Hong Kong Capital Markets Update – Issue 5, August 2019
Hong Kong Capital Markets Update – Issue 5, August 2019
HKEX’s consultation conclusions on the proposal relating to Backdoor Listings, Continuing Listing Criteria and Other Rule Amendments
On 26 July 2019, the Stock Exchange of Hong Kong Limited (the Exchange) published the conclusions of its consultation on the proposal relating to backdoor listing, continuing listing criteria and other Listing Rule amendments.
In its Hong Kong Capital Markets Update, KPMG notes that after considering comments from respondents, the Exchange has decided to adopt the proposals in the consultation, with certain modifications detailed below:
Key amendments:
- Clarify the objective of the reverse takeover (RTO) Rules
- Amend the “series of transactions and/or arrangements” factor under RTO Rules
- Revise the additional requirements for RTOs undertaken by Listing Rule 13.24 issuers
- Remove the “pre-ordained” strategy on aborted transactions
- Modify the eligibility requirements for extreme transactions
- Modify the proposed amendments to the current Listing Rule 13.24 (requiring issuers to maintain sufficient operations and/or assets of sufficient value) and Listing Rules 14.82 and 14.83 (restrictions on cash companies).
The Listing Rule amendments will take effect from 1 October 2019.
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