LCQ3: Facilitating enterprises to list in Hong Kong
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Question:
To dovetail with the latest economic trends and corporate needs, the Securities and Futures Commission (SFC) and Hong Kong Exchanges and Clearing Limited (HKEX) are conducting a comprehensive review of the listing regime, including reviewing the listing requirements, improving the vetting process and optimising the thresholds for dual listings, so as to further facilitate the emerging sector and overseas enterprises to raise capital in Hong Kong. In this connection, will the Government inform this Council:
(1) whether it will drive the HKEX and the SFC to adjust the listing thresholds for companies with weighted voting right structures and enterprises from the innovative sector, so as to further attract new economy as well as innovation and technology companies to list in Hong Kong;
(2) whether it will consider driving the HKEX to enhance the public float and market capitalisation requirements for listed companies, so as to facilitate more large-scale and overseas enterprises to list in Hong Kong; and
(3) whether it knows the strategies put in place by the HKEX to enhance the efficiency and flexibility of the vetting process for listing, as well as to provide stronger support and clearer guidance for overseas quality enterprises, in response to the increasingly competitive environment of the international capital market?
Reply:
President,
As an international financial centre, Hong Kong has been taking forward high-quality development of its capital market through institutional innovation, thereby enhancing the role as a global fundraising hub. In recent years, the Government has driven the Securities and Futures Commission (SFC) and the Hong Kong Exchanges and Clearing Limited (HKEX) to introduce a series of reforms to the listing regime. These include tailored listing mechanisms for new economy enterprises with weighted voting rights (WVR) structures and technology companies, the establishment of a regulatory framework to facilitate dual primary or secondary listing of overseas listed issuers in Hong Kong, etc.
With the implementation of the series of listing reforms, the primary market has shown notable vibrancy this year. In the first half of the year, Hong Kong recorded 42 initial public offerings (IPOs), raising over HK$107 billion in total, approximately 22 per cent more than the full-year total for last year and ranking first globally in the year-to-date. The number of listing applications is also increasing rapidly. At the end of June, the HKEX was processing over 200 listing applications, the highest level since the same period in 2021. Riding on the positive momentum in 2025, the HKEX and the SFC are taking forward further enhancements to the listing regime so as to boost the vitality and competitiveness of Hong Kong's listing platform.
In consultation with the SFC and the HKEX, my response to the three parts of the question is as follows:
(1) and (2) To closely follow market developments, the SFC and the HKEX continuously review their listing regime and related requirements, with a view to attracting more high-quality enterprises including overseas and new economy companies to list in Hong Kong, while balancing relevant risks and investor protection. Notably, the HKEX relaxed the market capitalisation requirement for Greater China issuers seeking secondary listing in Hong Kong and removed the relevant condition of being an "innovative company". "Grandfathered Greater China issuers" and "non-Greater China issuers" with WVR or variable interest entity structures that meet the secondary listing requirements have also been provided with greater flexibility to obtain primary listing status in Hong Kong.
In September 2024, the HKEX and the SFC lowered the market capitalisation threshold at the time of listing for specialist technology companies to enhance the flexibility of the relevant listing framework. In addition, a dedicated "technology enterprises channel" (TECH) was launched in May this year to provide tailored guidance to specialist technology and biotechnology companies before they submit their listing applications, thereby providing support to issuers in their listing preparation process. The issuers may also submit listing applications confidentially, taking into account the unique characteristics of relevant enterprises. These measures are also applicable to overseas technology companies. The HKEX and the SFC will allocate resources flexibly based on application volumes to ensure efficient processing.
The HKEX and the SFC are committed to improving Hong Kong's listing regime to facilitate listing of more high-quality companies, thereby enhancing the overall competitiveness and vibrancy of Hong Kong as a listing venue. We are conducting a comprehensive review, with the scope of review to cover multiple aspects of the listing regime. In addition to supporting fundraising by enterprises, it also has to safeguard protection of investors' interests and the overall market quality so as to attract more investors to invest in Hong Kong, which requires in-depth engagement with different stakeholders. We are aware that Dr the Hon Starry Lee and two other Members published a report last week putting forward various recommendations to further enhance the Listing Rules to attract listing of high-quality overseas issuers in Hong Kong. The relevant areas such as reviewing the specific requirements for primary, secondary and dual primary listing, as well as post-listing continuing obligations, etc, are already covered in the scope of the ongoing review by the HKEX and the SFC. Specific proposals will be considered as part of the process. The HKEX will announce relevant enhancement measures with public consultation to be conducted as appropriate once they are ready.
In addition, the HKEX launched a consultation on proposals to enhance IPO price discovery and open market regulation in December 2024, which include a tiered approach to minimum public float requirements at the time of listing based on issuers' market capitalisation, and seeking views on whether issuers should be allowed greater flexibility to maintain a lower public float post-listing. The HKEX is currently consolidating and reviewing the feedback received, and will conduct further consultation on specific proposals regarding the ongoing public float requirements.
(3) We are committed to attracting companies of various sizes and with growth potential from around the world to list and raise funds in Hong Kong. To this end, the HKEX has streamlined the listing requirements for overseas issuers and introduced a set of core shareholder protection standards applicable to all issuers to facilitate compliance. The HKEX has also issued guidance for overseas issuers seeking to list in Hong Kong and published further jurisdiction-specific explanatory notes on a need basis. To facilitate fundraising by more high-quality companies in Hong Kong, the SFC and the HKEX implemented the enhanced timeframe for approval of new listing applications last year (Note), thereby improving the transparency and efficiency of the listing application process, and providing greater certainty on the vetting time. Enterprises with dual primary listing that meet the relevant eligibility criteria are currently also eligible for inclusion in Southbound trading of Stock Connect.
Building on the various enhancements to the listing regime for overseas issuers, HKEX continues to review the scope of recognised stock exchanges to enable companies listed on overseas main markets to seek secondary listing in Hong Kong. Following the inclusion of the Saudi Exchange, the Indonesia Stock Exchange, the Abu Dhabi Securities Exchange and the Dubai Financial Market onto the list of recognised stock exchanges in 2023 and 2024, the HKEX further added the Stock Exchange of Thailand in March this year, bringing the total number of recognised overseas exchanges on the list to 20.
Looking ahead, the Government, together with the SFC and the HKEX, will continue to step up external promotion efforts to showcase the latest developments and strengths of Hong Kong's financial services sector, including the listing platform. Meanwhile, the HKEX will explore further expansion of the scope of recognised stock exchanges and simplification of the listing process for overseas issuers, while more proactively providing guidance to facilitate their preparations for listing in Hong Kong.
Thank you, President.
Note: Including confirmation within 40 business days for general new listing applications, or within 30 business days for eligible A-share companies, on whether there are any major regulatory concerns.
Ends/Wednesday, July 16, 2025
Issued at HKT 14:50
Issued at HKT 14:50
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