1 Consultation on Proposed Amendments to the Listing Rules relating to Initial Listing and Continuing Listing Eligibility and Cancellation of Listing Procedures

2 u To further enhance the quality of issuers listed on the Exchange u To update the requirements of the Main Board Rules to ensure that they are on a par with other leading markets Objectives

3 u Listing is an indicator of an issuer’s achievement, in terms of financial performance and investor acceptance u Listing on the Exchange signifies public recognition of an issuer having achieved a quality status u Cancellation of listing when an issuer fails to maintain financial performance and investor acceptance Key Principles

4 Areas of Review u Initial Listing Eligibility Criteria u Continuing Listing Eligibility Criteria u Continuing Obligations u Cancellation of Listing Procedures u Disclosure Requirements at the time of Initial Listing

5 Continuing Listing Eligibility Criteria u To provide an exit route to under- performing issuers u To ensure the overall quality of listed issuers through their listing on the Exchange u To provide an objective, transparent and fair means for the Exchange to review the appropriateness of the continuing listing of an issuer

6 Continuing Listing Eligibility Criteria u Financial Standards u Absolute Minimum Market Capitalisation u Insolvency u Total Disclaimer of Audit Opinion or Adverse Audit Opinion u Minimum Share Price u Reduction in Operating Assets and/or Level of Operations u Cash Companies u Prolonged Suspension u Paragraph 38 of Listing Agreement u Persistent Breaches of Main Board Listing Rules u Illegal Operation

7 Penny Stocks u Concerns on penny stocks

8 Penny Stocks Proposal u Minimum IPO issue price at HK$2 u Minimum share price at HK$0.50

9 Penny Stocks Proposal u No corporate action that will result in the theoretical value of an issuer’s shares falling below HK$0.50

10 Penny Stocks u Transitional period of 12 months

11 Cancellation of Listing Procedures u To replace the existing set of delisting procedures u To provide a fair, transparent and effective mechanism for delisting of under-performing issuers

12 Cancellation of Listing Procedures u To speed up the delisting process u To immediately delist issuers that have been served with a winding up order

13 THANK YOU!