HKEX(HK:00388) 证券时报·2025-08-01 10:11Core Viewpoint - The Hong Kong Stock Exchange (HKEX) is implementing reforms to optimize the pricing and allocation mechanisms for initial public offerings (IPOs) to enhance its competitiveness and attract a diverse range of international investors [1][9]. Summary by Sections Changes in IPO Pricing and Allocation Mechanisms - The minimum allocation to the book-building portion is set at 40%, down from the previously suggested 50% [3]. - Two allocation mechanisms are introduced for new listings: - Mechanism A allows for a specified allocation percentage based on the oversubscription ratio, with maximum allocation percentages of 5%, 15%, 25%, and 35% for different oversubscription levels [2][4]. - Mechanism B allows issuers to pre-select an allocation percentage between 10% and 60%, with no backfilling mechanism [4]. - The maximum backfilling percentage under Mechanism A has been increased from 20% to 35% [4][11]. Initial Public Holding and Free Float Requirements - New minimum public holding and free float requirements are established for issuers at the time of listing, with thresholds varying based on the type of issuer and market capitalization [5][6]. - For single-class issuers not registered in mainland China, the initial public holding must be between 10% and 25%, with a free float of at least 10% and a market value of HKD 50 million [6]. - The new regulations will take effect on August 4, 2025, and will apply to all new listing applicants [7]. Rationale for Changes - The existing IPO pricing mechanism has not been updated in 27 years, despite significant changes in the market and investor landscape, necessitating a more flexible and transparent framework [9][10]. - The shift from a retail-dominated market to one where institutional investors account for nearly 90% of trading volume requires adjustments to ensure balanced allocation among different types of investors [9][10]. Ongoing Consultation on Public Holding Requirements - The HKEX is seeking further consultation on the continuous public holding requirements, aiming to introduce a tiered system based on market capitalization to provide clearer guidance for companies [13][14]. - The current requirement of 25% for continuous public holding is deemed inflexible, especially for larger companies, prompting the need for a more adaptable approach [13][14].