Joint Statement by the HKSFC and the HKEX on Enhanced Timeframe for New Listing Application Process
The Hong Kong Securities and Futures Commission (SFC) and the Hong Kong Stock Exchange (Exchange) published the Joint Statement on Enhanced Timeframe for New Listing Application Process on 18 October 2024. It applies to all new Hong Kong listing applications filed after 18 October 2024. This joint statement is a positive development, as it enhances transparency and provides clear guidance regarding the timing needed by regulators to review listing applications. This will help improve the global competitiveness of Hong Kong's capital markets. Prospective issuers should work closely with the regulators and their advisors so that they are able to take full advantage of the enhanced listing timeframe.
(A) Listing applications that fully meet all applicable requirements
- If a listing application meets all applicable requirements, the SFC and the Exchange will indicate any material regulatory concerns after a maximum of two rounds of regulatory comments. The time taken by each regulator to confirm whether there are any material regulatory concerns will be no more than 40 business days (excluding response time from the applicant / sponsor).
- The applicant / sponsor are expected to take a total of around 60 business days to satisfactorily address regulators’ comments.
- Subject to obtaining approval from the Listing Committee (and other applicable parties), the application process should be completed within the six-month application validity window
- An illustration of the enhanced timetable (prepared by the Exchange) can be found in the diagram at bottom of this document.
(B) Accelerated timeframe for eligible A-share listed companies
- An accelerated timeframe may be available to an existing A-share listed company that fulfils the following requirements:
i. it is expected to have a minimum market capitalisation of HK$10 billion; and
ii. it has complied with all laws and regulations (in all material respects) in the two full financial years immediately before the listing application and up to the date of submitting the listing application.
- Under the accelerated timeframe, the 40 business day period mentioned in (A) above is reduced to 30 business days. Based on this timeframe, each regulator will only issue one round of regulatory comments.
(C) Applications requiring a longer process
- The timeframe mentioned in (A) and (B) do not apply if the regulators have any material concerns regarding the listing application, if there are new material developments, or if there are incomplete responses to regulators’ comments.
- In these cases, the progress of the application would depend on when the applicant and its sponsor are able to satisfactorily address the regulators' concerns.
An illustration of the Enhanced Application Timeframe
- 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 vis the Exchange to notify the applicant through its sponsor, which will be counted as one round of may 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 sponsor 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.
