Hong Kong exchange amends float rules to strengthen city's status as global finance hub

Core Viewpoint - Hong Kong Exchanges and Clearing (HKEX) has revised its post-listing public float rules to enhance capital management flexibility for companies while improving market transparency [1][3]. Group 1: New Public Float Rules - Listed companies can now meet an alternative ongoing public float threshold of at least 10% of issued shares with a market value exceeding HK$1 billion (approximately US$128.5 million) [1][2]. - For mainland China-listed firms, their Hong Kong shares must represent at least 5% of total issued shares or have a market value of at least HK$1 billion [2]. Group 2: Implementation and Impact - The new requirements will take effect on January 1, 2026, following a two-month consultation that garnered 43 responses [3]. - Current regulations require issuers to maintain at least 25% of their issued shares held by the public, with a potential lower float of 15% to 25% for companies with a market capitalization above HK$10 billion at listing [4]. Group 3: Market Liquidity and Competitiveness - The reforms are anticipated to enhance market liquidity and attract high-quality companies, thereby strengthening the competitiveness of Hong Kong's capital markets [5]. - The tiered public float structure is expected to provide issuers with greater flexibility, supporting large-cap companies and A+H share listings in Hong Kong [6]. - Companies will be able to adjust their equity structures more efficiently in response to market conditions, offering much-needed flexibility in capital management [7].