(Bloomberg) -- Hong Kong pledged to vet and debut companies in about 100 days in a bid to guarantee a set time frame for initial public offering applicants.
For companies fully meeting listing requirements, the stock exchange and regulator will limit the question-and-answers in two rounds to no more than 40 business days, according to a joint statement by Hong Kong Exchanges & Clearing Ltd. and the Securities and Futures Commission.
Another 60 business days are anticipated to be needed by applicants and sponsoring banks to address any comments by regulators. Currently, the median time of getting approved is 173 business days.
For mainland-listed firms with a market capitalization of least HK$10 billion ($1.3 billion) and that are compliant with all laws and regulations, Hong Kong regulators will further squeeze their queries into one round of under 30 business days, according to the statement.
The move comes as initial public offerings are stirring back to life after a prolonged lull. China late last month unleashed a barrage of measures designed to jump start the economy and support stock markets.
The new time-line will “provide greater clarity and certainty in the application process for New Listing applications, thereby assisting potential applicants and their advisers in formulating their listing plans,” said HKEX’s Head of Listing Katherine Ng.
The SFC fully supports the plan, saying it was in line with its strategic priority to improve the global competitiveness and appeal of Hong Kong’s capital markets, said its Executive Director of Corporate Finance Michael Duignan.
It could add further momentum to the city’s market. Capital raised through IPOs surged more than sixfold to HK$42.3 billion ($5.4 billion) in the third quarter, while average daily stock turnover in Hong Kong rebounded 21%, according to Bloomberg Intelligence.
The accelerated time line does not apply to applications with complex regulatory implication or of doubtful quality, the statement added.
The initiative was announced earlier this week by the city’s Chief Executive John Lee in his Policy Address.
The new time-line applies to listing applications made after Friday.
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