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HKEX Amends IPO Clawback Mechanism, Effective on Aug 4
Recommend 9 Positive 15 Negative 6 |
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The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of HKEX (00388.HK), published today (August 1) conclusions to its consultation paper on proposals to optimize IPO price discovery and open market requirements, and launched a further consultation on ongoing public float proposals. The Exchange received 1,253 non-duplicate responses to the Consultation Paper from a broad range of respondents. Having considered the responses, the Exchange will adopt most of its proposals, with some modifications and clarifications. In respect of the IPO offering and pricing mechanism, the key changes to the listing requirements include: (1) Minimum bookbuilding placing tranche: Require an issuer to allocate at least 40% of its shares initially on offer in an IPO to its bookbuilding placing tranche. (This allocation has been reduced from 50% in the original proposal.) (2) Allocation to public subscription tranche: Allow a new listing applicant to choose either Mechanism A or Mechanism B as its IPO offering mechanism. Mechanism A: Replace the current allocation and clawback mechanism with prescribed allocations to the public subscription tranche as follows: The maximum clawback allocation to the public subscription under Mechanism A has been increased to 35% from 20% in the original proposal. Mechanism B: Introduce an alternative mechanism that requires a minimum 10% initial allocation (and a maximum of up to 60%) of offer shares to the public subscription tranche with no clawback mechanism. (The maximum allocation to the public subscription tranche under Mechanism B has been increased to 60% from 50% in the original proposal.) The new requirements will come into effect on August 4, 2025, and apply to all issuers and all new applicants with listing documents published on or after that date. AAStocks Financial News |
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