The Hong Kong Stock Exchange (HKEX) made major changes to the HKEX Listing Rules on 4 August 2025, including a reduction in the portion of IPO shares available for retail allocation and in the public float requirement for companies listing on the HKEX. The changes come as the HKEX regains its position as the world’s top IPO fund-raising platform and sees record southbound buying of HKEX-listed stocks through Stock Connect.1 Hong Kong’s IPO market experienced a significant resurgence in the first half of 2025, raising HK$107 billion in 42 listings.2 The remarkable performance was fueled by a rise in A+H listings, notably the listing of CATL, the world’s biggest electric vehicle battery manufacturer, which together contributed over 70% of the IPO funds raised on the HKEX during that period.
While most of the proposed Listing Rule changes were adopted, some of the key proposals have been modified. The percentage of IPO offer shares required to be allocated to the placing tranche has been reduced to 40% (from 50% in the original proposal), and the maximum clawback allocation to the retail tranche has been increased to 35% from 20% under the original proposal. Other proposals were not adopted: the six-month lock-up on IPOs’ cornerstone investors has been retained, and HKEX did not adopt the proposed upward adjustment of the final IPO price. Despite significant support for a new OTC board to trade delisted and suspended shares and those unable to meet the HKEX Listing Rules’ eligibility criteria for listing, the HKEX said only that it will continue consulting with stakeholders regarding the feasibility of an OTC market and will update the market on any progress.
As indicated in the HKEX’s Consultation Paper – Proposals to Optimise IPO Price Discovery and Open Market Requirements published in December 2024, having received support for its tiered initial public float requirements, the HKEX has launched a further consultation on the ongoing public float requirement. The proposals are set out at Part IV of the Conclusions and Further Consultation Paper – Proposals to Optimise IPO Price Discovery and Open Market Requirements published on 1 August 2025. The deadline for responding to the further consultation is 1 October 2025; responses can be submitted by completing the questionnaire on the HKEX website at https://surveys.hkex.com.hk/jfe/form/SV_eCInFGrHJIaCGOi.
The HKEX Listing Rule changes are now in effect and apply to all companies listed on the Hong Kong Stock Exchange’s Main Board and GEM and to new listing applicants publishing listing documents on or after 4 August 2025. The HKEX has updated its Guide for New Listing Applicants to reflect the HKEX Listing Rule changes. For a summary of the HKEX’s proposals in its December 2024 Consultation Paper, please see Charltons’ newsletter HKEX Consults on IPO Price Discovery, Open Market Requirements and HK OTC Market.