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Exchange Updates Guidance Materials for Biotech Companies

Regulatory
29 Apr 2020

The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Wednesday) published new guidance materials for pre-revenue Biotech Companies, providing prospective issuers and the market with more clarity on the requirements for listing and required disclosures.

“Two years ago we introduced pioneering new listing rules in Hong Kong to welcome new economy companies, including issuers with weighted voting rights and pre-revenue biotech companies, to our markets. And we have been extremely encouraged by the appetite for and success of these new franchises in what has been a relatively short period of time. In particular, we have created a new biotech marketplace and a new financing ecosystem for companies dedicated to advancing and improving the health of humanity,” said HKEX’s Head of Listing Bonnie Y Chan.

HKEX has to date welcomed 16 pre-revenue Biotech Companies under Chapter 18A of the Main Board Rules (Chapter 18A), one of the three new listing chapters introduced under the new listing regime in April 2018, raising a total of $39.68 billion. The new listing regime has also welcomed listings of innovative companies with weighted voting rights.

“Over the last two years, the Exchange has seen heightened interest from global institutions and retail market on Chapter 18A. We look forward to further developing this chapter in the future,” said Ms Chan.

The Exchange has published the new and updated guidance materials after reviewing the operation of Chapter 18A, as well as from comments it received from the Listing Committee, the Securities and Futures Commission, market practitioners and HKEX’s Biotech Advisory Panel.

Separately, the Exchange has today also updated one guidance letter on simplified listing documents relating to equity securities for new applications.

Below are some highlights of the new and updated guidance materials:

  • One new Guidance Letter – HKEX-GL107-20 (Guidance on disclosure in listing documents for Biotech Companies)

  • Three updated Guidance Letters – HKEX-GL92-18 (Guidance on suitability for listing of Biotech Companies); HKEX-GL85-16 (Guidance on placing to connected clients, and existing shareholders or their close associates, under the Rules); and HKEX-GL86-16 (Guidance on producing simplified listing documents relating to equity securities for new applications)

  • One set of updated Frequently Asked Questions on the Listing Regime for Companies from Emerging and Innovative Sectors

Details of the changes can be found via this link. These changes do not affect policy direction, which remains the same.

The latest updated Guidance Letters and FAQ series can be found on the HKEX website.

 

Ends

Updated 22 May 2020