Reverse Takeover Rules and Continuing Listing Criteria Listing Rules Update

The Hong Kong Stock Exchange (HKEX) published a consultation paper in June 2018 (the “Consultation Paper”) on Backdoor Listing (the RTO rules), Continuing Listing Criteria (Rule 13.24 and Cash Companies Rules) and Other Rule Amendments due to prevalence of backdoor listing activities in recent years.  The Consultation Paper sought to amend the RTO rules and continuing listing criteria in order to improve the regulation of shell activities in light of the concerns of speculative trading, market manipulation and insider trading. The Stock Exchange published the consultation conclusions in July 2019 whereby the RTO rules, Rule 13.24 and Cash Companies Rules will be amended with an effective date of 1 October 2019 (subject to transitional period).  This course would cover the major changes being made to the Listing Rules on RTO and continuing listing criteria.

Detailed Information

Highlights of the course include:

  • Introduction and background to RTO
  • New RTO rules
    • Bright line test
    • Principle based test – Codification of the 6 assessment factors
    • Classification of “extreme transactions”
    • Compliance requirements under RTO and extreme transactions
  • Amendments to continuing listing criteria
    • Cash company rules codified
    • Sufficiency of operations
  • Other regulatory measures against shell activities
    • Suitability for listing
    • Suitability for continued listing
    • Delisting
  • Case studies – Past listing decision references
  • Concerns and implications

Registration Conditions

To view our registration conditions click here.