Background
The Securities and Futures Commission (the “SFC”) and The Stock Exchange of Hong Kong Limited (the “Exchange”) have jointly unveiled a new Enhanced Application Timeframe for the listing process in Hong Kong. The initiative aims to offer greater clarity, efficiency, and transparency during listing application processes, and bolster Hong Kong’s competitive edge as a leading international listing venue.
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Enhanced Application Timeframe
The Enhanced Application Timeframe is designed to give applicants more certainty regarding the timeline for reviews. For applications that fully meet all applicable requirements, both the SFC and the Exchange will provide their regulatory assessments within 40 business days, after a maximum of two rounds of comments. Applicants are expected to take around 60 business days to address all comments and complete the application process within the six-month validity window.
An illustration of the Enhanced Application Timeframe is extracted from the joint statement and set out as follows:
- The business days taken for each round of comments may be subject to slight adjustments, but overall it is expected that the time taken by each regulator will be no more than 40 business days.
- It refers to the acknowledgement of listing application.
- If the SFC shares the same regulatory concerns as those included in the Exchange’s comment letters, it will issue a letter via the Exchange to notify the applicant through its sponsor, which will be counted as one round of comments from the SFC.
- Upon confirmation of no material regulatory concerns, the Exchange will issue a Hearing Bundle Letter (HBL) setting out the matters to be dealt with or addressed by the applicants and their sponsors to finalise the disclosure in the listing document. When the applicants and their sponsors have a listing document that is ready for Listing Committee Hearing, and having obtained all requisite approvals from other authorities or regulators, where applicable, the application will proceed to the Listing Committee Hearing.
Accelerated Timeframe for A-share Listed Companies
A company may qualify for an accelerated process if it has already been listed in Mainland China (A-share listed) with a market capitalisation of at least HK$10 billion, and complied, in all material respects, with the laws and regulations applicable to it’s A-share listing for the past two full financial years. In this case, the review process will be completed in just one round of comments, with the regulators completing their assessments within 30 business days.
Applications Requiring Longer Review
For applications where material regulatory concerns arise, or where responses are incomplete, the review process may take longer. In such circumstances, the regulators will engage closely with the applicant and their advisers, offering further guidance to address concerns. If problems persist after two rounds of comments, a formal requisition letter may be issued, lengthening the process.
Strengthening Hong Kong’s Capital Markets
Both the SFC and the Exchange are confident that the Enhanced Application Timeframe will improve the listing experience by offering greater predictability for applicants. The new process will help Hong Kong maintain its competitive edge as a top destination for companies seeking to go public. Regulatory leaders emphasise their commitment to working with applicants and their advisers to ensure efficient, high-standard listings.
Please contact our Partner Mr. Rodney Teoh for any enquiries or further information.
This news update is for information purposes only. Its content does not constitute legal advice and should not be treated as such. Stevenson, Wong & Co. will not be liable to you in respect of any special, indirect or consequential loss or damage arising from or in connection with any decision made, action or inaction taken in reliance on the information set out herein.