On 15 December 2017, The Stock Exchange of Hong Kong Limited (the “Exchange”) published its consultation conclusions on the consultation paper on the review of the Growth Enterprise Market (“GEM”) and changes to the GEM and Main Board Listing Rules published on 16 June 2017.
The Exchange decided to implement substantially all of the proposals in the consultation paper, including, among other things:
- removing the streamlined process for GEM transfers to the Main Board;
- raising the minimum cash flow requirement for GEM applicants from HK$20 million to HK$30 million;
- raising the minimum expected market capitalisation of GEM applicants at the time of listing from HK$100 million to HK$150 million;
- introducing a mandatory public offering requirement of at least 10% of the total offer size for all GEM IPOs;
- extending the post-IPO lock-up requirement on controlling shareholders from one year to two years for GEM; and
- raising the minimum expected market capitalisation of Main Board applicants at the time of listing from HK$200 million to HK$500 million.
This client alert summarises the changes to the GEM and Main Board listing requirements that will take effect on 15 February 2018.
Changes to the GEM listing requirements
Changes to the Main Board listing requirements
How will the changes affect new listing applicants?
All new listing applications received by the Exchange prior to 15 February 2018 will be processed in accordance with the GEM or Main Board Listing Rules in force immediately before 15 February 2018, as the case may be, with only one renewal of such application permitted thereafter (which must be made within three calendar months from the date on which the application has lapsed).
Applications received on or after 15 February 2018 will be processed in accordance with the amended GEM or Main Board Listing Rules, as the case may be.
Changes to the GEM transfer mechanism
Transitional arrangements in relation to GEM Transfer Applications