On 18 October 2024, the Hong Kong Securities and Futures Commission (HK SFC) and The Stock Exchange of Hong Kong Limited (HKEX), a subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), announced the introduction of an Enhanced Timeframe for the New Listing application process aimed to strengthen and improve the clarity, transparency, and efficiency of the application process for prospective issuers.
Over recent years, the HK SFC and the Exchange have made progress in enhancing the New Listing application process by offering greater transparency. Since 2023, additional vetting statistics have been published, and all relevant guidance has been consolidated into a Guide for New Listing Applicants to streamline the application process and ensure quality listings on the Hong Kong Exchange, while upholding public interest.
The Enhanced Application Timeframe now provides a more defined schedule for regulatory review of New Listing applications submitted by applicants and their sponsors. The HK SFC, in its role as the statutory regulator, oversees the process under the Hong Kong’s Securities and Futures Ordinance (SFO) and the Hong Kong’s Securities and Futures (Stock Market Listing) Rules (SMLR). It works in close coordination with the Exchange, which is responsible for decisions regarding the suitability for listing and compliance with the Hong Kong’s Listing Rules.
Under this enhanced process, New Listing applications that meet all regulatory requirements will be processed in a maximum of two rounds of regulatory comments by both the HK SFC and the Exchange. The time taken by each regulator to review the application and raise any material concerns will not exceed 40 business days. Following the resolution of any concerns, the application will proceed to the Listing Committee Hearing. Applicants and their sponsors are expected to address all comments and finalise the listing documents within 60 business days, with the entire process being completed within the six-month application validity period.
For eligible A-share listed companies that meet specific criteria, such as a minimum market capitalisation of HK$10 billion and compliance with A-share listing regulations for at least two years, an Accelerated Timeframe is available. This process limits the review to one round of regulatory comments and reduces the assessment period to 30 business days. However, if material regulatory concerns are raised, the application will revert to the standard procedures.
In cases where Applications Require a Longer Process, such as when there are material regulatory concerns or incomplete responses to regulatory feedback, the HK SFC and the Exchange will engage directly with applicants and sponsors. If deficiencies persist after two rounds of comments (or one round for A-share listed companies), the regulators may issue formal requisition letters, further extending the application process until all issues are resolved.
The Enhanced Application Timeframe is expected to improve the efficiency of the listing process and provide greater certainty for issuers and their advisers. Michael Duignan, the SFC’s Executive Director of Corporate Finance, expressed strong support for the initiative. Similarly, Katherine Ng, HKEX’s Head of Listing, stated that the streamlined application process would provide much-needed clarity and efficiency for potential applicants. The HK SFC and the Exchange have also committed to continuing to seek market feedback to further enhance the listing process. The Enhanced Application Timeframe applies to all New Listing applications submitted after the date of this joint statement.
(Source: https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=24PR172)
