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Exchange Publishes Guidance on Reasons for Rejected Listing Applications in 2018

22 Mar 2019

  • Heightened scrutiny of commercial rationale for listing delivered notable increase in rejected listing applications in 2018
  • Rejections were not sector specific; rather focus was on whether rationale for listing was supported by the applicant’s expected growth and therefore, need for funding
  • Results have helped maintain market quality and Exchange will continue exercising discretion to assess suitability

The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Friday) published its annual listing decision on rejected applications (Listing Decision).  This provides background and guidance on the reasons for the rejection of certain listing applications during 2018.  In 2018, the Exchange rejected 24 listing applications, as compared with 3 rejections in 20171.

To list on the Exchange, companies need to satisfy eligibility conditions that include certain financial requirements.  In addition, the Exchange must find the applicant and its business suitable for listing.  The Exchange’s vetting process is qualitative and the review on the suitability of each applicant is holistic.

“In 2018, there was a notable increase in the number of applicants that were rejected as part of the listing application process.  This was in large part a direct result of the heightened scrutiny applied by the Exchange following publication of the revised Guidance Letter on suitability in April 2018.  The quality and reputation of Hong Kong’s market is a primary focus of the Exchange, and today’s Listing Decision will provide greater transparency and understanding of how the Exchange assesses suitability for listing,” said David Graham, HKEX’s Head of Listing.

As stated in the revised Guidance Letter HKEX-GL-68-13A on suitability, the applicant’s commercial rationale for listing is a primary focus of assessing its suitability.  As part of the Exchange’s continuous efforts to maintain market quality, more consideration is also given to whether the proposed use of proceeds and funding needs are consistent with its business strategies and future plans.

Listing Decision HKEX- LD121-2019 can be found on the HKEX website.



1    The figures reflect listing applications that have exhausted all avenues of appeal with the Exchange.



Updated 22 May 2020