The Stock Exchange of Hong Kong Limited (the Exchange), a wholly owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Monday) published its Listing Committee Report for 2020, which includes a review of the committee’s work during the year and an overview of its policy agenda for 2021 and beyond.
The year was a busy year in terms of the number of listings, with 151 applications for listing considered by the Committee. Of note during the year, the number of new listings of companies from emerging and innovative sectors continued to increase, including nine US-listed Greater China “homecoming” issuers that secondary listed in Hong Kong, compared with one in 2019.
In 2020, HKEX published a concept paper to seek market feedback on its proposal to comprehensively modernise and digitalise Hong Kong’s IPO settlement process. Under the proposal, HKEX will introduce a new web-based service called FINI (Fast Interface for New Issuance) that enables IPO market participants, advisers and regulators to interact digitally and seamlessly, shortening the IPO settlement process by up to 80 per cent.
Since 2018, the Exchange has been exploring the use of artificial intelligence to review annual reports, and in 2020 it became a permanent feature of its regulatory toolkit. In October, the Exchange introduced listing e-Forms for issuers’ and IPO applicants’ submission of routine information to the Exchange and, in December concluded on a consultation to implement completely paperless IPOs1.
“In 2020, our primary focus was on continuing to uphold the quality and reputation of the Exchange’s markets through consultation proposals to increase the Main Board profit requirement, a review of the Exchange’s disciplinary powers and sanctions and the implementation of the new delisting regime,” said Peter Brien, Chairman of the Listing Committee.
“This year, we will conclude on these consultation proposals and also engage the market on a variety of new areas, including on the listing regime for overseas issuers and on share schemes,” he said.
The global pandemic posed challenges for listed issuers on a number of fronts and throughout the period the Exchange looked to act swiftly to support the market, including using three joint statements with the Securities and Futures Commission, and a set of frequently asked questions (FAQs) that addressed issuers’ queries regarding the extended timetable for the publication of financial reports and annual reports and the holding of general meetings.
The Exchange also reviewed issuers’ corporate governance practice disclosures and reported its findings and recommendations. It published new and updated guidance materials to help IPO applicants and their directors to build, and integrate, corporate governance and environmental, social and governance considerations into their business strategy.
The Listing Committee, which consists of 27 independent members and the HKEX Chief Executive as an ex-officio member, acts both as an independent administrative decision maker and an advisory body for the Exchange. It oversees the Listing Division, provides policy advice to the Exchange on listing matters, takes decisions of material significance for listing applicants, listed issuers and the individuals concerned, and acts as a review body.
The Listing Committee Report 2020 can be found on the HKEX website. The website also has information on the role and mode of operation of the Listing Committee.
Note:
- This is with the exception of applicants adopting Mixed Media Offers for their IPOs.
Ends