Market Turnover


Exchange Publishes Consultation Paper on GEM Listing Reforms

26 Sep 2023
  • The Exchange publishes GEM listing reform proposals, and seeks market feedback over a six-week consultation period
  • Proposals aim to enhance GEM’s attractiveness, whilst maintaining high standards of investor protection


The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Tuesday) published a consultation paper seeking market feedback on GEM listing reforms (the Consultation Paper). The consultation window is open for a six-week period, concluding on 6 November 2023.

The proposals presented include a new streamlined transfer mechanism for eligible GEM companies to transfer to the Main Board, a new alternative eligibility test for companies in the high-growth segment, and removal of quarterly reporting requirements.

HKEX Chief Executive Officer, Nicolas Aguzin, said: “The stock exchange is one of a range of options available for SMEs seeking capital to drive growth, sustain innovation and create value. At HKEX we are fully committed to providing a supportive environment where SMEs across the region can thrive and contribute to the continued prosperity of Hong Kong and the broader community. We look forward to receiving the market’s feedback on our consultation.”

Key Proposals

Transfer Mechanism

  • A new streamlined transfer mechanism to enable qualified GEM issuers to transfer to the Main Board without the need to: (a) appoint a sponsor to carry out due diligence, or (b) produce a “prospectus-standard” listing document.
  • Instead a transfer applicant must:
    • meet all the qualifications for listing on the Main Board;
    • have published financial results for three full financial years as a GEM issuer with ownership continuity and control and no fundamental change in its principal business;
    • meet:
      1. a daily turnover test – a streamlined transfer applicant must have reached a prescribed minimum daily turnover threshold on at least 50% of the trading days over a prescribed reference period of 250 trading days1 before the transfer application and until the commencement of dealings on the Main Board (Reference Period);
      2. a volume weighted average market capitalisation test – a streamlined transfer applicant must have a volume weighted average market capitalisation over the Reference Period that could meet the minimum market capitalisation requirement for Main Board listing; and
      3. a clean compliance record requirement over the 12 months preceding the transfer application and until the commencement of dealings on the Main Board.2
  • A GEM issuer that cannot meet these eligibility requirements may apply for a transfer under existing requirements.

Initial Listing Requirements

A new alternative eligibility test that targets high growth enterprises that are heavily engaged in research and development (R&D) activities. A GEM listing applicant using this test must, among other criteria, have R&D expenditure of at least HK$30 million in aggregate for the two financial years prior to listing, where the R&D expenditure incurred for each financial year must be at least 15% of the total operating expenditure for the same period.

Continuing Obligations

The removal of mandatory quarterly reporting requirements and the alignment of other ongoing obligations with those of the Main Board. 3


HKEX Head of Listing, Katherine Ng, said: “In response to preliminary market feedback, we engaged with a broad range of stakeholders, including SMEs and their representatives, to hear their views regarding GEM and its development. Our resulting proposed reforms aim to broaden GEM’s appeal to issuers, while maintaining market confidence, and important high standards of investor protection.”

The groups of stakeholders that the Exchange engaged in preparing its proposals for consultation included industry associations, professional bodies and industry practitioners (e.g. law firms, sponsor firms and investment managers) in Hong Kong, and institutional investors in Mainland China that actively invest in Beijing Stock Exchange’s listed issuers.

The Exchange is seeking market feedback on its proposals and the proposed Listing Rules to implement them. The public comment period ends on 6 November 2023. Interested parties are encouraged to respond to the Consultation Paper by completing and submitting a questionnaire on the HKEX website.

Please also refer to the HKEX podcast with Katherine Ng on these GEM Listing Reforms.


  1. The reference to “trading days” excludes the number of trading days on which trading of the applicant’s securities was halted or suspended.
  2. A streamlined transfer applicant must: (a) not have been held to have committed a serious breach of any Listing Rules in the 12 months preceding the transfer application and until the commencement of dealings in its securities on the Main Board; and (b) not be the subject of any investigation by the Exchange, or any ongoing disciplinary proceedings under Chapter 3 of the GEM Listing Rules, in relation to a serious breach or potentially serious breach of any Listing Rules as at the date of the transfer application and the date when dealing in its securities commences on the Main Board.
  3. These include (a) the removal of the existing requirement for one of the executive directors of a GEM issuer to assume responsibility for acting as the issuer’s compliance officer, (b) the shortening of engagement period of a GEM issuer’s compliance adviser so that it ends on the date on which the issuer publishes its financial results for the first (instead of the second) full financial year commencing after the date of its initial listing; and (c) the removal of other requirements relating to a compliance adviser’s responsibilities that only apply to GEM issuers.



About HKEX

Hong Kong Exchanges and Clearing Limited (HKEX) is a publicly-traded company (HKEX Stock Code:388) and one of the world’s leading global exchange groups, offering a range of equity, derivative, commodity, fixed income and other financial markets, products and services, including the London Metal Exchange.

As a superconnector and gateway between East and West, HKEX facilitates the two-way flow of capital, ideas and dialogue between China and the rest of the world, through its pioneering Connect schemes, increasingly diversified product ecosystem and its deep, liquid and international markets.

HKEX is a purpose-led organisation which, across its business and through the work of HKEX Foundation, seeks to connect, promote and progress its markets and the communities it supports for the prosperity of all.





Updated 20 Dec 2023