HK relaxes listing rules for tech firms

Hong Kong Exchanges & Clearing Ltd set a lower threshold for advanced technology companies including those in artificial intelligence and semiconductors to list on the exchange.

For companies in the nearly 20 sectors considered “specialist technology,” the minimum market capitalisation required to list on the Hong Kong Main Board in the new rules will be HK$6 billion, the bourse operator said in a statement yesterday. The exchange lowered the floor from HK$8 billion in an original proposal.

HKEX also reduced the required market cap for pre-commercial firms to list to at least HK$10 billion from HK$15 billion. The new regime will be in effect from March 31.

“The new economy sector is rapidly changing the way in which we live and work, and this new route to market will support some of the most innovative and progressive companies of the future,” said HKEX Chief Executive Officer Nicolas Aguzin in a statement.

Allowing easier entry to public market in Hong Kong for companies with niche technology compliments China’s push to grow its own firms against the US dominance. The US is exercising broader restrictions, including limiting sales of AI chips to Chinese clients.

The eased rules for niche technology firms could also help revive Hong Kong’s initial public offering market, which slumped 68% in 2022. The bourse is on the hunt for major IPOs, including the $1.9 trillion oil giant Saudi Aramco, to strengthen its position as an international finance centre.

“Although we received majority support for most of our proposals, we have made some adjustments to the new rules, reflecting market feedback, whilst continuing to ensure that our regulatory intentions remain undiminished,” said HKEX Head of Listing Katherine Ng in the statement.