Global | Publication | 五月 2025
By a joint announcement on 6 May 2025 (the Announcement), the Securities and Exchange Commission (the SFC) and The Stock Exchange of Hong Kong Limited (the SEHK) launched a dedicated channel (the TECH) for listing applicants of Specialist Technology Companies1 and Biotech Companies2 (collectively, the Applicants).
The Announcement also formally permits confidential filing of listing applications by these Applicants, and introduced initiatives which aim to streamline the listing requirements for those with a shareholding structure of weighted voting rights (WVR)3. These changes take effect immediately.
How do the new initiatives assist the IPO application process for these technology enterprises? This article provides an overview of the topic.
As a commitment to attract high-quality Specialist Technology and Biotech companies, the SFC and the SEHK have launched the TECH. It is a dedicated platform for the Applicants offering early and customised assistance by the SEHK, featuring:
This initiative aims to help these companies navigate the regulatory requirements and prepare for successful listings in Hong Kong. TECH can be accessed through the SEHK’s TECH webpage.
When applying for listing on the SEHK, companies must submit a prospectus detailing their operations, financials, management, future plans and associated risks. It is available to the public on the SEHK website upon filing of the listing application.
However, Specialist Technology Companies and Biotech Companies are often in early developmental stages or have yet to commercially launch their products. As such, the premature public disclosure of their prospectuses may pose concerns on the preservation of their proprietary technologies and strategic information.
To address the issue, the SEHK now permits these companies to confidentially file their prospectuses. This measure reduces the premature exposure of unnecessary information during the regulatory review, ensuring it only becomes public at the offer stage. If the IPO does not proceed eventually, confidential filing ensures the sensitive details remain undisclosed, preserving the companies' competitive edge.
The Applicants are subject to the eligibility and suitability requirements under Chapter 18A (Biotech Companies) or 18C (Specialist Technology Companies) of the SEHK’s Main Board Listing Rules (the MBLR). Those with WVR structures must also meet additional criteria in Chapter 8A of the MBLR.
These additional criteria include the Innovative Company Requirements and external validation of meaningful third-party investments (collectively, Specific WVR Requirements). Under the new initiatives, Applicants who meet the regulatory requirements in full under Chapters 18A or 18C (the Condition) will be presumed to have satisfied the Specific WVR Requirements (the Measure).
With the Measure, Applicants are relieved from demonstrating all Specific WVR Requirements. As noted in the table below, some requirements are effectively dispensed with, while some to a certain extent, remain because similar requirements also apply under Chapters 18A or 18C:
|
Specific WVR Requirements (fully relieved under the Measure, provided the Condition is satisfied) |
Any similar requirements? |
|
|
Biotech Companies Under MBLR Chapter 18A |
Specialist Technology Companies Under MBLR Chapter 18C |
|
|
Innovative Company Requirements4 |
||
|
Applicant’s success is demonstrated to be attributable to the application of : (1) new technologies; (2) innovations; and/or (3) a new business model to their core business, which differentiate them from other existing players |
Innovative elements required, but with different focuses Applicant shall have developed at least one Core Product5 beyond the concept stage, as determined by the competent authorities expressly designated under the MBLR |
Innovative elements required, but with different focuses Applicant shall be primarily engaged in R&D of, and commercialisation and/or sale of Specialist Technology Products1 within acceptable sectors of the Specialist Technology Industries listed out in the MBLR and relevant guidance. |
|
R&D is a significant contributor of the Applicants’ expected value and constitutes a major activity and expense, supported by explanations
|
R&D required, but with different focuses Applicant shall have primarily engaged in R&D for the development of Core Product, which shall continue during the 12 month prior to listing Primary reason for IPO is to raise funds for R&D to commercialise the Core Product SEHK has provided prescriptive guidelines on the above
|
R&D required, but with different focuses Applicant shall have engaged in the R&D of Specialist Technology Products for at least 3 financial years prior to listing Specific level of R&D expenditure required by MBLR, the amount of which varies depending on the commercialisation of Core Products
|
|
Applicant’s success is demonstrated to be attributable to its unique features or intellectual properties (IP). |
Clearer IP requirements Applicant must demonstrate their ownerships of the IP rights relating to the Core Product |
Not required IP is a matter of prospectus disclosure |
|
Applicant has an outsized market capitalisation/intangible asset value relative to its tangible asset value |
Not required |
Not required |
|
External validation (third party investments) |
||
|
Applicant has previously received meaningful third party investments from at least one sophisticated investor, but no investment amount is specified |
A minimum of one sophisticated investor has made a meaningful investment in the Applicant at least six months before the date of the proposed listing and such investor will remain at IPO Specified investment amounts required by MBLR, which varies depending on the size of market capitalisation |
Applicant must have 2-5 sophisticated investors who have invested in the company for at least 12 months before the listing application (the Pathfinders), and who (in aggregate or individually) have invested minimum amounts specified under MBLR (by share percentage or monetary value). The total investment from all sophisticated investors (including non-Pathfinders) must meet specific thresholds based on the expected market capitalization of the Applicant at the time of listing All sophisticated investors should be independent of the Applicant |
|
Investors shall retain an aggregate 50% of their investment at the time of IPO for a period of at least six months post-IPO (the Lock Up) |
Not required under Chapter 18A (but if the Applicant will rely on the Measure, the Lock Up will apply) |
Shares beneficially owned by Pathfinders who satisfy the minimum investment benchmarks will be subject to disposal restrictions for six months after listing |
Note: For the avoidance of doubt, this table provides a focused overview on the Specific WVR Requirements only. Applicants remain subject to other applicable requirements under MBLR Chapters 8A, 18A or 18C (as the case may be).
As indicated in the table, where there are similar requirements under Chapters 18A and 18C, the SEHK has given guidance and parameters which serve as a yardstick to the IPO preparation process. Compared to the Specific WVR Requirements (which may rely on measurements of less tangible concepts such as “attribution of success”), Chapters 18A or 18C are generally more structured for the Applicants to navigate.
The introduction of the TECH, along with a confidential filing and streamlined processes for Applicants with WVR, highlights the SFC's and the SEHK's dedication to supporting IPOs of high-quality tech enterprises. These measures enhance Hong Kong's appeal as a listing destination, ensuring innovative companies may meet their listing goal with greater confidence and efficiency.
Specialist Technology Companies and Biotech Companies considering a listing in Hong Kong are encouraged to explore these new opportunities and engage with the SEHK to benefit from tailored guidance and support.
Publication
By a joint announcement on 6 May 2025, the Securities and Exchange Commission and The Stock Exchange of Hong Kong Limited launched a dedicated channel for listing applicants of Specialist Technology Companies and Biotech Companies.
Subscribe and stay up to date with the latest legal news, information and events . . .
© Norton Rose Fulbright LLP 2025
