Hong Kong Exchanges and Clearing (HKEX), which recently reclaimed the crown as the world’s largest market for new listings, announced new rules on Friday to reduce the public float requirement for initial public offerings (IPOs), reports the South China Morning Post. The new rules lower the barrier to raise capital for companies that are already listed in mainland China. Starting Monday, the minimum float of mainland companies in Hong Kong will be set at HK$3 billion ($386 million), or 10% of their outstanding capital, down from the current 15%.
For smaller companies, the requirement will be adjusted to between 5% and 25%, depending on their market value, HKEX said in a statement on Friday after a three-month consultation period that received 1,253 responses.
“It is crucial that we continue to evolve our listing framework so that it remains globally competitive and fit for purpose, ensuring that we benchmark ourselves favourably against international standards to appeal to the world’s next generation of leading companies,” said HKEX’s head of listing Katherine Ng in a statement announcing the exchange’s decision.