Chapter 9A

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Question:

What are the changes to the GEM transfer mechanism?

Answer:

The changes to GEM transfer mechanism are summarised below:

  Existing New
Sponsor Not Required Required and must be appointed at least two months before the submission of the listing application
Publication requirement
•   Announcement of an application to transfer to Main Board
•   Detailed transfer announcement
•   Announcement of an application to transfer to Main Board
•   Application Proof
•   Listing Document
•   Formal notice

Certain GEM transfer applications note under transitional arrangements requires the issue of detailed transfer announcements only

Initial listing fee 50% of the Main Board initial listing fee Standard initial listing fee for Main Board

Note: A GEM transfer application submitted by an Eligible Issuer (as defined in Main Board Rule 9A.01A) that has not changed its principal business and controlling shareholder since listing on GEM, and is not an infrastructure or a mineral company. See FAQ No. 014-2017 for further information

FAQ Series N/A, FAQ No. 011-2017
LR reference: Main Board Rules 3A.02, 9A.01A, Appendix 28 paragraph 9 / GEM Rules N/A
Released on 15/12/2017

Question:

How will the changes affect new listing applicants?

Answer:

New listing applicants will be affected by the following changes:

  Before the Rule Amendment Effective Date On and after the Rule Amendment Effective Date
GEM listing applicants Applications will be processed under the Main Board or GEM Listing Rules in force immediately before the Rule Amendment Effective Date, with only one renewal of such applications permitted thereafter Applications will be processed under amended GEM Listing Rules (see FAQ No. 009-2017) and any subsequent GEM transfer applications will be processed under the amended Main Board Listing Rules (see FAQ No. 010-2017)
Main Board listing applicants Applications will be processed under amended Main Board Listing Rules (see FAQ No. 010-2017)

FAQ Series N/A, FAQ No. 012-2017
LR reference: Main Board Rules 9A.01A / GEM Rules 10.11A, 10.12(1A), 11.12A, 11.14(3), 11.23(2), 11.23(6), 11.23(9), 13.16A, PN6
Released on 15/12/2017

Question:

What is a "valid" listing application under the definition of an "Eligible Issuer"?

Answer:

A GEM listing application that was submitted to the Exchange on or before 16 June 2017 and (i) has not been rejected or returned by the Exchange or withdrawn by the applicant; and (ii) if lapsed, renewed within three calendar months from the lapse date (the "Renewed Application").

FAQ Series N/A, FAQ No. 014-2017
LR reference: Main Board Rule 9A.01(A)(2), GEM Rule 12.09(1)
Released on 15/12/2017

Question:

Is shareholders' approval required for transfer of listing under the Listing Rules?

Answer:

No. However, it may be required under the transfer applicant’s constitutive documents, or under applicable company law in the jurisdiction of incorporation of the transfer applicant.

FAQ Series 5, FAQ No. 16
LR reference: Main Board Rule 9A.02 / GEM Rule 9.24
Released on 2/5/2008 (Updated in February 2020)

Question:

How should a transfer applicant demonstrate compliance with the minimum market capitalisation requirement under Rule 8.09(2) or paragraph 7(1)(a) of Appendix 28 to Main Board Rules (“MB Mkt Cap Requirement”)?

Answer:

Market capitalisation should be calculated using the share price on the date of listing on the Main Board.

In practice, the Exchange will assess whether the applicant will be able meet the MB Mkt Cap Requirement based on the closing share price on the trading day immediately before the first day of the proposed transfer (i.e. Main Board listing). The Exchange will also examine the applicant’s share price movement during the trading record period, and if the applicant had not been able to meet the MB Mkt Cap Requirement for a prolonged period of time, the Exchange will closely monitor the applicant’s share price movement and critically examine any unusual increase, especially when close to the day of transfer. The Exchange may not approve the transfer application until the applicant and its sponsor provide reasonable and satisfactory explanation on the unusual share price movement. Further, if the applicant’s share price and/ or trading volume had been volatile, the Exchange will require the applicant to make relevant prominent disclosure in the transfer announcement/ listing document.

FAQ Series 5, FAQ No. 21
LR reference: Main Board Rules 9A.02(1), 8.09(2), paragraph 7(1)(a) of Appendix 28
Released on 2/5/2008 (Updated in February 2020)

Question:

Can a GEM issuer submit a transfer application before it publishes the annual report of the first full financial year which commenced after the date of its GEM listing, if such annual report will be published before its intended date of listing on the Main Board? Please provide an example to illustrate when a GEM issuer can submit its transfer application.

Answer:

No. A GEM issuer applying for transfer must have such annual report when it submits its transfer application. For example, if a GEM issuer has a December financial year end and is listed on GEM in 2008, under Rule 9A.02(2), it could submit a transfer application after the annual report for the financial year 2009 has been published and distributed to its shareholders, which is required to be within the first three months of 2010 under GEM Rule 18.03.

FAQ Series 5, FAQ No. 17
LR reference: Main Board Rule 9A.02(2)
Released on 2/5/2008 (Updated in February 2020)

Question:

What factors would the Exchange take into consideration in assessing whether a “ breach” by a GEM transfer applicant is serious?

Answer:

The Exchange will normally have regard to the following factors:

•   the nature and extent of the breach (for example, whether it involves any prejudice or risk of prejudice to investors such as failure to obtain prior shareholder approval for connected transactions, or failure to make disclosure under Rule 13.09 and the duration and frequency of the breach); and
•   whether there are evidences that the breach involves fraud, deceit or dishonesty, is deliberate or due to recklessness, or reveals material or systemic weaknesses in the listed company's internal control procedures.

FAQ Series 5, FAQ No. 20
LR reference: Main Board Rule 9A.02(3)
Released on 2/5/2008 (Updated in February 2020)

Question:

How can a GEM issuer ascertain it fulfils the requirement under Rule 9A.02(3) before it submits a transfer application?

Answer:

The GEM issuer may request for a written confirmation from the Listing Department on whether it can fulfil the requirement under Rule 9A.02(3).

The Listing Department will confirm whether the GEM issuer has been the subject of any disciplinary investigation by the Exchange in relation to a serious breach or potential serious breach of any GEM Listing Rules or Exchange Listing Rules in the past 12 months from the date of the confirmation letter. If additional information that alters such confirmation comes to light within two months of the letter, the Exchange will notify the GEM issuer in writing.

FAQ Series 5, FAQ No. 22
LR reference: Main Board Rule 9A.02(3)
Released on 2/5/2008 (Updated in February 2020)

Question:

What are the facilitative measures for GEM transfer applicants after the removal of the GEM streamlined process?

Answer:

Facilitative measures are as follows:

(a) Dispensation from the following requirements for GEM transfer applicants which follow Chapter 9 application procedures1 (see new Main Board Rule 9A.03(1A) and Main Board Rule 9A.03(1B)):
-   Main Board Rule 9.11(17a): production of certificate of incorporation;
-   Main Board Rule 9.11(30): production of a HKSCC notice that the securities to be listed are Eligible Securities; and
-   Main Board Rule 12.01B: publication of Post Hearing Information Pack requirement.
(b) Dispensation from the post-IPO lock-up on controlling shareholders requirement is maintained (Main Board Rule 10.07(4)), provided that any plan by the controlling shareholders of the issuer to dispose of their interests in the issuer in the next 12 months has been prominently disclosed in the listing document.
(c) Dispensation from the restriction on post-listing fund-raising is maintained (Main Board Rule 10.08(5)), provided that any plan to raise funds within six months from the date of the transfer of the issuer's listing to the Main Board has been prominently disclosed in the listing document.
(d) Dispensation from the compliance adviser requirement under Main Board Rule 3A.19 is maintained (Main Board Rule 9A.13 and new Main Board Appendix 28, paragraph 16).
(e) The GEM delisting procedures under Chapter 9 of the GEM Rules do not apply to GEM transfer applications.

FAQ Series: N/A, FAQ No. 018-2017
LR reference: Main Board Rules 3A.19, 9.11(17a), 9.11(30), 9A.03, 10.07(4), 12.01B / GEM Rule 9.20
Released on 15/12/2017

Question:

If a GEM issuer transfers the listing of its equity securities to the Main Board, would the related GEM-listed warrants, options or convertible instruments be transferred to Main Board?

Answer:

Yes, any related GEM-listed warrants, options or convertible instruments are expected to transfer to the Main Board simultaneously with the equity securities, which is in line with the spirit of Main Board Listing Rules 15.05 and 16.02.

FAQ Series 5, FAQ No. 28
LR reference: Main Board Rules 9A.10
Released on 2/5/2008 (Updated in February 2020)

Question:

If there is an issue of new shares at the time of or shortly before the transfer of listing, will there be any parallel trading arrangements (i.e. with existing shares traded on GEM and newly issued shares traded on the Main Board)?

Answer:

No. Parallel trading of securities of the same issuer on both boards is not allowed. There should be a clear-cut date for cessation of trading on GEM and commencement of trading on the Main Board.

FAQ Series 5, FAQ No. 29
LR reference: Main Board Rule 9A.11
Released on 2/5/2008 (Updated in February 2020)

Question:

If a GEM issuer obtained shareholders' approvals for continuing connected transactions which will take place within a certain period, and transfers its listing from GEM to Main Board during that period, would it be necessary for the GEM issuer to obtain shareholders' approval again after the transfer to the Main Board?

Answer:

No, if there has not been any change of facts or circumstances since the original shareholders' approval was granted, a GEM issuer does not need to refresh the shareholders' approval merely because of its transfer to the Main Board. The effect of the shareholders' approval shall continue until its original expiry date.

FAQ Series 5, FAQ No. 30
LR reference: Main Board Rule 9A.12(2)
Released on 2/5/2008 (Updated in February 2020)

Question:

Can a GEM transfer applicant choose/ buy its new Main Board stock code?

Answer:

Yes, all GEM transfer applicants must change its stock code when it transfers to the Main Board, and they can choose/ buy their preferred stock code under the process same as that applicable to new Main Board IPO applicants.

FAQ Series 5, FAQ No. 15
LR reference: Main Board Rules Chapter 9A general / GEM Rule 9.24
Released on 2/5/2008 (Updated in February 2020)

Question:

Will there be a listing ceremony for transferring to the Main Board from GEM?

Answer:

A listing ceremony can be arranged on the issuer's request as cases of a new Main Board IPO.

FAQ Series 5, FAQ No. 34
LR reference: Main Board Chapter 9A / GEM Rules N/A
Released on 2/5/2008

 


 

1 These GEM transfer applicants include those (i) GEM transfer applicants that are subject to the new Main Board Rules; and (ii) GEM transfer applicants under the transitional arrangements, but have changed in businesses and/or controlling shareholders since listing on GEM or are infrastructure or mineral companies.