HK tightens rules on backdoor listings

Hong Kong’s securities regulator and stock exchange have announced changes to how they will combat backdoor listings, a tactic used by companies that might not otherwise qualify to list. The new rules will go into effect on October 1 and target changes in de facto control of listed companies or large-scale issuance of shares that result in such changes. 

The amendments will expand the listings regime’s test for control and de facto control to include both changes in an issuer’s controlling shareholder as well as changes in the single largest shareholder able to exercise effective control. 

The changes to Hong Kong’s listings rules come as HKEX seeks to shore up its reputation in the wake of a listings scandal and ongoing investigation into a top former employee for suspected corruption and misconduct in public office “in relation to the vetting of listing applications” of two listed companies. Read more on SCMP

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