CMA Australia Announces the Survey Feedback on the HKEX’s New Board Concept Paper, Consultation Paper on the Review of GEM and Changes to Listing Rules

HONG KONG, CHINA–(Marketwired – Aug 10, 2017) – On 1st August, 2017, The Institute of Certified Management Accountants (CMA) conducted 2 surveys, seeking the views of its members and other non-member professionals on the New Board Concept Paper (comprising New Board Pro and New Board Premium) and the Consultation Paper on the Review of the Growth Enterprise Market (GEM) and Changes to the GEM and Main Board Listing Rules issued by the HKEX.
Survey on the New Board Concept received 97 responses, and majority of respondents are in favour of the HKEX’s proposition to establish a New Board. It is believed that provisions under the New Board will attract and promote the listing of “new economy” companies, giving a positive boost to trading volumes in the future, ensuring that the HK stock market stays invigorated against the backdrop of rapid economic development. Providing more financing opportunities for “new economy” companies effectively creates economic drivers to further establish Hong Kong’s position as a global financial centre. 
Some of the members and non-member professionals responded that relaxing the listing requirements currently provided under New Board Pro would further enhance Hong Kong’s ability to attract companies from New Economy sectors. Other respondents expressed views over the possibility of lowering future investment thresholds as the current proposition is such that New Board Pro would be open to professional investors only, whilst New Board Premium would be open to retail investor participation. According to the 2016 Global Wealth Databook published by Credit Suisse, only an estimated 115,000 people in Hong Kong qualify as professional investors. Therefore, it is believed that relaxing such investment threshold would result in a more active New Board Pro.
The CMA received a total of 153 responses for the survey on the Review of the GEM and Changes to the GEM and Main Board Listing Rules. 


Listing Requirement

To increase cashflow requirement to HK$30 million
(Current requirement is HK$20 million)

To increase the minimum market capitalization requirement to HK$150 million
(Current requirement is HK$100 million)

To increase post-IPO lock-up requirement on controlling shareholders to 2 years
(Current requirement is 1 year)

To introduce a mandatory public offering mechanism of at least 10% of the total offer size for all GEM IPOs
(Currently up to 100% public offer)

GEM listing applications to be approved or rejected by Listing Committee
(Currently delegated to the Listing Department)

On GEM Transfer: 1. Remove the GEM Streamlined Process 2. Requirement to appoint a sponsor 3. Requirement to issue a “prospectus-standard” listing document(Current Requirement:1. GEM Streamlined Process 2. Appointment of sponsor not a requirement 3. GEM Transfer announcement only)


Main Board
Listing Requirement

To increase the minimum market capitalization requirement to HK$500 million
(Current requirement is HK$200 million)

To increase the minimum public float value HK$125 million (25%)
(Current requirement is HK$50 million (25%))

The majority of respondents agree to the HKEX’s proposed changes to the GEM Board Listing Rules, but it is worth noting the divided responses on the proposition to increase the minimum market capitalization requirement from HK$200 million to HK$500 million under the Main Board. Only 59% of respondents agree, whilst those who disagree believe this threshold is too high, and a threshold of around HK$300 million would better reflect market sentiments. 
On the results of the surveys published 8th August, our Chairman of the Board – Greater China, Dr. Dennis Tam expressed that the responses received from members and non-member professionals were in line with expectations, and he believes the New Board will further invigorate Hong Kong’s financial markets. As for the Main Board listing requirement to increase minimum market capitalization to HK$500 million, he cautioned that this could potentially deter companies with good potential from listing in Hong Kong, and the HKEX could benefit from reconsidering this threshold.
CMA Australia Honorary Chairman – Hong Kong, Prof. Anthony Wu was delighted by the enthusiastic responses of members and non-member professionals, and the survey results will be forwarded to Chief Executive of the HKEX, Mr. Charles Li soon. He also expressed that raising the requirements for the GEM Board benefits the market environment as a whole.
CMA Senior Vice President – Global, Prof. Allen Wong commented on the eager responses towards the surveys conducted by the institute on the New Board Concept Paper and the Consultation Paper on the Review of the Growth Enterprise Market (GEM) and Changes to the GEM and Main Board Listing Rules. He agrees with the results of the surveys, and would like to thank all CMA members and non-member professionals who participated in this exercise. CMA has always supported the government’s endeavours in public consultation, and he hopes the constructive survey results will be of value to the HKEX, and looks forward to participating in future consultation projects with the HKEX.
About CMA Australia
CMA Australia was officially incorporated in 1996 under the patronage of Mr William Dix (former Chairman of Ford and Qantas) and Professor John Miller (former Director of Consumer Affairs, Chairman of Pannell, Kerr, Foster and holder of numerous senior academic positions). Its objectives are to provide a professional organization for management accountants, and to encourage, disseminate and promote the management accounting specialisation across organizations. The Institute has 17 offices and branches in Australia and globally including Hong Kong, China, Macau, Malaysia, India, Indonesia, Lebanon, Papua New Guinea, Philippines, Sri Lanka, Europe, Dubai and Africa. These branches and centers serve as the hub for member services in the region, as well as cores for future development and discussion of the profession and servicing 5,000 members globally. The Hong Kong Branch was founded in 2009 with the mission to provide professional education for members and students to meet business needs in Hong Kong and Mainland China. Since the establishment of the Hong Kong office in 2009, CMA Australia has been working towards our goals to become a premier professional body for management accountants. We endeavour to offer a platform not only for members to gain technical knowledge but also to leverage on our strong network with various strategic partners.
Building on the foundation laid by the late Prof. Dr Dominic Wong GBS, OBE, JP, former Director of Education of Hong Kong Government and Life Honorary President of ICMA Hong Kong Office, Less than five years, we have expanded our membership base to over 1,500 senior executive members in Hong Kong. We are proud to have set up 30 committees. In addition, we are honoured to have four senior leaders to join our big family and we believe CMA Australia (Hong Kong Branch) will obtain prosperous development in coming years. Over the past 2 years, the Hong Kong Office has successfully conducted membership activities; arranged Masters and Doctorate degree program pathways for members; provided comments to relevant Government departments; enhanced relationships with other professional bodies and supported community service activities. We shall continue to enhance our brand in the business community and provide value-added services to our members.
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