On 31 March 2021, the Stock Exchange of Hong Kong Limited (the “Exchange”) published a consultation paper (“Consultation”) to seek market feedback on proposed amendments to the Listing Rules on streamlining the listing regime for overseas issuers (including those with a centre of gravity in Greater China, together “Overseas Issuers”).
Developing Hong Kong into a listing and capital raising hub for major global and regional companies, either on a primary or secondary basis, has always been one of the strategic objectives of the Exchange.
In this context, the Exchange has recently carried out a holistic review of the current Hong Kong listing regime for Overseas Issuers. Following this holistic review, several issues were identified:
(a) Complexity of requirements for Overseas Issuers;
(b) Inconsistent shareholder protection standards for Recognised Jurisdictions and Acceptable Jurisdictions;
(c) Co-existence of two secondary listing regimes;
(d) Secondary listing requirements for Greater China Issuers are more restrictive;
(e) Need for guidance on trading migration requirement and de-listings from overseas exchanges for secondary listed issuers;
(f) Grandfathered Greater China Issuers and Non-Greater China Issuers cannot apply for a direct dual primary listing and retain their non-compliant WVR and/or VIE structures; and
(g) Common waivers and automatic waivers for issuers (other than those automatic waivers for Qualifying Issuers under Chapter 19C of the Listing Rules) are not codified in the Listing Rules.
In light of the above issues, the Exchange sets out proposals in this Consultation to amend the existing listing regime for Overseas Issuers, aiming to strike a balance between market development and investor protection for the benefit of the market as a whole. The proposals cover requirements in the following four areas:
(1) Core shareholder protection standards
(2) Dual primary listings
(3) Secondary listings
(4) Codification of other JPS requirements.
The deadline for submissions is 31 May 2021.