HKEX opens door for small innovative firms to list with biggest reforms since 2018

Bourse operator lowers bar for companies with weighted voting rights as well as for firms seeking to list under the minimum market cap route

Hong Kong Exchanges and Clearing (HKEX) has unveiled its biggest listing reforms since 2018, broadening its special listing regime for innovative companies and opening the door for smaller and more diverse firms to list in the city, the bourse operator said on Friday.

HKEX proposed lowering the minimum threshold for companies to list under the weighted voting rights regime to a minimum valuation of HK$20 billion (US$2.6 billion), half the current requirement of at least HK$40 billion.

It will also lower the minimum market capitalisation for companies that use the revenue route to apply for listing to HK$6 billion and revenues of HK$600 million in the latest financial year, compared with the current rule of HK$10 billion and HK$1 billion, respectively.

“These proposals build on the success of our 2018 listing reforms, which fundamentally reshaped the composition of Hong Kong’s stock market, fuelling a surge of innovative company listings,” said Katherine Ng, head of listings at HKEX, as she announced the consultation paper, which will collect views until May 8.

“We welcome feedback on the proposals and look forward to continued engagement with stakeholders. Together, we can further strengthen Hong Kong’s position as the leading fundraising destination for growth companies and a premier market for global capital seeking opportunities in Asia.”

The new reforms were aimed at further strengthening Hong Kong’s attractiveness as a fundraising centre, as investors shift part of their US dollar assets to the region to diversify their risk profiles, brokers said.