Listing of innovative companies with weighted voting rights (WVR) has been the subject of much controversy since the Hong Kong Stock Exchange ("Exchange") put forward the WVR Concept Paper in August 2014. After two separate rounds of consultation, the Exchange announced its decision to expand the Main Board regime, rather than creating a new board, to allow:
- listing of WVR companies from emerging and innovative sectors, subject to additional disclosure and safeguards;
- listing of pre-profit/pre-revenue companies from biotech industry; and
- secondary listing of overseas companies with “centre of gravity” in Greater China.
To put the proposals into effect, the Exchange is in the process of drafting the proposed amendments to the Main Board Listing Rules ("Listing Rules") with a view to proceed with the formal consultation on the proposed Rule amendments in the first quarter of 2018.
In this article, we will discuss the Exchange's various proposals as set out in the Consultation Conclusions to the New Board Concept Paper.