Pricing flexibility and placing tranche reallocation guidance issued

Guidance Letters issued on Pricing Flexibility for IPOs and Placing Tranche Reallocation in IPOs

On 2 February 2018, the Stock Exchange of Hong Kong Limited (the Exchange) issued Guidance Letter HKEX-GL-90-18 on pricing flexibility for initial public offerings (IPOs) and Guidance Letter HKEX-GL-91-18 on placing tranche reallocation in IPOs.

Guidance Letter HKEX-GL-90-18 introduces a mechanism that will facilitate determination of the optimal price of the IPO by offering more flexibility for pricing the shares (Pricing Flexibility Mechanism), and Guidance Letter HKEX-GL-91-18 introduces a new set of conditions under which listing applicants can move shares from the placing to the public subscription tranche.