Update No. 54

Note to subscribers for the amendments to the rules governing the listing of securities on the Growth Enterprise Market (the "GEM Listing Rules")

Update No. 54

December 2017

Dear Sirs,

Amendments to the GEM Listing Rules

We enclose reprinted pages of the GEM Listing Rules and filing instructions. The reprinted pages incorporate amendments to implement the proposals of the "Consultation Conclusions on the Review of the Growth Enterprise Market (GEM) and Changes to the GEM and Main Board Listing Rules" published on 15 December 2017.

We have amended the GEM Listing Rules to include

(i) an increase to the minimum expected market capitalisation of a new applicant at the time of listing from HK$100 million to HK$150 million;
(ii) an increase to the minimum public float value of a new applicant at the time of listing from HK$30 million to HK$45 million;
(iii) an increase to the minimum cash flow requirement for a new applicant from HK$20 million to HK$30 million;
(iv) the introduction of a mandatory public offering requirement of at least 10% of the total offer size for all GEM IPOs with a clawback mechanism in line with Practice Note 18 to the Main Board Listing Rules;
(v) a requirement for the prior consent of the Exchange for the placing of securities of a new applicant to core connected persons, connected clients and existing shareholders, and their respective close associates;
(vi) the extension of the post-IPO lock-up requirement on controlling shareholders from one year to two years; and
(vii) the change of the name "Growth Enterprise Market" and 「創業板」 to "GEM" to reflect the new role of GEM as a market for small and mid-sized companies

In addition, we have amended the GEM Listing Rules to state that the chief executive of HKEC (an ex officio non-voting member) will not attend GEM Listing Committee meetings on individual cases in the first instance or on review as a result of the "Joint Consultation Conclusions on Proposed Enhancements to The Stock Exchange of Hong Kong Limited's Decision-Making and Governance Structure for Listing Regulation" published on 15 September 2017.

Coming into effect

The amendment will come into effect on 15 February 2018.

Please click HEREHERE to see the amendments to the GEM Listing Rules.

Yours faithfully,
For and on behalf of

The Stock Exchange of Hong Kong Limited
David Graham

Chief Regulatory Officer and Head of Listing