by ZOU Wenrong

Hong Kong Exchanges and Clearing (HKEX) has proposed sweeping changes to its listing rules aimed at attracting innovative companies and facilitating listings by overseas issuers, including Chinese firms already traded in the United States, as competition among global financial centers intensifies.

On March 13, the Hong Kong Stock Exchange, a unit of HKEX, issued a consultation paper outlining 10 proposals to refine Hong Kong's listing regime. The consultation will run for eight weeks until May 8, 2026.

The proposals focus on three areas: revising rules for weighted voting rights (WVR) companies, facilitating listings by overseas issuers and refining IPO rules.

Katherine Ng, head of listing at HKEX, said during a media briefing that the reforms aim to enhance the diversity and global competitiveness of Hong Kong's listing regime while maintaining market quality.

Lower thresholds for weighted voting rights companies

One proposal would relax financial eligibility requirements for companies seeking to list with weighted voting rights structures, a regime introduced in 2018 to attract innovative companies to Hong Kong's stock market.

HKEX proposed lowering the market capitalization threshold under the Category A standard from HK$40 billion to HK$20 billion, while the Category B threshold would fall from HK$10 billion to HK$6 billion. The revenue requirement under Category B would also drop from HK$1 billion in the most recent financial year to HK$600 million.

Applicants with a market capitalization of HK$40 billion or above at the time of listing could also adopt a higher WVR ratio of 20:1.

Ng said the adjustments would not lower quality requirements, noting that the WVR market-cap threshold would remain above the minimum requirement for companies seeking a standard main-board listing.

HKEX also proposed broadening the definition of "innovative companies" eligible to adopt WVR structures, recognizing firms driven by business-model innovation as well as technological innovation.

Under the proposal, innovative companies would be categorized under two pathways: Path A for technology-driven innovation and Path B for business-model innovation.

For Path B companies, HKEX proposed introducing more objective criteria, such as compound annual growth of at least 30% and a leading industry position, to reduce subjectivity in approvals.

Easier listings for overseas companies

The consultation paper also proposes measures to facilitate listings by overseas issuers and simplify the conversion of secondary listings into primary listings in Hong Kong.

Several major Chinese technology companies listed in Hong Kong through secondary listings — including NetEase (09999.HK), JD.com (09618.HK) and Tencent Music Entertainment (01698.HK) — remain outside the Stock Connect trading program, which allows mainland investors to trade Hong Kong-listed shares.

Under existing rules, some firms cannot convert to dual primary listings in Hong Kong because their weighted voting rights ratios exceed 10:1. If the proposed rule changes are adopted, such companies could become eligible to convert to dual primary listings, potentially removing the "-S" designation from their stock names.

Confidential IPO filings to be expanded

Another proposal would expand confidential filing arrangements for IPO applications to all companies.

HKEX said the move would give potential issuers greater flexibility and bring Hong Kong closer to international markets such as the United States, United Kingdom and Singapore, where confidential filings are already permitted.

Companies would be allowed to submit listing applications confidentially, though once a firm passes the listing hearing it must publish its post-hearing information pack (PHIP) to ensure investor transparency.

HKEX also proposed expanding disclosure requirements under the mechanism for publishing details of returned listing applications. The reform would extend disclosure beyond sponsors to include all professional parties involved in preparing listing documents.

CHEN Yang, an executive director at China Merchants Securities International, said expanding confidential filings could help companies avoid early disclosure risks but may reduce marketing opportunities during the pre-IPO process.

"If an application remains confidential, some investors may not hear about the deal unless their banks are directly involved," Chen told Jiemian News.

The proposal would mark the third major overhaul of Hong Kong's listing regime since 2018, when the exchange first allowed companies with weighted voting rights to go public. Further reforms in 2023, including listing chapters 18A and 18C, introduced tailored rules for biotechnology and advanced technology companies.

Compared with earlier reforms, Ng said the latest proposals have a broader scope, reflecting demand from different market participants, including companies from Southeast Asia seeking listings in Hong Kong.

Separately, analysts at SPD Bank International estimate that about HK$1.6 trillion worth of restricted shares could be unlocked in Hong Kong's stock market in 2026, with more than HK$100 billion scheduled for release in six months this year. September could see the largest single-month unlocking, exceeding HK$530 billion, or about 32.6% of the annual total.