Hong Kong Stock Exchange Implements Reforms to Relax IPO "Double Dipping" Restrictions

The Stock Exchange of Hong Kong Limited ("HKEx") introduced a new exemption allowing existing shareholders and cornerstone investors to subscribe for or purchase further securities in an IPO (i.e., to "double dip") under certain specified conditions.

"Double dipping" refers to a subscription for, or purchase of further securities by, an existing shareholder or a cornerstone investor of a listing applicant in its IPO, which is prohibited under the Hong Kong Listing Rules unless one of the exemptions applies. The HKEx recently introduced a new exemption that allows double dipping with effect from November 21, 2023.  

Double dipping will be permitted if an IPO meets the following conditions (the "Size Exemption Conditions") at the time of the applicant's listing: 

  • The offer, excluding any overallocation, has a total value of at least HK$1 billion;
  • The allocation to all existing shareholders and their close associates, whether as cornerstone investors and/or placees, as permitted under this exemption does not exceed 30% of the total number of securities offered; and
  • Each director, chief executive, controlling shareholder, and (in the case of PRC issuers only) supervisor of the listing applicant has confirmed that the offered securities are not allocated to them or their close associates under the exemption. 

In the event of potential allocations to existing shareholders or cornerstone investors who are core connected persons of a listing applicant pursuant to the Size Exemption Conditions, the HKEx will grant a related waiver from strict compliance with Main Board Listing Rule 9.09(b) (GEM Listing Rule 12.11) in respect of such allocations. These rules prevent dealing in the securities for which listing is sought by any core connected person of a listing applicant from four clear business days before the expected hearing date in the case of Main Board applicants (and from the time of submitting the listing application in the case of GEM applicants) until listing is granted. However, they do not apply to circumstances under the Main Board Listing Rule 7.11 (GEM Listing Rule 10.16) where the share dealing is to achieve the required public float. 

In addition, the HKEx published a guide that consolidated all currently effective guidance letters and listing decisions related to new listing, to streamline the listing requirements and facilitate the work of new listing applicants and their advisers. The guide will come into effect on January 1, 2024.

Insights by Jones Day should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information purposes only and may not be quoted or referred to in any other publication or proceeding without the prior written consent of the Firm, to be given or withheld at our discretion. To request permission to reprint or reuse any of our Insights, please use our “Contact Us” form, which can be found on our website at This Insight is not intended to create, and neither publication nor receipt of it constitutes, an attorney-client relationship. The views set forth herein are the personal views of the authors and do not necessarily reflect those of the Firm.