The new IPO regulations of the Hong Kong Stock Exchange have been implemented, lowering the public shareholding threshold for A-shares listed in Hong Kong

On August 4th, the new regulations from the Hong Kong Stock Exchange regarding the optimization of initial public offering (IPO) market pricing and public market rules officially took effect. This marks a significant reform in the IPO pricing mechanism of the Hong Kong Stock Exchange after 27 years. Industry insiders generally believe that compared to the past, the Hong Kong Stock Exchange has set a minimum allocation requirement for the book-building placement portion, which helps enhance the participation of more bargaining-capable institutional investors in the new stock pricing process, thereby improving the efficiency of new stock pricing. "The book-building placement is similar to the offline inquiry placement in the A-share market, targeting anchor investors beyond cornerstone investors, with these anchor investors mainly being institutions. The allocation ratio for the book-building placement portion has been reduced from 50% during consultations to the current 40%, which helps expand the share of the public subscription portion, thereby increasing the participation opportunities for retail investors," said Shen Meng, director of Chang Chong Capital. "This regulation helps alleviate the pressure on companies to find anchor investors and improves the success rate of IPOs."