Secondary Listings in Hong Kong



Overseas issuers that have (i) a primary listing on a Recognised Stock Exchange; and (ii) the majority of their equity securities traded outside Hong Kong may apply for a “secondary” listing on the Main Board of the Exchange. Secondary listings, that are usually subject to less stringent regulation by the Exchange than primary listings, are principally regulated by the rules and authorities of the jurisdiction where they are primary listed.

The key requirements that apply to a secondary listing are summarised below:

	Without weighted voting rights (“WVR”)		With WVR
Stock Exchange of Primary Listing	Recognised Stock Exchanges^{Note 3}	Qualifying Exchanges^Note 2	*Qualifying Exchanges()** ^Note 2
Centre of Gravity in Greater China ^{Note 1}	Generally Prohibited(**)	Permitted	Permitted
"Innovative Company" Requirement	Not Required		Required ^{Note 4}
Minimum Market Capitalisation at Listing	HK$ 3 billion	HK$ 3 billion	HK$40 billion or HK$10 billion and revenue of at least HK$1 billion for the most recent audited financial year
Minimum Track Record on Primary Exchange	5 years of listing with good compliance record (***)	5 years of listing with good compliance record (*) (or 2 years of listing with good compliance record if its market capitalisation has at least HK$ 10 billion at the time of Listing) (*)	2 years of listing with good compliance record
Remarks: * To secondary list on the Exchange with WVR structure, it must be an issuer with a primary listing on the Qualifying Exchanges ^{Note 2}. Applications for secondary listing from issuers with a centre of gravity in Greater China ^{Note 1} and without a WVR structure that are primary listed on a Recognised Stock Exchange other than a Qualifying Exchange ^{Note 2} may be considered in exceptional circumstances on the basis of the issuer’s individual circumstances and the merits of the case. *A waiver of such listing track record criteria may be granted if the applicant seeking a secondary listing is well-established and has a market capitalisation at listing that is significantly larger than HK$10 billion.

Overseas issuers must also demonstrate how the domestic laws, rules and regulations to which they are subject, and their constitutional documents, in combination, provide the core shareholder protection standards^{Note 5}. For this purpose, the Exchange may require an overseas issuer seeking a secondary listing to amend its constitutional documents to provide for the core shareholder protection standards (see also Chapter 2.1 of the Guide for New Listing Applicants (the “Guide”)).

Waivers and exemptions for secondary listings

Unlike issuers primary listed on the Exchange, secondary listings are principally regulated by the rules and authorities of the jurisdiction where they are primary listed and the dominant market of their securities are also on that overseas primary exchange. On this basis, the Exchange exempts or waives certain requirements of the Listing Rules for issuers with, or seeking, a secondary listing.

Automatic waivers

Automatic waivers from full compliance with certain Listing Rules are available to secondary listing issuers. Such secondary listing issuers are not required to apply to the Exchange for these waivers which are granted automatically^{Note 6}.

For certain Listing Rules, the effect of the automatic waiver is limited to the particular circumstances described (e.g. issues of securities outside the Exchange’s markets). Nonetheless, a number of Listing Rules which the investing public in Hong Kong may be familiar with and would otherwise apply in the case of a primary or dual-primary listing on the Exchange are waived in their entirety primarily on the basis that reliance can be placed on the regulations of the exchanges where these secondary listed issuers are primary listed. The Listing Rules automatically waived include but are not limited to:

	compliance with the Model Code for Securities Transactions by Directors of Listed Issuers;
	establishment of audit committee and remuneration committee;
	appointment of company secretary with the requisite qualifications or experience;
	compliance with the reporting, announcement, circular, shareholders’ approval, annual report (where applicable) with respect to notifiable transactions and connected transactions;
	compliance with the Corporate Governance Code;
	content requirements for annual and interim reports;
	publication of environmental, social and governance report; and
	certain continuing disclosure requirements (such as next day return, advance to an entity, financial assistance and guarantees to affiliated companies, pledging of shares by controlling shareholder, loan agreements with covenants relating to specific performance of controlling shareholder and breach of loan agreement).

Common waivers and specific waivers

Secondary listed issuers may also apply to the Exchange for the common waivers from compliance with certain Listing Rules^{Note 7} as well as waivers from compliance with other Listing Rules based on their specific circumstances. These waivers are not automatically granted and the Exchange will consider such applications on a case-by-case basis with reference to the individual merits and in light of all relevant facts and circumstances.

Non-compliant WVR and/ or contractual arrangements ^{Note 8}

Subject to the satisfaction of the “Innovative Company” Requirement ^{Note 4}, Grandfathered Greater China Issuers ^{Note 9} and Non-Greater China Issuers ^{Note 10} are allowed to secondary list with their existing WVR structures without full compliance with the safeguards in respect of WVR ^{Note 11}. This would mean that a Grandfathered Greater China Issuer ^{Note 9} or a Non-Greater China Issuer ^{Note 10} with a WVR structure may not be subject to Hong Kong WVR safeguards, such as the restriction not to increase the number or proportion of WVR shares after the date of listing; nor will it be required to comply with the requirement for certain resolutions to be subject to voting on a one vote per share basis. However, those allowed to adopt non-compliant WVR Structures are still required to comply with the disclosure requirements in the Listing Rules ^{Note 12}.

The Exchange would like to emphasise that it reserves the right, in its absolute discretion, to refuse a listing of securities of an overseas issuer, for example, if its WVR structure represents an extreme case of non-conformance with corporate governance norms.

Further, certain overseas issuers adopt contractual arrangements whereby such overseas issuers and their subsidiaries do not have direct ownership of the operating companies or the operating licenses and rely on contractual arrangements to control them. Grandfathered Greater China Issuers ^{Note 9} and Non-Greater China Issuers ^{Note 10} are allowed to secondary list with their existing contractual arrangements in place without full compliance with Chapter 4.1 “Contractual Arrangements” of the Guide.

This would mean that a Grandfathered Greater China Issuer ^{Note 9} or a Non-Greater China Issuer ^{Note 10} with contractual arrangements may not be subject to the Exchange’s requirements with respect to contractual arrangements, so they may not be “narrowly tailored” to achieve those issuers’ business purpose and may not minimise potential for conflict with the relevant local laws and regulations. However, those allowed to adopt non-compliant contractual arrangements are still required to comply with the disclosure requirements set out in Chapter 4.1 “Contractual Arrangements” of the Guide.

All issuers with contractual arrangements must monitor any changes in the relevant local laws and regulations and ensure compliance.

Non-Grandfathered Greater China Issuers ^{Note 13} that have a secondary listing on the Exchange must, unless otherwise waived, comply with the Exchange’s requirements set out in Chapter 4.1 “Contractual Arrangements” of the Guide and the WVR safeguards under the Listing Rules (where applicable) ^{Note 14}.

You may also refer to this diagram for the requirements applicable to overseas issuers seeking to list with contractual arrangement.

Company Information Sheets

All secondary listed issuers must disclose the following information in a Company Information Sheet for publication on the designated page of the HKEX website and the overseas issuer’s website.


(a)	a summary of the waivers and exemptions that have been granted to the issuer;
(b)	a summary of the provisions in the laws and regulations in its home jurisdiction and primary market that are different from those required by Hong Kong laws regarding:
	(i)	the rights of holders of its securities and how they can exercise their rights;
	(ii)	directors’ powers and investor protection; and
	(iii)	the circumstances under which its minority shareholders may be bought out or may be required to be bought out after a successful takeover or share repurchase;
(c)	details of withholding tax on distributable entitlements or any other tax that is payable by shareholders (e.g. capital gains tax, inheritance or gift taxes) and whether Hong Kong investors have any tax reporting obligations; and
(d)	where an overseas issuer is listing depositary receipts, a summary of the terms and conditions in the depositary agreement and deed poll.

Stock marker “S”

Due to the automatic waivers and other concessions available to secondary listings, secondary listed issuers will not be subject to certain provisions of the Listing Rules (see the “Waivers and exemptions for secondary listings” section).

Secondary listings may also be subject to other risks such as significantly fluctuating trading prices as a result of the failure to develop or sustain an active trading market for the securities on the Exchange and/or ineffective liquidity arrangements.

Accordingly, the Exchange requires all secondary listed issuers to be prominently identified through a unique stock marker “S” at the end of their stock name to help Hong Kong investors to differentiate them from other listed issuers.

Change of listing status from secondary listing to dual-primary or primary listing

Overseas issuers that have a secondary listing on the Exchange should refer to HKEX Guidance Letter GL112-22 for issues relating to (i) the migration of the majority of trading in their listed shares to the Exchange’s markets ^{Note 15}, (ii) voluntary conversion to dual-primary listing on the Exchange, and (iii) de-listing (voluntary or involuntary) of their shares or depositary receipts issued on their shares from the Recognised Stock Exchange on which they are primary listed ^{Note 16}.

You may also refer to HKEX Guidance Letter GL112-22 for a diagram of the requirements in the event of a change of listing status from secondary listing to dual-primary or primary listing.

Notes____________________________________________________________________________________________________

1.	MB Rule 1.01 sets out the factors to determine whether an issuer has a “centre of gravity in Greater China”.
2.	“Qualifying Issuers” refer to The New York Stock Exchange LLC, Nasdaq Stock Market or the Main Market of the London Stock Exchange plc (and belonging to the UK Financial Conduct Authority’s “Premium Listing” segment).
3.	See “List of Recognised Stock Exchanges”
4.	See Chapter 2.2 “Companies with Weighted Voting Rights Structures” of the Guide.
5.	See MB Appendix A1/GEM Appendix A1.
6.	See MB Rule 19C.11.
7.	See MB Rule 19C.11B.
8.	“WVR structure” refers to a structure of an issuer that results in any shareholder having “weighted voting rights” where the voting power attached to a share of a particular class that is greater or superior to the voting power attached to an ordinary share, or other governance right or arrangement disproportionate to the beneficiary’s economic interest in the equity securities of the issuer.
9.	“Grandfathered Greater China Issuer” refers to a Greater China Issuer that was: (a) primary listed on a Qualifying Exchange on or before 15 December 2017; or (b) primary listed on a Qualifying Exchange after 15 December 2017, but on or before 30 October 2020 and controlled by corporate WVR beneficiaries as at 30 October 2020.
10.	“Non-Greater China Issuer” refers to an overseas issuer primary listed on a Qualifying Exchange (i.e. Qualifying Issuer) that is not a “Greater China Issuer”. “Greater China Issuer” refers to a Qualifying Issuer with its centre of gravity in Greater China. Also see Notes 1 and 2 above.
11.	See Rule 8A.46(b).
12.	See MB Rules 8A.37 to 8A.42.
13.	“Non-Grandfathered Greater China Issuer” refers to a Greater China Issuer that is not a Grandfathered Greater China Issuer.
14.	See Chapter 8A of the MB Rules.
15.	See MB Rule 19C.13.
16.	See MB Rule 19C.13A.

This is a general guide to highlight some basic facts and characteristics of investing in securities of secondary listed issuers. HKEX and/or its subsidiaries endeavor to ensure the accuracy and reliability of the information provided, but do not guarantee its accuracy and accept no liability (whether in tort or contract or otherwise) for any loss or damage arising from any inaccuracies or omissions.

If investors require further information for investing in secondary listed issuers, they should refer to the issuer’s listing documents and corporate communications on the HKEXnews website (http://www.hkexnews.hk), the issuer's Company Information Sheet (if published) and consult their professional advisors prior to making any decision.