LE Paper 1 · Topic 8
Topic 8 is where the numbers live: listing tests, public float tiers, appointment deadlines, lock-up periods, transaction bands, the 30% and 2% takeover triggers, and the cooling-off and licensing rules for SFC-authorised and virtual asset products. Most questions give you a company, a shareholder or a product and ask you to apply a threshold. Learn the figures below exactly and know which rule book each one comes from.
10 min read7 sections
Checked October 2026 against: HKEX Main Board and GEM Listing Rules (consolidated rulebooks, including the public float amendments of 4 August 2025 and 1 January 2026); SFC Code of Conduct (Dec 2025 edition) para 21; Securities and Futures (Price Stabilizing) Rules Cap. 571W and SFO Cap. 571 s.103-105 (HKLII); Codes on Takeovers and Mergers and Share Buy-backs (SFC); SFC Handbook (Oct 2024), REIT Code and SFC Code on MPF Products; AMLO Cap. 615 Part 5B; SFC Guidelines for Virtual Asset Trading Platform Operators and SFC virtual asset webpages. Independent prep, not endorsed by HKSI Institute or the SFC.
The Stock Exchange of Hong Kong is the front-line listing regulator, with the SFC behind it. Main Board Rule 2.03 says the Listing Rules aim to ensure that applicants are suitable, issues are marketed fairly with enough information, investors are kept informed, all holders are treated fairly and equally, directors act for shareholders as a whole, and new equity is offered first to existing shareholders unless they agree otherwise.
| Point | Main Board | GEM |
|---|---|---|
| Positioning | Larger, established companies | Small and mid-sized companies, higher investment risk (GEM 2.12) |
| Trading record | At least 3 financial years (8.05) | At least 2 financial years (GEM 11.12A) |
| Minimum market capitalisation | HK$500 million (8.09(2)) | HK$150 million (GEM 11.23(6)); HK$250 million under the R&D test |
| Cancellation after continuous suspension | 18 months (6.01A) | 12 months (GEM 9.14A) |
Trap: GEM is not a professional-investors-only market. It carries risk warnings, but anyone can trade it, and a GEM applicant still needs a sponsor.
Takeaway: Listing Rules protect process, disclosure and equal treatment, not returns. GEM: two years and HK$150 million; Main Board: three years and HK$500 million.
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Rule 8.05 gives three financial tests. Every test needs a three-year trading record, management continuity for three years and ownership continuity and control for the latest audited year.
| Test | Market capitalisation | Other figures |
|---|---|---|
| Profit (8.05(1)) | HK$500 million (8.09(2)) | Profit HK$35m latest year and HK$45m for the two years before |
| Market cap / revenue / cash flow (8.05(2)) | HK$2 billion | Revenue HK$500m latest year; operating cash flow HK$100m over three years |
| Market cap / revenue (8.05(3)) | HK$4 billion | Revenue HK$500m latest year; shorter record possible under 8.05A |
The open market rules changed in 2025-26. At listing, Rule 8.08(1) (from 4 August 2025) requires 25% public float for a class worth up to HK$6 billion; for HK$6-30 billion the higher of 15% or a public holding worth HK$1.5 billion; above HK$30 billion the higher of 10% or HK$4.5 billion. There must be at least 300 shareholders, and the three largest public holders may own no more than 50% of the public shares (8.08(2)-(3)). After listing, Rule 13.32B (from 1 January 2026) accepts either the initial percentage or an Alternative Threshold of HK$1 billion in public hands plus at least 10%.
Trap: Adding the three profit years to HK$80 million. The test has two limbs, and HK$42 million in the first two years fails even with a strong third year.
Takeaway: Profit test is 35 plus 45. Without profit, HK$2 billion needs HK$100 million cash flow; HK$4 billion needs none.
