(1) An issuer (other than an investment company in which case the conditions set out in Chapter 21 apply) will not be regarded as suitable for listing if its group’s assets consist wholly or substantially of cash and/or short-term investments (as defined in the notes to rule 14.82).

(2) Cash and/or short-term investments held by a member of an issuer’s group that is a banking company (as defined in rule 14A.88), an insurance company (as defined in rule 14.04) or a securities house (as defined in rule 14.04) will normally not be taken into account when applying rule 8.05C(1).

Note: This exemption will not apply to an issuer that operates a securities house where the Exchange has concerns that the issuer is holding cash and short-term investments through a member to circumvent rule 8.05C(1). For example, an issuer holding excessive cash and/or securities investments cannot circumvent the rule by holding such assets through a member that is a licensed broker with minimal brokerage operations. The Exchange will apply a principle based approach and consider, among others, the cash and/or short-term investments in light of the member’s operating model and its cash needs for the purpose of its regulated activities, which should be substantiated by its historical track record.

Note: See Practice Note 3