HKEX Explores Merging GEM Board with Main Board in Major Restructuring
SCMP · 2 SOURCESabout 3 hours ago2 MIN
Summary
Hong Kong Exchanges and Clearing (HKEX) is exploring a major restructuring that would merge its underperforming Growth Enterprise Market (GEM) board with the main board by introducing a new Chapter 18D in its listing rules . The proposal, a key component of the second phase of the listing regime review, would be subject to public consultation by the end of the year, according to a source familiar with the discussions . Approximately 300 companies currently listed on GEM would be grandfathered onto the main board under the proposed new chapter .
Key Points
- HKEX is creating Chapter 18D as part of phase two of the listing framework competitiveness review
- The new chapter would allow small companies unable to meet profit requirements to list on the exchange
- GEM has experienced minimal turnover and declining new listings since its inception
- Existing GEM companies, numbering around 300, could transition to the main board under grandfathering provisions
- The reform follows previous successful chapters: 18A for pre-revenue biotech, 18B for SPACs, and 18C for large tech companies
Why It Matters
The proposed merger represents the most significant structural change to Hong Kong's stock market since the 2018 listing reforms and could revitalize opportunities for smaller companies seeking public capital . Market observers say the consolidation would improve market diversity while providing funding pathways for enterprises that have struggled to access public markets through the existing GEM framework .
The proposed merger represents the most significant structural change to Hong Kong's stock market since the 2018 listing reforms and could revitalize opportunities for smaller companies seeking public capital . Market observers say the consolidation would improve market diversity while providing funding pathways for enterprises that have struggled to access public markets through the existing GEM framework .