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Consultation on Proposed Amendments to the Listing Rules

Consultation on Proposed Amendments to the Listing Rules relating to Initial Listing and Continuing Listing Eligibility and Cancellation of Listing Procedures. Objectives. To further enhance the quality of issuers listed on the Exchange

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Consultation on Proposed Amendments to the Listing Rules

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  1. Consultation on Proposed Amendments to the Listing Rules relating to Initial Listing and Continuing Listing EligibilityandCancellation of Listing Procedures

  2. Objectives • To further enhance the quality of issuers listed on the Exchange • To update the requirements of the Main Board Rules to ensure that they are on a par with other leading markets

  3. Key Principles • Listing is an indicator of an issuer’s achievement, in terms of financial performance and investor acceptance • Listing on the Exchange signifies public recognition of an issuer having achieved a quality status • Cancellation of listing when an issuer fails to maintain financial performance and investor acceptance

  4. Areas of Review • Initial Listing Eligibility Criteria • Continuing Listing Eligibility Criteria • Continuing Obligations • Cancellation of Listing Procedures • Disclosure Requirements at the time of Initial Listing

  5. Continuing Listing Eligibility Criteria • To provide an exit route to under-performing issuers • To ensure the overall quality of listed issuers through their listing on the Exchange • To provide an objective, transparent and fair means for the Exchange to review the appropriateness of the continuing listing of an issuer

  6. Continuing Listing Eligibility Criteria • Financial Standards • Absolute Minimum Market Capitalisation • Insolvency • Total Disclaimer of Audit Opinion or Adverse Audit Opinion • Minimum Share Price • Reduction in Operating Assets and/or Level of Operations • Cash Companies • Prolonged Suspension • Paragraph 38 of Listing Agreement • Persistent Breaches of Main Board Listing Rules • Illegal Operation

  7. Penny Stocks • Concerns on penny stocks

  8. Penny Stocks Proposal • Minimum IPO issue price at HK$2 • Minimum share price at HK$0.50

  9. Penny Stocks Proposal • No corporate action that will result in the theoretical value of an issuer’s shares falling below HK$0.50

  10. Penny Stocks • Transitional period of 12 months

  11. Cancellation of Listing Procedures • To replace the existing set of delisting procedures • To provide a fair, transparent and effective mechanism for delisting of under-performing issuers

  12. Cancellation of Listing Procedures • To speed up the delisting process • To immediately delist issuers that have been served with a winding up order

  13. THANK YOU!

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