Hong Kong Capital Markets Update – Issue 3, March 2023

On 24 March 2023, the Stock Exchange of Hong Kong Limited (the “Exchange”) published the consultation conclusions on the proposals to create a listing regime for Specialist Technology Companies in Hong Kong.

To bridge the gap with other capital markets such as the United States and the Chinese Mainland in terms of listing of Specialist Technology Companies and further promote the market diversification, the Exchange published a consultation paper (“Consultation Paper”) on 19 October 2022 seeking market feedback on proposals to enable the listing of Specialist Technology Companies on the Exchange (please refer to our Capital Markets Update Issue 2022-02 for a summary). The consultation period ended on 18 December 2022.

The Exchange concluded that the proposals outlined in the Consultation Paper should be adopted with amendments made in response to comments from the market. The key amendments from the original proposals in the Consultation Paper are summarised below:

1. Lower the minimum market capitalisation at listing;
2. Relax the minimum R&D expenditure requirement; 
3. Relax the requirement for meaningful investment from Pathfinder SII; and
4. Define “Independent Price Setting Investors” for IPO price discovery process

The amendments to Listing Rules and the Guidance Letter in relation to the listing regime for Specialist Technology Companies will come into effect on 31 March 2023.