5 Feb 2016
Listing in Hong Kong
As the second largest financial centre in Asia, Hong Kong not only has a sound legal system and regulatory framework but also adopts accounting standards which meet international requirements. The global network of Hong Kong’s banking system allows extensive free flows of capital and information. This, supported by advanced and sound trading, clearing and settlement facilities, has made Hong Kong an ideal fundraising and investment platform for international investors. Many of them view Hong Kong as an integral part of and the preferred gateway to the China market. Meanwhile, more and more mainland enterprises have chosen to list and raise funds in Hong Kong as a means to expand business and enter international markets.
The Stock Exchange of Hong Kong Ltd (SEHK) is the regulatory body responsible for listing matters in Hong Kong. There are two trading platforms in the securities market under SEHK, namely the Main Board and the Growth Enterprise Market (GEM). The Main Board caters specifically for companies which have shown a profit in their business records, while the GEM offers fundraising opportunities to start-ups of any scale from different sectors. To list on these two fundraising platforms, enterprises must apply to the SEHK, meet certain requirements and follow prescribed procedures.
Stock Trading Platforms
The Main Board offers a fundraising platform specifically to companies which are larger in scale, have a stronger base, and meet profit-making or other financial requirements. It also provides investment opportunities for various types of investors. Types of listed stock include: equity securities, debts, third-party derivatives, unit trusts, and investment vehicles.
Growth Enterprise Market (GEM)
GEM offers a fundraising platform to companies with growth potential. It also provides investment opportunities for professional investors and investors who have thorough knowledge about the market. Companies listed on GEM cover all kinds of trades and industries. Their sizes vary, they only focus on one kind of core business, and they may not have a business track record. GEM only accepts equity securities and debt securities (including options, warrants and convertible securities) as listed stocks.
Generally speaking, starting from the time a listing intermediary is appointed, the process for listing in Hong Kong takes an average of about seven to 15 months, depending on the progress of each step. Enterprises applying for listing in Hong Kong must go through the following steps or procedures:
Preparatory stage (generally takes one to three months)