查看中文
Following a market consultation process in late 2022, the Stock Exchange of Hong Kong Limited (HKEX) introduced a new regime to permit the listing of companies operating in specified specialist technology sectors.
The new rules became effective on 31 March 2023, and comprise:
- New Chapter 18C to The Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (Listing Rules).
- A new guidance letter, HKEX-GL115-23, setting out further commentary on the new rules and guidance for listing applicants.
This document summarizes the requirements under the new rules, addressing four key aspects of the new regime:
- Eligible Companies
- Specialist Technology Industries
- Independent Price-Setting Investor Definition
The information here is intended solely as a summary overview and is not intended to take the place of detailed legal advice based on the specific facts and circumstances in any particular case.
1. Eligible Companies
The new rules permit the listing of a Specialist Technology Company, which may be either a Commercial Company or a Pre-Commercial Company. These key terms are defined below.
Specialist Technology Company: A company primarily engaged in the research and development of, and the commercialization of, products or services within one of the sectors of Specialist Technology Industries specified by HKEX. The current list of acceptable industry sectors are set out below in the table.
A company that does not operate in one of the specified industry sectors may apply to HKEX for approval to list as a Specialist Technology Company on a case-by-case basis. HKEX will require the company to demonstrate that:
- It has high growth potential.
- Its success can be demonstrated to be attributable to the application to its core business of new technologies and/or the application of the relevant science and/or technology within that sector to a new business model, which differentiates it from traditional market participants serving similar consumers or end users.
- Research and development significantly contributes to its expected value and constitutes a major activity and expense.1
Commercial Company: A Specialist Technology Company with revenue of at least HK$250 million (US$31.8 million) for its most recent audited financial year. Only revenue arising from Specialist Technology business segments will be recognized for this purpose.2
Pre-Commercial Company: A Specialist Technology Company that does not have sufficient revenue to qualify as a Commercial Company.
Specialist Technology Industries
Full details are set out in the March 2023 HKEX Guidance Letter HKEX-GL115-23.
2. Eligibility Criteria for Listings
The following table summarizes the eligibility requirements for listing as either a Commercial or Pre-Commercial Specialist Technology Company:
Investor Definitions
Sophisticated Independent Investors
To qualify as a Sophisticated Independent Investor (SII), an investor must be sophisticated and independent. Full details of SIIs must be disclosed in the prospectus to substantiate that they qualify as SIIs.
Sophisticated
Assessed by HKEX on a case-by-case basis with reference to the investor’s investment experience, knowledge and expertise in the relevant field, as demonstrated by its assets under management (AUM), size of its investment portfolio or track record of investments.
The following are examples of investors HKEX would consider sophisticated:
- An asset management firm, fund or company with AUM/fund/portfolio size of at least HK$15 billion.
- An asset management firm, fund or company with AUM/fund/portfolio size of at least HK$5 billion where the investments are primarily in Specialist Technology investments.
- A key participant in the relevant upstream or downstream industry with a meaningful market share and size.
Independent
For the purposes of assessing whether an investor is an SII, the following are not considered independent:17
- Core connected persons of the applicant (other than substantial shareholders who are connected solely because of the size of their shareholdings).
- Controlling shareholders or members of a group of controlling shareholders.
- Founders and their close associates.
- Persons acting in concert with the controlling shareholders or founders, subject to HKEX discretion.
Pathfinder SIIs
Pathfinder SIIs are SIIs that have invested in the company and meet the relevant minimum shareholding thresholds set forth in the Eligibility Criteria for Listing table above for at least 12 months prior to the date of the listing application.
3. IPO Requirements
The following table summarizes the requirements applicable to a Specialist Technology Company IPO:
Independent Price-Setting Investor Definition
The following will qualify as Independent Price-Setting investors:26
- Institutional Professional Investors, as defined by paragraphs (a) to (i) of the definition of “professional investor” in section 1 of Part 1 of Schedule 1 to the Securities and Futures Ordinance (SFO), which includes banks, insurance companies, collective investment schemes, mandatory provident funds (MPFs), governments and persons providing investment services regulated outside Hong Kong.
- Other investors with AUM/fund size/portfolio size of at least HK$1 billion.
The following will not qualify as independent price-setting investors:27
- An existing shareholder of the applicant, or their close associates.
- A core connected person of the applicant.
4. Post-IPO Requirements
Note: When a Pre-Commercial Company can satisfy either (i) the HK$250m revenue requirement for its most recent audited financial year or (ii) one of the other financial tests for listing in LR 8.05, the company may apply to HKEX to cease being regarded as a Pre-Commercial Company, in which case the additional requirements above will cease to apply and the “P” stock marker will be removed.36
In such cases, the applicable lock-up periods will be those that would have applied if the issuer had listed as a Commercial Company, or 30 days after the removal of the Pre-Commercial designation, whichever is later.37
______________________________
1 HKEX-GL115-23 paragraph 10
2 LR 18C.03(4)
3 LR 18C.01
4 HKEX-GL115-23 paragraph 16
5 LR 18C.03(2)
6 LR 18C.03(2)
7 HKEX-GL115-23 paragraph 19(b)
8 LR 18C.03(3)
9 LR 18C.03(4)
10 HKEX-GL115-23 paragraph 19(c). HKEX will allow for temporary declines in revenue, e.g., due to economic, market or industry conditions.
11LR 18C.04(1)
12 LR 18C.04(2), (3)
13 LR 18C.05 and HKEX-GL115-23 paragraph 37(a). HKEX may accept fluctuations in shareholdings, e.g., due to temporary dilution. See: HKEX-GL115-23 paragraph 40.
14 LR 18C.06 and HKEX-GL115-23 paragraphs 46 to 53
15 LR 18C.07
16 HKEX-GL115-23 paragraph 19(a)
17 HKEX-GL115-23 paragraph 29
18 LR 18C.05 and HKEX-GL115-23 paragraph 37(b)
19 LR 18C.08
20 HKEX-GL115-23 paragraph 71
21 LR 18C.09(1)
22 LR 18C.09(2), (3)
23 LR 18C.10
24 LR 18C.11
25 Required pursuant to LR 18C.12
26 HKEX-GL115-23 paragraph 55
27 HKEX-GL115-23 paragraph 56
28 LR 18C.14(1)
29 See HKEX-GL115-23 paragraphs 75 to 79. Company to identify such personnel based on specific facts and circumstances, with regard to factors including their shareholding, remuneration and seniority. The lock-up continues to apply even if the person ceases to hold the relevant position, either because of a change of position or resignation or otherwise. Note 3 to LR 18C.14.
30 LR 18C.14(2) and HKEX-GL115-23 paragraph 81.
31 LR18C.17, 18C.18
32 HKEX-GL115-23 paragraph 84, 85
33 HKEX-GL115-23 paragraph 74
34 LR 18C.19
35 LR 18C.21
36 LR 18C.22, 18C.23
37 Note 2 to LR 18C.23
Download PDF
