Corporate finance and equity capital markets
What this domain tests
This domain tests the IPO and placing workflow in Hong Kong: who does what, which rulebook applies, how allocations and clawback work, and when the Takeovers Code is triggered.
Core rules
- Listing is governed by the HKEX Listing Rules (Main Board and GEM). A sponsor must be formally engaged at least two months before the listing application (Form A1) is filed and must perform reasonable due diligence.
- The SFC regulates sponsors and Type 6 advisers through the Corporate Finance Adviser Code of Conduct and the Sponsor Guidelines, and vets listing applications through the SFC/HKEX dual filing regime. A prospectus must be authorised and registered before issue.
- Main Board clawback (where the initial public offer tranche is 10%): oversubscription of 15x–50x lifts the public tranche to 30%; 50x–100x to 40%; 100x or more to 50%.
- Under the Takeovers Code, acquiring 30% or more voting rights triggers a mandatory general offer; a holder between 30% and 50% may add up to 2% in 12 months without triggering.
- Inside information must be kept confidential and managed with wall-crossing records until disclosure.
Worked example
An issuer offers 10% of shares to the public and is 60 times oversubscribed. 60x falls in the 50x–100x band, so the public tranche must be increased to 40% and the placing scaled back accordingly. If the same deal were only 12 times covered, no clawback applies.
Traps that cost marks
Confusing the 30% mandatory-offer threshold with the 5% disclosure-of-interests notification; assuming cornerstone investors may receive guaranteed discounted allocations without disclosure; and treating the two-month sponsor engagement as a formality rather than a Listing Rule requirement.