Amendments to the GEM Listing Rules

The Stock Exchange of Hong Kong Limited (the Exchange) implemented its reforms to the GEM Listing Rules on 1 January 2024.

For companies currently listed on GEM, one of the key changes is a new streamlined transfer mechanism, to enable eligible GEM issuers to transfer to the Main Board without the need to appoint a sponsor to carry out due diligence or produce a “prospectus-standard” listing document.

The qualifications for a streamlined transfer required for an eligible GEM issuer are detailed and are set out in Section III of Chapter 2 of the consultation conclusions. Key qualifications include:

• Meeting all qualifications for listing on the Main Board
• Having published its financial results for the three full financial years commencing after the date of listing on GEM
• Continuity of ownership and control and no fundamental change in the Company’s principal business for three full financial years immediately preceding the transfer application and until the commencement of dealings on the Main Board
• A minimum daily turnover and weighted average market capitalisation of HK$50,000 on at least 50% of the trading days over the 250 days immediately preceding the application and until the commencement of dealings on the Main Board
• A clean compliance record

Such simplified process should vastly reduce the time and cost of such a transfer, opening up access to the Main Board and its advantages to eligible GEM issuers.

Any transfer of listing of the shares of a Bermuda or Cayman incorporated GEM Issuer may only require board approval under the constitutional documents of a such Bermuda or Cayman Islands. If you are interested in discussing any of the Bermuda or Cayman Islands legal or practical aspects of the new streamlined transfer mechanism, please contact Richard Hall or your usual Conyers contact person.

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