Exchange Implements IPO “Double Dipping” Reforms

香港交易所脈搏/HKEx Pulse

2023-11-21

导读：The objective of the new exemption is to provide more flexibility to independent investors.

Highlights:

The Exchange introduces a new exemption from "double dipping" restrictions with immediate effect
The new size-based exemption will enhance the IPO price discovery process by facilitating greater participation by independent investors

The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of HKEX, today published a revised Guidance Letter HKEX-GL85-16 (Guidance) allowing the existing shareholders (including pre-IPO investors) and cornerstone investors of a new applicant to subscribe for or purchase further securities in an IPO (i.e. to double dip) under certain specified conditions (see Size Exemption Conditions below).

The objective of the new exemption is to provide more flexibility to independent investors. Greater IPO participation by independent investors of a listing applicant should help ensure that the IPO price discovery process is robust and results in a final offer price that reflects market opinion.

With immediate effect, “double dipping” will be permitted if it can be demonstrated that an IPO meets the new Size Exemption Conditions, namely that:

the offer has a total value of at least HK$1 billion;
the allocation to all existing shareholders and their close associates (whether as cornerstone investors and/or as placees) as permitted under the exemption does not exceed 30 per cent of the total number of securities offered; and
each director, chief executive, controlling shareholder and, for PRC issuers, supervisor, of the listing applicant have confirmed that the listing applicant’s offer securities are not allocated to them or their close associates under the exemption.

Katherine Ng

Head of Listing, HKEX

HKEX is committed to reviewing and elevating our listing proposition. We believe this new arrangement will be beneficial to the book building and share allocation process and is designed to maintain the optimum balance between market facilitation and investor protection.

The revised Guidance will take effect immediately and is available on the HKEX website. A marked-up version showing changes against the last published version of the Guidance is also available on the HKEX website.

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