On 10 April 2017, Stevenson, Wong & Co. held a seminar at The Society of Chinese Accountants and Auditors in relation to the latest listing and placing requirements of Growth Enterprise Market (“GEM”) IPOs. Mr. Hank Lo, partner and head of corporate finance, and Mr. Terence Lau, associate, explained the key issues relating to the joint statement issued by the Securities and Futures Commission (“SFC”) and The Stock Exchange of Hong Kong Limited on 20 January 2017 and the “Guideline to sponsors, underwriters and placing agents involved in the listing and placing of GEM stocks” issued by the SFC. The seminar attracted around 80 attendees, including practising accountants.
The joint statement was made in response to the volatile price movements of GEM stocks in recent years. Mr. Lo and Mr. Lau briefly introduced the joint statement and the Guideline, which emphasises the importance for GEM listing applicants to abide by the GEM Listing Rules. In particular, GEM Rule 11.23 requires an open market in the securities for which listing is sought. While the rule aims to ensure there is sufficient liquidity of the shares in the market and to minimise the situations giving rise to manipulation of share price, Mr. Lo emphasized that having met the minimum number of 100 public shareholders as required under GEM Rule 11.23(2)(b) does not necessarily mean GEM Rule 11.23 has been satisfied. “There were cases where more than 90 percent of the offered shares were taken up by the top 25 places and the remaining taken up by a larger number of shareholders to meet the minimum public shareholders requirement yet it was suspected that the conditions for an open market may not exist,” Mr. Lo stated.
Mr. Lau also gave an overview of the Guideline, which covers the general obligations of sponsors and placing agents in relation to new listing and placing, such as conducting adequate “know-your-client” procedures and adopting a robust marketing and placing strategy.
In the Q&A session, the attendees asked questions relating to the impact for those involved in GEM listings. Mr. Lo and Mr. Lau answered the questions in details with in-depth viewpoints. The seminar received positive feedback from the attendees.
Should you have any enquiries to our services or this event, please contact Mr. Hank Lo or Mr. Terence Lau for further information.
Over 80 attendees, including practising accountants joined the seminar.
Our partner Mr. Hank Lo (2nd from right) and Associate Mr. Terence Lau (1st from right) held the seminar at The Society of Chinese Accountants and Auditors