Hong Kong to Accelerate IPO Screening to Enhance City’s Appeal

In a joint statement on Friday, the Securities and Futures Commission (SFC) and the Hong Kong Stock Exchange (HKEX) announced plans to assess new initial public offerings (IPOs) and raise any regulatory or suitability concerns within 40 working days. Applicants and their advisers will have 60 working days to address these issues, the statement added.

“Subject to the approval of the listing board and other relevant authorities, the application process will be completed within the six-month application period,” the statement said.

This updated timeline introduces greater clarity and transparency to Hong Kong’s IPO process, which has historically taken months or even years due to inefficiencies in communication and duplicated procedures. As of September 30, companies have raised $7.14 billion through IPOs this year, making Hong Kong the world’s most active IPO market. The city has ranked among the top global fundraising destinations seven times between 2009 and 2019.

A more than 20 percent rally in Chinese stocks, both domestically and internationally, since Beijing’s large-scale stimulus announcement on September 24 has also driven up valuations, enabling companies to price their new shares higher.

John Lee Chen-kwok, Vice President and Head of Greater China Global Banking at UBS, remarked, “The move is certainly a positive one, as it offers a clearer timeline for companies looking to list in Hong Kong. This will enhance the competitiveness of the Hong Kong IPO market compared to other exchanges.”

Additionally, the SFC and HKEX have set a 30-business-day timeframe to review IPO applications from Shanghai- and Shenzhen-based companies with a market capitalization of at least HK$10 billion ($1.28 billion), provided all necessary documents and disclosures are in order.