The Stock Exchange of Hong Kong Limited (Exchange) published its consultation conclusions¹ (Consultation Conclusions) on 1 August 2025, following its earlier consultation launched on 19 December 2024 regarding proposed enhancements to the IPO price discovery process and open market requirements. The majority of the proposals received broad market support and have been adopted, with certain refinements made in response to stakeholder feedback. The revised Listing Rules came into effect on 4 August 2025 and apply to all issuers and new applicants with listing documents issued on or after that date.

In parallel, the Exchange has initiated a further consultation on proposed changes to the ongoing public float thresholds. Market participants are invited to submit their views and the Exchange has indicated that it will publish a separate set of conclusions in due course.

A summary of the key requirements introduced under the Consultation Conclusions is set out below.

Open market requirements

Calculation of public float

Under the revised Listing Rules, the methodology for calculating the public float percentage of securities newly listed on the Exchange has been clarified and refined. The public float will now be determined by reference to the total number of securities in the relevant class being listed, rather than the issuer's total number of issued shares across all classes.

For PRC issuers, the calculation of the public float percentage will be based solely on the number of H shares held by the public. Other shares within the same class, such as A shares or unlisted shares, will be included in the denominator of the calculation but excluded from the numerator.

Tiered initial public float thresholds

The Exchange has introduced a tiered structure for initial public float thresholds applicable to any class of securities newly listed, with the exception of PRC issuers that have other listed shares.

The Exchange has clarified that it will retain the discretion to waivers from strict compliance with these thresholds on a case-by-case basis. Such waivers may be considered where the expected market value of the relevant class of securities significantly exceeds HK$45 billion at the time of listing.

In relation to the requirements for PRC issuers with other listed shares, the portion of H shares for which listing is sought that are held by the public, at the time of listing, must represent at least 10% of the total number of issued shares in the class to which H shares belong or at least HK$3 billion of expected market value.

New initial free float requirements

The revised Listing Rules introduce new minimum thresholds for the initial free float of securities in public hands at the time of listing. These requirements are intended to ensure that a sufficient volume of shares is freely tradable upon listing, thereby supporting market liquidity and price discovery.

For new listing applicants, the free float in public hands must either (i) represent at least 10% of the number of shares in the relevant class for which the listing is sought, with an expected value of at least HK$50 million; or (ii) have an expected market value of at least HK$600 million at the time of listing. In the case of PRC issuers with no other listed shares, the same thresholds apply to H shares held by the public and not subject to any disposal restrictions at the time of listing.

For PRC issuers with other listed shares, H shares held by the public and not subject to any disposal restrictions, at the time of listing, must either (i) represent at least 5% of the total number of issued shares in the class to which H shares belong, with an expected market value of at least HK$50 million; or (ii) have an expected market value of at least HK$600 million at the time of listing.

IPO offering mechanism

Regulatory lock-up on cornerstone investment

The existing regulatory lock-up requirement applicable to cornerstone investments will remain unchanged. Cornerstone investors will continue to be subject to a six-month lock-up period following listing.

Allocation to the placing tranche

The Exchange has adopted the proposal to require that a minimum of 40% of the shares initially offered in an IPO be allocated to the bookbuilding placing tranche. For specialist technology companies, the existing requirement that at least 50% of the total offer shares be allocated to independent price-setting investors will continue to apply.

Placee spread

The Exchange has removed the previously prescribed minimum spread guidelines, which stipulated that there should be no fewer than three holders for each HK$1 million of the placing and a minimum of 100 holders in the IPO placing tranche. However, the Exchange has retained the requirement for an adequate spread of holders in placings.

Allocation to the public subscription tranche

Under the new requirements, listing applicants (other than specialist technology companies) may choose between two distinct allocation mechanisms for the public subscription tranche in an IPO:

• Mechanism A adopts the following structure.

• Mechanism B provides for a fixed minimum allocation of 10% of the offer shares to the public subscription tranche (with a maximum allocation of up to 60%), without any clawback mechanism.

Ongoing public float related requirements

In parallel with the implementation of the revised initial public float regime, the Exchange has launched a further consultation to consider enhancements to the ongoing public float requirements. The consultation seeks market feedback on a range of proposals, including revised ongoing float thresholds, potential relaxations for certain categories of issuers and the introduction of new regulatory consequences in cases of significant public float shortfalls. The deadline for submitting comments on the proposed changes is 1 October 2025. The Exchange has indicated that it will publish a separate set of conclusions following the close of the consultation period.

Pending the outcome of this consultation, the existing ongoing public float requirements will continue to apply to all issuers. To ensure consistency and regulatory coherence, the Exchange has made transitional consequential amendments to the current rules so that they align with the newly adopted initial public float thresholds.

1. Conclusions and Further Consultation Paper on Proposals to Optimise IPO Price Discovery and Open Market Requirements