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 2021, which includes a review of the committee’s work during the year and an overview of its policy agenda for 2022 and beyond.
In 2021, the Listing Committee considered 119 listing applications in addition to hearing 18 review and 29 disciplinary cases. The Exchange concluded its consultation on proposals to create a Hong Kong listing framework for Special Purpose Acquisition Companies (SPACs), providing greater choice for issuers and investors whilst ensuring continued appropriate safeguards. Working closely with the Securities and Futures Commission, the Exchange successfully implemented the regime on 1 January 2022. It has since received several applications and the Exchange expects the first Hong Kong SPAC to be listed before the end of the first quarter 2022.
On climate initiatives, the Exchange published a Guidance on Climate Disclosure in November 2021, following the incorporation of certain key recommendations from the Task Force on Climate-Related Financial Disclosures (TCFD) in our ESG reporting requirements. Green, social and sustainable bond listings on HKEX also increased, with 95 listings raising over $280 billion, compared with 18 listings raising $67 billion in 2020.
The Exchange also revised its Corporate Governance Code and related Listing Rules in December 20211. This further enhanced corporate governance standards among listed issuers in Hong Kong, specifically in the areas of corporate culture, director independence and diversity. As well, the Exchange put in place Rules to end single gender boards and require issuers to set numerical targets and timelines for board gender diversity.
On disciplinary powers and sanctions, in July 2021, the Exchange implemented changes to the Listing Rules to augment the range of reputational sanctions available to it and ensure that disciplinary action can be brought against a broader range of individuals. The amended Rules strengthened the Exchange’s powers to hold accountable, and impose appropriate sanctions on, individuals responsible for misconduct and Listing Rule breaches2.
“In 2021, our initiatives furthered the competitiveness of the Exchange’s markets whilst also seeking to strengthen their quality and reputation,” said Peter Brien, Chairman of the Listing Committee.
“This year, we will review our IPO eligibility requirements for issuers from specialist technology sectors that currently find it difficult to raise capital on the Main Board due to our eligibility tests, including pre-profit ventures that require funding for their research and development costs. We will also review proposals to enhance ESG standards and climate disclosures, optimise the IPO price discovery process and conclude on our share scheme consultation,” Brien added.
The Listing Committee, which consists of 28 independent members and the HKEX Chief Executive Officer 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 2021 can be found on the HKEX website. The website also has information on the role and mode of operation of the Listing Committee.
Notes:
- This is the result of the Consultation Conclusions Paper on Corporate Governance Code & Related Listing Rules, and Housekeeping Rule Amendments. The Exchange also published a new Corporate Governance Guide for Boards and Directors and updated its frequently asked questions (FAQ Series 17) to assist issuers’ compliance with the new Rule requirements.
- For details, please refer to the Consultation Conclusions on Review of Listing Rules Relating to Disciplinary Powers and Sanctions published in May 2021.
About HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) is one of the world’s major exchange groups, and operates a range of equity, commodity, fixed income and currency markets. HKEX is the world’s leading IPO market and as Hong Kong’s only securities and derivatives exchange and sole operator of its clearing houses, it is uniquely placed to offer regional and international investors access to Asia’s most vibrant markets.
HKEX is also the global leader in metals trading, through its wholly owned subsidiaries, The London Metal Exchange (LME) and LME Clear Limited. This commodity franchise was further enhanced with the launch of Qianhai Mercantile Exchange (QME), in China, in 2018.
HKEX launched the pioneering Shanghai-Hong Kong Stock Connect programme in 2014, further expanded with the launch of Shenzhen Connect in 2016, and the launch of Bond Connect in 2017.
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