principles in the United States of America (US GAAP) or other accounting standards may be acceptable by the Exchange under certain circumstances.

For GEM new applicants , accounts prepared in accordance with US GAAP are acceptable if the company is listed, or will be simultaneously listed, on either the New York Stock Exchange or the NASDAQ National Market.

(IV)    Suitability for Listing:

Both the issuer and its business must, in the opinion of the Exchange, be suitable for listing.
An issuer or its group (other than an investment company) whose assets consist wholly or substantially of cash or short-dated securities will not normally be regarded as suitable for listing, except where the issuer or group is solely or mainly engaged in the securities brokerage business.

(V) Operating History and Management:

Main Board

GEM

A Main Board new applicant must have a trading record period of at least 3 financial years with:

 

A GEM new applicant must have a trading record of at least 2 full financial years with

management continuity for at least the 3 preceding financial years; and

 

substantially the same management throughout the 2 full financial years; and

a continuity of ownership and control throughout the full financial year immediately preceding the issue of the listing document.

ownership continuity and control for at least the most recent audited financial year.

Exception:

Exception:

Under the Market Cap/Revenue test, the Exchange may accept a shorter trading record period under substantially the same management if the new applicant can demonstrate that:

The Exchange may accept a shorter trading record period and waive or vary the ownership and management requirements for:

 

its directors and management have sufficient and satisfactory experience of at least three years in the line of business and industry of the new applicant; and

newly-formed "project" companies;

management continuity for the most recent audited financial year.

natural resources exploitation companies,

 

(VI) Minimum Market Capitalisation:


The expected market capitalisation of a new applicant at the time of listing must be at least,

Main Board

GEM

HK$200 million

HK$100 million

(VII) Market Capitalisation of Public Float:


The expected market capitalisation at the time of listing of the securities of a new applicant which are held by the public must be at least,

Main Board

GEM

HK$50 million

HK$30 million

(VIII) Public Float:

At least 25% of the issuer's total issued share capital must at all times be held by the public.Where the issuer has one class of securities or more, the total securities of the issuer held by the public at the time of listing must be at least 25% of the issuer's total issued share capital. However, the class of securities for which listing is sought must not be less that 15% of the issuer's total issued share capital, having an expected market capitalisation at the time of listing of not less than,

Main Board

GEM

HK$50 million

HK$30 million



The Exchange may, at its discretion, accept a lower percentage of between 15% and 25% in the case of issuers with an expected market capitalisation at the time of listing of over HK$10 billion.

(IX) Spread of Shareholders:

Main Board

GEM

The equity securities in the hands of the public should be held among at least 300 holders.

The equity securities in the hands of the public should be held among at least 100 persons



Note: Not more than 50% of the securities in public hands at the time of listing can be beneficially owned by the three largest public shareholders.

(X) Offering Mechanism:

Main Board

GEM

A new applicant may not list by way of placing only if there is likely to be significant public demand for its securities

A new applicant is free to decide on its offering mechanism and may list on our Exchange by way of placing only.

The Main Board Listing Rules set out certain procedures to be adopted in the allocation of shares in initial public offerings. For further details, please see Practice Note 18 of the Main Board Listing Rules on Initial Public Offer of Securities.

(XI) New Issue Price:


Both the Main Board and the GEM Listing Rules do not impose conditions on the new issue price. However, new shares cannot be issued at a price below their nominal value.

List of Acceptable Overseas Jurisdictions

This table lists out all the overseas jurisdictions that the Listing Committee has formally ruled to be acceptable as an issuer’s place of incorporation.

People’s Republic of China
Bermuda
Cayman Islands
Australia
Brazil
British Virgin Islands
Canada – Alberta
Canada - British Columbia
Canada – Ontario
Cyprus
France
Germany
Guernsey
Isle of Man
Italy
Japan
Jersey
Korea, Republic of
Luxembourg
Singapore
United Kingdom
United States of America - California, State of
United States of America – Delaware, State of









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