n this picture taken on Nov 17, 2016, a man leaves the Hong Kong Exchanges and Clearing Limited (HKEx) premises outside the stock exchange in Hong Kong. (ANTHONY WALLACE / AFP)
HONG KONG – The Hong Kong government said the lifting of listing qualifications would not affect small and medium enterprises that are intending to raise funds through launching initial public offerings in the city.
In a written reply to queries from lawmaker Christopher Cheung Wah-fung, Secretary for Financial Services and the Treasury Christopher Hui Ching-yu said specific business and financial requirements for listing applicants of the securities exchanges in different regions and countries vary and therefore cannot be directly compared.
HKEX will continue to implement initiatives to promote further market development and uphold market quality in order to strengthen Hong Kong's position as an international financial center, said Secretary for Financial Services and the Treasury Christopher Hui
The Hong Kong Exchanges and Clearing Limited announced last month that companies seeking to list on its main board must have earned at least HK$80 million in combined profits in the three years before listing, a 60 percent increase from the current requirement. The new rules will take effect in January 2022.
The bourse has watered down its proposal to raise profit ceiling by 150-200 percent after taking into account responses received from a two-month public consultation.
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In the reply, Hui said the three-year minimum aggregate profit requirement for listing on the NASDAQ's Global Select Market or the New York Stock Exchange ranges from US$11 million to US$12 million (approximately HK$85 million to HK$93 million), which is higher than the new profit requirements to be imposed by the HKEX from Jan 1, 2022.
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“The NASDAQ's Global Select Market and the NYSE also require issuers to have minimum public float of US$40 million (approximately HK$310 million), which is significantly higher than the minimum public float of HK$125 million for the HKEX's Main Board listing applicants,” Hui added.
He said the HKEX will continue to implement initiatives to promote further market development and uphold market quality in order to strengthen Hong Kong's position as an international financial center.