--- title: "New IPO rules released by HKEX! International placement becomes the new trend" type: "Topics" locale: "zh-CN" url: "https://longbridge.com/zh-CN/topics/32947863.md" description: "On August 4th, the new Hong Kong IPO rules "Optimization of Pricing and Public Market Regulations for Initial Public Offerings" officially took effect. According to the announcement, Hong Kong IPOs are transitioning from a "retail investor-dominated market" to an "institutional placement-dominated market." Previously, Hong Kong IPOs were still a "retail investor-dominated market," where listed companies were small, and retail investors accounted for over half of the trading volume. Now, institutional investors make up nearly 90% of the trading, with recent IPOs raising tens to hundreds of billions. More international and institutional investors are participating. The market is changing, and the Hong Kong Stock Exchange's regulations must adapt accordingly..." datetime: "2025-08-14T04:01:11.000Z" locales: - [en](https://longbridge.com/en/topics/32947863.md) - [zh-CN](https://longbridge.com/zh-CN/topics/32947863.md) - [zh-HK](https://longbridge.com/zh-HK/topics/32947863.md) author: "[贝塔投研](https://longbridge.com/zh-CN/profiles/18677634.md)" --- > 支持的语言: [English](https://longbridge.com/en/topics/32947863.md) | [繁體中文](https://longbridge.com/zh-HK/topics/32947863.md) # New IPO rules released by HKEX! International placement becomes the new trend On August 4, the new rules for Hong Kong IPO, "Optimization of Pricing and Public Market Regulations for Initial Public Offerings," officially took effect. According to the announcement, Hong Kong IPO market is transitioning from "retail investors' dominance" to "institutional investors' dominance." Previously, Hong Kong IPOs were dominated by retail investors, with small-scale listed firms and retail investors accounting for over half of the trading volume. Now, institutional investors make up nearly 90% of the trading, and recent IPOs have raised tens to hundreds of billions. More international and institutional investors are participating. As the market evolves, the Hong Kong Stock Exchange has adjusted its rules to ensure more accurate pricing, catering to both institutional and retail investors, and attracting more high-quality companies to list in Hong Kong. ## **Key Point 1: Reallocation of Shares Between Institutions and Retail Investors** The new rules require issuers to allocate at least 40% of the initially proposed shares in an IPO to the institutional placement portion (down from the originally proposed 50%). This aims to highlight the importance of institutions and preserve their pricing power. It gives more leverage to institutional investors with bargaining power, increasing the likelihood of failed issuances (as institutional placements use a bidding system, and overly high prices may deter demand), thereby reducing the risk of overpricing and post-listing crashes. The current clawback mechanism has also been revised into Mechanism A and Mechanism B. Mechanism A: Replaces the existing allocation and clawback mechanism with a new public subscription allocation ratio, with the maximum clawback percentage increased from the proposed 20% to 35%. In simple terms, the initial public subscription quota is set at 5%. If oversubscription is between 15x and 50x, 10% is clawed back; between 50x and 100x, 20% is clawed back; and for oversubscription of 100x or more, 30% is clawed back, meaning retail investors get 35%. ![Image](https://pub.pbkrs.com/uploads/2025/7b702da49d440218b3147f491c3962ea?x-oss-process=style/lg) Mechanism B: Introduces a new fixed-ratio allocation mechanism, requiring issuers to pre-select a 10%-60% public subscription ratio, with no clawback (the upper limit has been raised from the proposed 50% to 60%). This mechanism is straightforward: issuers can directly allocate shares in the public offering, with up to 60% for retail investors, but this must be done while ensuring the 40% institutional placement quota is met. Combining these two mechanisms, we see that retail investors' allotment rates have decreased—previously, the maximum clawback was 50%, but now it’s only 35%. However, there are benefits: the shareholding structure will improve, reducing the likelihood of poor post-listing performance due to excessive retail selling pressure. With institutional placements leading, pricing will better reflect fundamentals. For issuers, if they prioritize retail investors, they can choose Mechanism B and increase the public subscription ratio, but they must be wary of low institutional participation, which could lead to failed listings. For stability, they can opt for Mechanism A or a low ratio under Mechanism B, where higher institutional holdings lead to lower stock volatility and greater stability. ## **Key Point 2: Adjustments to Public Float Requirements** The Hong Kong Stock Exchange has introduced a "tiered mechanism" based on market capitalization, where larger companies face lower public float requirements. Previously, regardless of market cap, the minimum public float was 25%. Under the old rules, companies needed a market cap of HKD 40 billion to qualify for a reduced 15% public float. The new rules lower this threshold to HKD 3 billion and allow companies to meet either the "HKD 3 billion expected market cap" or "10% public float" requirement, replacing the previous dual criteria with an either/or option. This adjustment reduces compliance burdens while maintaining regulatory flexibility. The exchange observed that some large-cap companies list in Hong Kong primarily for international financing, and forcing them to sell 25% of shares could undermine major shareholders' control. The tiered approach benefits high-cap, high-liquidity firms and provides greater flexibility for international financing, making Hong Kong more attractive to quality listings. In summary, the new rules weaken retail investors' role, allocating more shares to institutional placements, aligning with current trading trends where institutions dominate over 90% of the market. The era of "retail investors' dominance" is gradually shifting to "institutional investors' dominance," and the new rules will attract more international and institutional investors, reflecting market's direction. Disclaimer: This content represents the author's independent views and does not reflect the stance of Beta International Securities. Unauthorized reproduction is prohibited. The content is for reference only and does not constitute investment advice. Trading risks are borne by the individual. For the latest Hong Kong and U.S. stock market updates, follow the official account: Beta Investment Think Tank. ### 相关股票 - [Hong Kong Exchanges and Clearing (HKEX) (HKXCY.US)](https://longbridge.com/zh-CN/quote/HKXCY.US.md) - [HKEX-R (80388.HK)](https://longbridge.com/zh-CN/quote/80388.HK.md) - [HKEX (00388.HK)](https://longbridge.com/zh-CN/quote/00388.HK.md)