Response the Consultation Paper Listing Framework Competitiveness Review
Release Date: 2026-04-16
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Date: April 16, 2026
Attention : Hong Kong Exchanges and Clearing Limited
Response the Consultation Paper Listing Framework Competitiveness Review
This document constitutes the formal response to the Consultation Paper on “Review of Listing Regime Competitiveness” issued by Hong Kong Exchanges and Clearing Limited. We sets out its positions and justifications on key proposals, including lowering the financial eligibility threshold for Weighted Voting Rights (WVR) structures, relaxing the WVR ratio cap, introducing dual pathways for identifying innovative industry companies, facilitating secondary listings of overseas issuers, expanding the permitted use of US GAAP, and implementing confidential filing for listing applications. The overarching goal is to enhance the competitiveness of Hong Kong’s listing regime and attract more new economy and innovative companies to list in Hong Kong.
Question 1
Do you agree that the WVR Financial Eligibility Test thresholds should be lowered?
Response:
We Agree. Reducing the thresholds is expected to attract a greater number of high-quality, innovative, and new economy companies that currently do not meet the stringent market capitalisation requirements, enabling them to list in Hong Kong with a WVR structure. This initiative will bolster Hong Kong's role as a competitive hub for new economy financing, addressing the challenges posed by markets in Chinese Mainland (SSE/SZSE) and the United States. The existing HK$40 billion threshold is excessively high for many mid-sized technology firms in their growth stages, compelling them to consider Nasdaq instead. By lowering these thresholds, we can significantly increase the pool of potential listing candidates, draw more "unicorn" companies to Hong Kong, and sustain its status as a prominent international A+H share financing center.
Question 2
If your answer to Question 1 is “yes”, do you agree with the proposed WVR Financial Eligibility Test thresholds (as set out in paragraph 91 of the Consultation Paper)?
Response:
We agree. The "market capitalisation only test" with a threshold of HK$20 billion aligns well with the WVR requirements of the SSE and SZSE Main Boards. Additionally, the "HK$6 billion market capitalisation plus HK$600 million revenue" test maintains the essence of the existing "10% revenue-to-market cap ratio" while simply reducing the overall thresholds. This approach accommodates more growth-stage companies that have demonstrated clear monetisation capabilities, ensuring they possess a certain scale and business maturity. It effectively prevents overly early-stage and highly volatile projects from entering the market through a WVR structure.
Question 3
Do you agree with the proposal to accept a 20:1 WVR Ratio Cap if an applicant has a market capitalisation of at least HK$40 billion at the time of listing (see paragraph 103 of the Consultation Paper)?
Response:
We agree. Notably, the US market has no cap, and the UK has eliminated its 20:1 cap. For elite founders, maintaining control is crucial when choosing a listing venue. By relaxing the ratio but keeping a high HK$40 billion threshold, we achieve a practical balance between attracting top technology talent and safeguarding public shareholders’ interests.
We believe that with adequate disclosure in the prospectus and prominent presentation of relevant risk factors, investors can be well-informed about the voting structure and associated risks at purchase. This ensures a practical balance in protecting shareholders' interests. Under this threshold, WVR structures would remain accessible to a select group of high-quality, large-cap companies rather than becoming widespread. Coupled with requirements for innovative companies, external validation, corporate governance, and ongoing obligations, this approach offers an acceptable "conditional relaxation" from an investor protection standpoint.
Question 4
Do you agree with the proposal that the Exchange may be prepared to accept the listing of an applicant whose WVR beneficiaries collectively hold a lower minimum economic interest at listing only if such lower underlying economic interest, at the time of the applicant’s initial listing: (a) represents at least 5% of the applicant’s total issued share capital; and (b) has an amount of at least HK$4 billion (see paragraph 105 of the Consultation Paper)?
Response:
We agree. In modern technology companies, it's common for founders' shareholdings to be diluted below 10% after several financing rounds. As long as the absolute value of their shareholding (HK$4 billion) sufficiently aligns their interests with the company's long-term goals, reducing the percentage threshold more accurately reflects the realities of capital market dynamics.
Question 5
Do you agree with the proposal to provide a choice of Route A and Route B that applicants can use to meet the Innovative Company Requirements (as set out in paragraph 126 of the Consultation Paper)?
Response:
We support this change. The earlier definition of "innovativeness" was overly subjective and focused too much on hard technology. By introducing "business model innovation," the value of new enterprise types like platform economies and new retail is acknowledged. Clear quantitative indicators, such as compound annual growth rate, can greatly enhance regulatory predictability. Both pathways include innovation characteristics and external validation requirements, which refocus regulatory assessments on commercial outcomes and market position rather than abstract "innovation" labels. This increases the transparency and predictability of the vetting process, reducing delays from subjective judgments.
Question 6
If your answer to Question 5 is “yes”, in respect of Route A, do you agree with:
(a) the proposed retention of the current Specialist Company Presumptions (as set out in paragraph 127(a) of the Consultation Paper)?
(b) the proposed “innovative” presumption for Qualified Biotech Applicants and Qualified Specialist Technology Applicants (as set out in paragraphs 127(b), 132 and 133 of the Consultation Paper)?
(c) the proposed refinements to the Innovative Characteristics that are applicable to Route A (as set out in paragraphs 127(c), 129 and 130 of the Consultation Paper)?
Response:
Overall agree with (a), (b), (c).
Question 7
If your answer to Question 5 is “yes”, do you agree with:
(a) the proposed refinements to the Innovative Characteristics that are applicable to Route B (as set out in paragraphs 129 and 131 of the Consultation Paper)?
(b) the proposed guidance on the meaning of a “sophisticated investor” for the purpose of the “external validation” requirement (as set out in paragraph 134 of the Consultation Paper)?
(c) the proposed guidance on what constitutes “meaningful third-party investment” for Route B applicants for the purpose of the “external validation” requirement (as set out in paragraph 135 of the Consultation Paper)?
Response:
Overall, we agree with (a), (b), and (c). We believe these measures will help minimize case-by-case disputes, provide greater certainty for issuers and early-stage investors in designing pre-IPO structures, and ensure that investors offering external validation possess adequate judgment and risk-bearing capacity.
Question 8
If your answer to Question 2 is “yes”, do you agree with the proposal to lower the financial eligibility thresholds for a secondary listing of an overseas issuer with a WVR structure to align them with those proposed for WVR issuers with a primary listing (see paragraph 173 of the Consultation Paper)?
Response:
We support this alignment. By standardizing the primary listing thresholds, existing barriers for overseas WVR companies are removed, encouraging more US-listed Greater China companies to return or dual-list, thereby enhancing the depth and liquidity of the Hong Kong market.
Question 9
If your answer to Question 8 is “yes”, do you agree with the proposal to lower the market capitalisation threshold under Criteria B from HK$10 billion to HK$6 billion (see paragraph 177 of the Consultation Paper)?
Response:
We agree. Reducing the threshold to HK$6 billion more accurately reflects current market realities, attracting more mid-sized overseas issuers and enhancing Hong Kong's appeal as a secondary listing destination.
Question 10
Do you agree with the proposal to retain the market capitalisation threshold under Criteria A (see paragraph 178 of the Consultation Paper)?
Response:
We agree.
Question 11
What measures (if any) do you think the Exchange should implement to further facilitate the listings, in Hong Kong, of issuers listed overseas (see paragraphs 198 and 199 of the Consultation Paper)?
Response:
No additional suggestions.
Question 12
Do you agree with the proposal to codify the existing guidance into a Rule to state that an applicant will be considered to have satisfied the Ownership Continuity Requirement if it can demonstrate, to the Exchange’s satisfaction, that there was no material change in influence on management during the Relevant Period despite the change in controlling shareholder over that period to address any packaging concerns (see paragraphs 205 and 206 of the Consultation Paper)?
Response:
We agree. High-growth companies often experience changes in control, like shifts in founding shareholders or private equity exits, shortly before listing. Codifying existing guidance into the Listing Rules enhances operational certainty and alleviates concerns about "packaging." The current requirement is too rigid; by codifying the guidance and permitting exemptions for demonstrating "no material change in management influence," we can address "technical non-compliance" issues effectively. This reduces the risk of issuers delaying listings due to normal optimization of shareholding structures.
Question 13
If your answer to Question 12 is “yes”, do you agree with the proposed consequential updates to our guidance (as set out in paragraph 207 of the Consultation Paper)?
Response:
Agree. These updates will clarify and make the Listing Rules more practical, aiding sponsors and intermediaries in assisting applicants with their operations.
Question 14
Do you agree with the proposal to expand the permitted use of US GAAP (as set out in paragraph 213 of the Consultation Paper)?
Response:
Agree. Expanding the permitted use of US GAAP, especially for companies with US operations or US-listed parents, can significantly reduce conversion costs and audit complexity, attracting more multinational enterprises.
Question 15
Do you agree with the proposal to remove the requirement that a US-listed issuer using US GAAP must revert to preparing financial statements using HKFRS or IFRS if it subsequently delists from the US (see paragraph 214 of the Consultation Paper)?
Response:
Agree. This amendment is highly attractive for "China concept stock returnees." The current requirement to switch accounting standards after delisting or privatization from the US disrupts accounting continuity and affects historical data comparability. Removing this requirement offers greater policy stability and reduces the compliance burden for returning China concept stocks.
Question 16
Do you agree with the proposal to remove the requirement for a Reconciliation Statement produced for the purpose of unaudited financial results to be reviewed by auditors (see paragraph 215 of the Consultation Paper)?
Response:
Agree. Removing the review requirement can speed up the listing process and reduce administrative burdens, without impacting overall disclosure quality.
Question 17
Do you agree with the proposal to allow Eligible Specialist Companies to seek a listing under the applicable Specialist Chapters (see paragraph 232 of the Consultation Paper)?
Response:
Agree. Allowing companies to list under the Specialist Chapters, even if they meet general financial tests, can attract more innovative biotech and technology companies, further strengthening Hong Kong’s new economy sector.
Question 18
If your answer to Question 17 is “yes”, do you agree with the proposed modifications to the additional requirements under the Specialist Chapters to be imposed on Eligible Specialist Companies (as set out in paragraph 233 of the Consultation Paper)?
Response:
Agree. Moderately adjusting additional requirements can reduce redundancy, expedite the listing of commercialized companies, and maintain protection for Specialist Companies.
Question 19
Do you agree with the proposal to remove the Publication Requirements for all listing applicants, such that a listing applicant (including a listing applicant associated with an Issuer-related Listing Application) may choose not to publish its AP at the time it submits its listing application, in which case it would only be required to publish an OC Announcement on the same date as it publishes its PHIP (as set out in paragraph 260 of the Consultation Paper)?
Response:
Agree. Aligning with international markets like the US is crucial. While current publication requirements raise market awareness early, confidential filing can protect trade secrets, prevent competitors from accessing sensitive data, and minimize reputational risks if applications are delayed due to market volatility.
Currently, only "Eligible Applicants" can file confidentially, deterring many tech, biotech, and innovative companies from listing in Hong Kong. They fear early disclosure might lead to imitation, attacks, or market hype. Extending confidential filing to all new applicants will allow companies to file confidentially, only requiring an Overall Coordinator Announcement alongside the Post Hearing Information Pack (PHIP) publication. This aligns with US SEC practices and boosts Hong Kong's appeal.
However, strict compliance with confidentiality obligations is essential. If leaks occur, the Exchange should consider suspending applications or delaying hearings. In case of significant leaks, the Exchange should require public disclosure of application materials to ensure market fairness.
Question 20
If your answer to Question 19 is “yes”, do you agree with:
(a) the proposal that, in addition to the existing Return Application Details, the identities of other professional parties responsible for the Application Materials also be displayed on the designated webpage of the Exchange (as set out in paragraphs 264 to 265 of the Consultation Paper)?
(b) the list of professional parties proposed to be considered as responsible for the Application Materials for the above purpose (as setout in Box 1 under paragraph 265 of the Consultation Paper)?
Response:
Agree. Increasing transparency by revealing the identities of professional parties can boost market confidence while maintaining confidentiality.
Question 21
Do you agree with the proposal to amend the starting point of the 8-week moratorium to either: (a) the date on which all applicable review procedures in respect of the Listing Division’s decision to return the listing application have been completed; or (b) the date on which the time period for invoking any such review procedures has lapsed (as set out in paragraph 266 of the Consultation Paper)?
Response:
Agree. Changing the starting point to the completion of review procedures or expiry of the relevant time limit is fairer, avoids unnecessarily extending the cooling-off period, and encourages companies to reapply sooner.
Question 22
If your answer to Question 19 is “yes”, do you agree with the consequential changes to issuers’ disclosure obligations in relation to Issuer-related Listing Applications (as set out in paragraph 267 of the Consultation Paper)?
Response:
Agree. Correspondingly adjusting the disclosure obligations can align with the new confidential filing arrangements, reduce unnecessary burdens while ensuring that important information is disclosed in a timely manner.
We broadly supports most of the proposals in the Consultation Paper. We believes that lowering the WVR threshold, adopting a business model innovation pathway, aligning the financial eligibility for secondary listings of overseas issuers, expanding the scope of US GAAP acceptance, and introducing a full confidential filing system will effectively address competition from the US and the Chinese Mainland markets, reduce unnecessary hurdles in the listing process, and strike a practical balance between investor protection and attracting quality issuers. We also recommends that the Exchange strictly monitor information leakage risks under the confidential filing regime to uphold market fairness.
Should you have any inquiries regarding this letter, please feel free to contact Mr. HOW Sze Ming Kenny, Councilor (Phone: / Email: ) or me (Phone: / Email: ).
Your sincerely,
[Signature] and [Chop]
Mofiz Chan
Chairman
Hong Kong Securities & Futures Professionals Association