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HKSI Paper 5 study materials
HKSI Paper 5 study resources

HKSI Paper 5: Listing Rules

HKSI Paper 5 · Work through your exam, one topic at a time.

All guide sections

Listing Rules

This domain tests whether you can locate the right chapter and apply the numerical eligibility tests without slipping on denominators or continuity periods.

The rulebook

  • Main Board Rules and GEM Rules are separate sets. GEM is a stepping-stone market with lower thresholds and a streamlined process.
  • Key chapters: 4 (accountants' report), 8 (eligibility), 8A (weighted voting rights), 9 to 12 (application, prospectus and listing documents), 13 (continuing obligations), 14 (notifiable transactions), 14A (connected transactions), 17 (share schemes), 18A (biotechnology), 18C (specialist technology).

Eligibility: Rule 8.05 profit test

  • Trading record of at least three financial years.
  • Aggregate profit of at least HK$80 million: HK$35 million in the most recent year and HK$45 million across the two preceding years (raised with effect from 1 January 2022).
  • Market capitalisation of at least HK$500 million at listing.
  • Alternative tests exist: market capitalisation with revenue, and market capitalisation with cash flow.

Other core requirements

  • Management continuity for three years and ownership continuity for the most recent audited financial year (Rule 8.05(1)(b) and (c)).
  • Accountants' report covering the three financial years (Rule 4.04).
  • Public float of at least 25% of issued shares, reduced to a 15% to 25% band where market capitalisation at listing exceeds HK$10 billion; and no more than 50% of the public float may be beneficially owned by the three largest public shareholders (Rule 8.08).
  • Suitability: Rule 8.04 gives the Exchange an overriding discretion to refuse an applicant even if every numerical test is met.

Worked example

An applicant has HK$35 million profit in the latest year and HK$40 million across the two preceding years, and expects a market capitalisation of HK$900 million. It fails the profit test, because the preceding two years must total HK$45 million, not HK$40 million. Its HK$900 million market capitalisation clears the HK$500 million requirement but does not cure the profit shortfall. It would need to consider one of the alternative tests in Rule 8.05(2) or (3).

Traps that cost marks

  • Using a consolidated total without checking the split between the latest year and the two preceding years.
  • Forgetting that ownership continuity is measured over the most recent audited year, not the full three years.
  • Missing the 50% cap on the three largest public shareholders.
  • Treating Rule 8.05 as the whole test and ignoring Rule 8.04 suitability.