Note to subscribers for the amendments to the rules governing the listing of securities on the GEM (the "GEM Listing Rules")
Update No. 60
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 Proposal Relating to Listed Issuers with Disclaimer or Adverse Audit Opinion on Financial Statements” published on 24 May 2019.
Under the new GEM Listing Rules:
(a) the Exchange will normally require suspension of trading in an issuer’s securities if the issuer publishes a preliminary results announcement for a financial year and the auditor has issued, or has indicated that it will issue, a disclaimer or adverse opinion on the issuer’s financial statements;
(b) it may disapply the suspension requirement where (i) the disclaimer or adverse opinion relates solely to going concern; or (ii) the underlying issues giving rise to the audit modification have been resolved before the issuer publishes the preliminary results announcement;
(c) the suspension will normally remain in force until the issuer has addressed the issues giving rise to the disclaimer or adverse opinion, provided comfort that a disclaimer or adverse opinion in respect of such issues would no longer be required, and disclosed sufficient information to enable investors to make an informed assessment of its financial position;
(d) where the resolution of issues giving rise to the disclaimer or adverse opinion is outside the issuer’s control, a longer remedial period may be allowed, with the duration of the period being determined on a case by case basis; and
(e) as a transitional arrangement, the remedial period will be extended to 24 months for issuers that are suspended solely due to a disclaimer or adverse opinion on the issuers’ financial statements for the financial years commencing between 1 September 2019 and 31 August 2021.
Coming into effect
The amendments will apply to issuers’ preliminary annual results announcements for financial years commencing on or after 1 September 2019.
Please click HERE to see the amendments to the GEM Listing Rules.
For and on behalf of
The Stock Exchange of Hong Kong Limited
Head of Listing