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Requirements for an offering and listing in the U.K., U.S. or Hong Kong

Requirements for an offering and listing in the U.K., U.S. or Hong Kong

United Kingdom United States Hong Kong
Premium Listing Standard Listing
Listing Requirements:
  • Minimum market capitalisation £700,000
  • Need free float of at least 25% of the listed securities (in public hands in the EEA)
  • Adhere to the UKLA’s two Listing Principles (including maintenance of adequate procedures and internal controls to enable it to comply with its listing obligations) and six Premium Listing Principles
  • Comply with the U.K. Corporate Governance Code or explain any instances of non-compliance
  • Provide pre-emption rights equivalent to those in the U.K. Companies Act 2006
  • At least 75% of the applicant’s business is supported by a three year historic earning revenue (subject to exceptions for certain “specialist” issuers such as mineral companies)
  • Must be carrying on an independent business as its main activity (see “Controlling Shareholders” below)
  • The shares must be freely transferable (subject only to lock-ups, etc.)
  • The shares must be eligible for electronic settlement
  • Minimum market capitalisation £700,000
  • Need free float of at least 25% of the listed securities (in public hands in the EEA) – for DRs, this is assessed by reference to the portion of share capital represented by DRs rather than the total share capital
  • Adhere to the UKLA’s two Listing Principles (including maintenance of adequate procedures and internal controls to enable it to comply with its listing obligations)
  • Not subject to the U.K. Corporate Governance Code
  • The securities must be freely transferable (subject only to lock-ups, etc.)
  • For DRs, the listing amount represents no more than the total amount of issued share capital (usually “up to” listing of amount to give headroom for future issuances)
  • Minimum quantitative requirements, which vary depending on expected size and structure of the transaction (no public float requirements, although distribution requirements will need to be met)
  • Qualitative requirements, including adherence to minimum shareholder meeting/annual report requirements, public disclosure requirements and corporate governance requirements of the listing rules. The principal corporate governance requirements applicable to a non-U.S. company listed on NYSE are:
  • to disclose (in English, in its Annual Report on Form 20-F) any significant differences between the Company’s corporate governance practices and those required of U.S. companies listed on NYSE
  • to have an audit committee that satisfies the independence and responsibility requirements established pursuant to the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), discussed below
  • to have an independent compensation committee (although foreign private issuers are allowed to follow local requirements)
  • to notify NYSE of any material non-compliance with the provisions of any NYSE corporate governance standards that do apply to the Company
  • Meet one of three financial criteria: the profit test5; the market capitalisation/revenue test6; or the market capitalisation/revenue/ cashflow test7
  • Have a trading record of at least three financial years and management continuity for at least the three pervious financial years under substantially the same management
  • Have ownership continuity and control for at least the most recent audited financial year
  • Has a market capitalisation of at least HK$200 million at the time of listing
  • Maintain at all times a minimum public float of 25% of the Company’s total issued share capital8
  • Shares of at least HK$50 million held by the public at the time of listing
  • Have a minimum of 300 shareholders
  • No more than 50% of the securities comprising the public float at the time of listing can be owned by the three largest public shareholders
  • The public tranche must be fully underwritten
  • In the event of over-subscription, there have to be specific restrictions on the basis of allocation within the public subscription tranche and the claw back mechanism between the placing tranche and the public subscription tranche

5 Profits of HK$50 million in the last three years (with HK$20 million in the most recent year and an aggregate of HK$30 million in the preceding two years); and market capitalisation of at least HK$200 million at the time of listing.

6 Market capitalisation of at least HK$4 billion at the time of listing; and revenue of at least HK$500 million for the most recent audited financial year.

7 Market capitalisation of at least HK$2 billion at the time of listing; revenue of at least HK$500 million for the most recent audited financial year; and positive cashflow from operating activities of at least HK$100 million in aggregate for the preceding three financial years.

8 This may be lowered to 15% to 25% if the Company’s market capitalisation exceeds HK$10 billion.

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Posted on

2014-09-16