Hong Kong pledged to vet and debut companies in about 100 days in a bid to guarantee a set time frame for initial public offering (IPO) applicants.
For companies fully meeting listing requirements, the stock exchange and regulator will limit the question-and-answers in two rounds to no more than 40 business days, according to a joint statement by Hong Kong Exchanges and Clearing and the Securities and Futures Commission (SFC).
Another 60 business days are anticipated to be needed by applicants and sponsoring banks to address any comments by regulators. Currently, the median time of getting approved is 173 business days.
For mainland-listed firms with a market capitalisation of least HK$10 billion (S$1.7 billion) and that are compliant with all laws and regulations, Hong Kong regulators will further squeeze their queries into one round of under 30 business days, according to the statement.
The move comes as IPOs are stirring back to life after a prolonged lull. China in late September unleashed a barrage of measures designed to jump-start the economy and support stock markets.
The new timeline will “provide greater clarity and certainty in the application process for New Listing applications, thereby assisting potential applicants and their advisers in formulating their listing plans”, said HKEX’s head of listing, Ms Katherine Ng.
The SFC fully supports the plan, saying it was in line with its strategic priority to improve the global competitiveness and appeal of Hong Kong’s capital markets, said its executive director of corporate finance, Mr Michael Duignan.
It could add further momentum to the city’s market. Capital raised through IPOs surged more than sixfold to HK$42.3 billion in the third quarter, while average daily stock turnover in Hong Kong rebounded 21 per cent, according to Bloomberg Intelligence.
The accelerated timeline does not apply to applications with complex regulatory
