港交所探索将GEM创业板并入主板，拟设18D新章节，年底前公开咨询

Bourse operator Hong Kong Exchanges and Clearing (HKEX) is exploring merging the GEM board with its main board by creating a new chapter of its listing rules, according to a source familiar with the discussions. The proposal to create Chapter 18D, which would be a core part of the second phase of the review of the listing regime, would be subject to a public consultation by the end of the year, the source told the South China Morning Post. Merging it with the main board was an option to reboot the poorly performing GEM, the source said, as the second board was seeing minimal turnover and fewer new listings. “There have been studies on reforming the GEM for a long time, as the second board did not really work well in terms of allowing smaller-sized companies to list,” the source said. “Allowing these smaller players to list in a specific chapter ... may be a better option,” the source said. Since its 2018 reform, HKEX has introduced new specific chapters of listing rules, tailored to different companies’ needs, for firms that could not meet general requirements. The chapters include 18A, for pre-revenue biotechnology, 18B for special purpose acquisition companies and 18C for large technology companies without revenue. The proposal for a Chapter 18D would allow newly established, small-sized companies that could not meet the profit requirement to list, the source said. The existing 300 or so firms on GEM may be grandfathered in to join the main board under the new chapter. “The new chapter to replace the GEM would widen the scope of the listed companies at the HKEX, while it would also help the smaller firms to get funding. The reform would help to improve the overall market diversity and also benefit the real economy,” the source said. A spokesman for HKEX said the exchange was exploring further new measures related to its listing regime. “HKEX is pleased to have implemented the first phase of the listing framework competitiveness review, which drew strong market support and enhanced Hong Kong’s attractiveness as a premier fundraising destination,” the spokesman said in a statement. “Building on this progress, we will continue to explore additional measures to strengthen the attractiveness of our listing framework to ensure it remains fit for purpose, and will share updates as appropriate in due course,” he said. GEM, formerly known as the Growth Enterprise Market, was established in 1999. GEM does not have a profit requirement, while the main board requires a company to make at least HK$80 million in the three years before its listing. As of Thursday, GEM had 306 firms with a combined market capitalisation of HK$78 billion (US$9.9 billion). The main board has 2,455 companies with a market capitalisation of HK$47.05 trillion. On Thursday morning, the GEM had HK$47 million (US$6 million) of turnover as of 11.30am, representing only 0.4 per cent of the main board turnover at HK$112.76 billion.