Hong Kong Exchanges and Clearing : Exchange Announces the Effective Date of Unwinding the Delegated Authority to Approve GEM Listing Applications and Publishes Related Changes to GEM Listing Rules

Regulatory

18 Oct 2019

• Unwinding of the authority to approve GEM listing applications from the Listing Department to the Listing Committee will be effective on 1 January 2020

The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Friday) announced the effective date of unwinding the authority delegated to the Listing Department by the GEM Listing Committee to approve GEM listings (Delegated Authority) and published related changes to GEM Listing Rules.

In June 2017, the Exchange indicated in the 'Consultation Paper on the Review of Growth Enterprise Market (GEM) and Changes to the GEM and Main Board Listing Rules' (GEM Consultation Paper) that the Delegated Authority would be unwound and the power to approve GEM listing applications would be returned to the GEM Listing Committee, considering (i) the time to listing for GEM applicants has not necessarily shortened, given the Listing Department has been processing significantly more GEM listing applications since 2008; and (ii) there have been comments that the then GEM requirements have been exploited by some market players, the GEM listing approval process would benefit from the GEM Listing Committee members' collective market expertise and that this outweighs the main disadvantage of imposing additional workload on the GEM Listing Committee.

As announced by the Exchange in December 2017 with respect to the consultation conclusions on the GEM Consultation Paper (see press release dated 15 Dec 2017), the Exchange indicated that it would unwind the Delegated Authority following the outcome of a separate consultation on the review structure for decisions of the Listing Committee (Review Structure Consultation).

The conclusions to the Review Structure Consultation were published in January 2019. A new independent review committee was formed to act as a final review body for decisions made by the Listing Committee and the related rule amendments took effect on 6 July 2019 (see press release dated 5 Jul 2019). Accordingly, the Exchange has now amended the GEM Listing Rules (Amended Rules) to reflect the unwinding of the Delegated Authority which can be downloaded from the 'Listing - Rules and Guidance - Listing Rules - Amendments to GEM Listing Rules' section of the HKEX website.

Rule Amendment Effective Date and Implementation

The Amended Rules will become effective on 1 January 2020 (Rule Amendment Effective Date).

New GEM listing applications (including any renewed applications) that are submitted on or after the Rule Amendment Effective Date will be processed under the Amended Rules.

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