Hong Kong stock exchange proposes easier rules for deals, spin-offs

Hong Kong Exchanges and Clearing (HKEX) announced on September 21 proposals to ease rules for large corporate deals and spin-offs in a bid to enhance Hong Kong's attractiveness as a listing destination. Under the proposed changes, shareholder approval for major acquisitions and sales would only be required if a transaction equates to 50% or more of a company's size, up from the current 25%.

HKEX's head of listing, Katherine Ng, stated that the reform aims to provide issuers with greater flexibility and certainty in their corporate transactions, while maintaining investor protections. Deals between 25% and 50% of a company's size would still require announcement but would no longer necessitate a shareholder vote or a detailed circular.

The threshold for transactions involving loans or other financial assistance, as well as securities and investments held for investment or cash management purposes, would remain at the current 25% level. HKEX also suggested increasing the ownership threshold for a subsidiary to be considered connected to a listed company to 30% from the present 10%.

For spin-offs, eligible main board companies would be able to self-assess compliance with HKEX rules, rather than seeking prior approval. Such companies must have a market value of at least HK$10 billion, annual revenue of at least HK$1 billion, and retain over half of group revenue and assets. The waiting period for a spin-off application would be reduced from three years to one year.

HKEX data indicated that $89.1 billion worth of equity listings and share sales had taken place in Hong Kong in 2026, a 47% increase from the previous year, with high technology companies accounting for 38% of the total. The consultation on the proposed changes closes on November 30, but the proposals are not yet finalized, according to HKEX.