Hong Kong Exchanges and Clearing (HKEX) has proposed major changes to its listing rules, lowering thresholds for innovative companies under the weighted voting rights regime and the revenue route. The reforms aim to open doors for smaller and more diverse firms to list in the city.
Hong Kong Exchanges and Clearing (HKEX) unveiled its biggest listing reforms since 2018 on Friday, broadening the special listing regime for innovative companies and opening the door for smaller and more diverse firms to list in the city.
HKEX proposed lowering the minimum threshold for companies to list under the weighted voting rights (WVR) 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 reduce the minimum market capitalisation for companies using the revenue route to HK$6 billion and revenues of HK$600 million in the latest financial year, compared with the current rules 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 reforms aim to enhance Hong Kong’s appeal as a fundraising hub, as brokers noted investors are shifting some US dollar assets to the region to diversify risk profiles. The 2018 reforms led to a wave of innovative listings, including companies like Xiaomi, JD.com, Meituan, and Baidu.
