Hong Kong: A Holistic Review To Reform The Listing Regime In Hong Kong

On 16 June 2017, Hong Kong Exchanges and Clearing Limited and its subsidiary The Stock Exchange of Hong Kong Limited (the "Exchange") launched a consultation on a package of proposals (the "Proposals") through two separate papers:

  • the New Board Concept Paper (the "Concept Paper"); and
  • the Consultation Paper on the Review of the Growth Enterprise Market (GEM) and Changes to the GEM and Main Board Listing Rules (the "Consultation Paper").

The Proposals are the result of a holistic review of the Hong Kong listing framework aimed at widening capital markets access by opening up to a more diverse range of issuers and improving the quality of the Exchange's markets. In the Concept Paper, the Exchange proposes the establishment of a New Board, which is separate from the Main Board and the GEM. The New Board will comprise two distinct segments, namely New Board PREMIUM and New Board PRO.

In the Consultation Paper, the Exchange proposes changes to the Main Board and GEM to ensure they reflect currently acceptable standards in the market and address the recent regulatory and market concerns on GEM applicants and listed issuers (largely by tightening up the requirements for GEM listings). The proposed changes to the Main Board eligibility requirements are to preserve the Main Board's position as a market for larger companies.

Synopsis of the Four Boards

Some of the key features of the Main Board, GEM, New Board PREMIUM and New Board PRO are summarized in the table below, should the Proposals be adopted:

Since New Board PRO would be open to professional investors only, it is proposed that a "lighter touch" approach will apply to initial listing requirements. Specifically, the existing sponsor regime will not apply to New Board PRO and a financial adviser is proposed to be appointed, who would be expected to exercise its own professional judgement as to what investigations are appropriate for the applicant and to ensure that the listing document provides accurate and sufficient information to enable professional investors to make an informed investment decision.

Under the Proposals, there would be no fast-track migration mechanism between the New Board and the Main Board or GEM, or from New Board PRO to New Board PREMIUM. The Exchange proposes removing the "stepping stone" concept (GEM as a stepping stone to the Main Board) and the streamlined process for transfers from GEM to the Main Board. This means that GEM transfer applicants will be required to appoint a sponsor and issue a "prospectus-standard" listing document. Further, the Exchange proposes all GEM transfer applicants to have published at least two full financial years of financial statements after their GEM listings before they can be considered for a transfer to the Main Board.

New Concepts from the Proposals

There are a few new concepts / terminologies introduced in the Proposals which Hong Kong capital markets practitioners and stakeholders should be familiarised with in order to understand the Proposals.

  • New Economy Companies – New economy companies may encompass a range of different sectors including biotechnology, health care technology, internet and direct marketing retail, internet software and services, IT services, software, technology hardware and storage and peripherals. In light of the evolving nature of technology, no fixed definition is actually proposed for this terminology and the Listing Committee will retain the ultimate discretion to determine the listing eligibility for the New Board on a principle-based approach.
  • Weighted Voting Rights ("WVR") – Picking up from where it left off after the roadblock to the "Concept Paper on Weighted Voting Rights" back in 2014, the Exchange is proposing to allow companies with WVR to list in Hong Kong through New Board PRO and New Board PREMIUM. The Exchange admitted that one major attraction of the US market for many companies is that WVR structures are permitted there, whereas the Hong Kong market does not allow them. Two approaches are proposed to regulate companies seeking a listing on the New Board with a WVR structure. One option would be to take a disclosure-based approach. This would require such companies to prominently disclose that they have a WVR structure and the risks associated with the structure. An alternative approach would be to impose mandatory safeguards in addition to disclosure requirements. Examples of such safeguards include restrictions on the types of persons that can hold WVR, the minimum equity that they must hold in the company on an ongoing basis and restrictions on the transfer of WVR to other persons, and requirement that the WVR structure fall away after a pre-determined period of time.
  • Private Market – The Exchange is also exploring the creation of a Private Market, a platform on which unlisted, or pre-listing companies with a market value below HK$150 million could be registered. Registration on the Private Market would enable private companies to manage their shareholder registers, investor communications and corporate actions, and would help prepare companies for an eventual transition to listed status.

Consultation Period The consultation period for the Proposals is two months and the deadline for responses is 18 August 2017. The Exchange emphasized that these interlinked Proposals should be viewed and considered holistically when deciding the way forward. That said, the Exchange expects the amendments to the GEM Listing Rules and the Main Board Listing Rules to take effect approximately six months after the date of the Consultation Paper, i.e., around December 2017.

The Concept Paper and the Consultation Paper are available at:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.