Exchange Implements IPO “Double Dipping” Reforms

The SEHK has implemented reforms to allow for “double dipping” in IPOs under specific conditions, which will have immediate effect. The new exemption aims to enhance the IPO price discovery process by encouraging greater participation from independent investors. The exemption permits existing shareholders and cornerstone investors of a new applicant to subscribe for or purchase additional securities in an IPO, as long as certain size-based conditions are met. The objective is to ensure a robust IPO price discovery process that accurately reflects market opinion, aiming to strike a balance between market facilitation and investor protection.

Guidance letter: https://en-rules.hkex.com.hk/sites/default/files/net_file_store/gl8516.pdf

Resource: https://www.hkex.com.hk/News/Regulatory-Announcements/2023/2311212news?sc_lang=en

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