Listing in Hong Kong
09 May, 2016
The process by which a Hong Kong private company becomes a listed company may differ from other countries.
The significance of becoming a listed company is that as a listed company you can raise funds by offering securities to the public (private company cannot).
Listing process involves:
- The private company is required to appoint a sponsor which is usually a financial institution registered with the Securities and Future Commission. The sponsor advises the company and manage the initial public offer of shares.
- The company must submit an application proof which is a listing application and related materials.
- The company must appoint the sponsor at least two months before listing application is made.
- The company must also appoint other professionals such as accountants and solicitors.
- If necessary, the group of companies that will form the listed company can be restructured.
- Due Diligence - All information in the listing application must be examined and investigated to ensure correctness and completeness before issued to public (business transactions, assets etc.)
- The company submits the application to the Stock Exchange for the shares of the company to be listed on the Main Board of the Stock Exchange of Hong Kong (HKEx) or Growth Enterprise Market (GEM).
- The company makes an offer to public to subscribe for shares in the company.
- The shares of the company are listed on the Stock Exchange.
The Stock Exchange in Hong Kong (HKEx)
The Stock Exchange in Hong Kong was formed in 1980 by the unification of four exchanges and commenced the trading in April 1986. It has developed from largely domestic operations to a major international stock exchange.
The Stock Exchange in Hong Kong regulates the conduct of companies listed therein.
Listing on the HKEx
The HKEx considers the following factors:
- Size of the company
- Market position of the company and its relative stability
- Integrity of management and controlling shareholders
- Material conflicts and conflicts of interest
The listing process and requirements for listing are describer above.
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