After careful consideration of all feedback, the Exchange has modified the proposal in the Consultation Paper and will adopt the following approach:
(a) a 60 per cent increase in the Profit Requirement and amend the profit spread;
- Under the Modified Profit Increase, the minimum amount of profit attributable to shareholders for a Main Board listing applicant will be
(i) $35 million in the most recent financial year; and
(ii) $45 million in aggregate in the two preceding financial years during a three-year trading record period, with an aggregate profit of $80 million.
(b) the implementation date of the Modified Profit Increase will be 1 January 2022; and
(c) providing flexibility by granting relief from the profit spread on case-specific circumstances.
In addition, the Exchange will continue to work with the SFC in combating the regulatory issues identified in the Consultation Conclusions through robust review of listing applications, and placing heightened scrutiny on cases displaying features as described in the Joint Statement. There will also be an increased emphasis on holding individuals accountable in relation to Listing Rule breaches, including those who participate in the problematic behaviour described in the Joint Statement.
The Exchange will also launch a review of GEM to consider, amongst other things, comments received regarding GEM’s positioning, market perception, and viability as an alternative to the Main Board.
