The Zhitong Finance App learned that on October 13, the Hong Kong Securities Regulatory Commission issued a circular stating that sponsor work has improved since January this year. Specifically, sponsor jobs have become more widely distributed in the market. Active listing applications involving the five most active sponsors and in the approval stage accounted for a share of total applications, from 77% as of January to 65% as of September. At the same time, the average workload of key signatories has been reduced. The number of overburdened key sponsors and the number of overburdened key personnel were also reduced by 78% between January and September.
The Hong Kong Securities Regulatory Commission stated in its circular that since January, the sponsor's resources and key personnel capabilities have shown signs of improvement. Sponsors have taken constructive steps to ease resource constraints and improve the distribution of work among key personnel. The Hong Kong Securities Regulatory Commission has expedited the processing of newly submitted applications for key personnel appointments to support the sponsor's efforts. From January 30 to September 30, 2026, the number of new key personnel approved by the Securities Regulatory Commission increased by 65% compared to the same period in 2025.
The Hong Kong Securities Regulatory Commission notes that there are still deficiencies in some listing application documents. The Hong Kong Securities Regulatory Commission issued further written letters to 11 sponsors from January to September, expressing concerns about the nature of the listing applicants' business and whether the sponsor's due diligence review and response were sufficient. A total of 65 listing applications were suspended during this period. Sponsors should continue to diligently plan their resources and capabilities, and place a high priority on maintaining the quality of work.
The Hong Kong Securities Regulatory Commission warned that some IPOs still involve questionable arrangements (such as undisclosed subscription funds and guaranteed returns), and has urged sponsors and overall coordinators to be wary of warning signs such as major financial transactions before and after listing. At the same time, sponsors and other IPOs are urged to continue to step up related work and beware of opaque arrangements involving initial public offerings and post-listing activities.
Furthermore, the Hong Kong Securities Regulatory Commission pointed out that although sponsor conduct has improved since January, it has also discovered that some initial public offerings involve questionable arrangements and are deeply concerned. Among them, listing applicants are suspected to have provided undisclosed subscription funds or guaranteed returns to designated investors or persons associated with them. By distorting real investor demand, these arrangements damage the integrity and stability of the market, weaken the fairness of the price discovery mechanism, and harm public investors due to misleading disclosures and potentially manipulative trading activities after listing.
The latest circular sets out the requirements of the Hong Kong Securities Regulatory Commission, urging sponsors, overall coordinators and capital market intermediaries to be more alert to potential warning signs. Relevant warning signs include the listing applicant making significant advance payments, loans, investments or other financial transactions shortly before and after listing, which may benefit the initial public offering investors or persons associated with them; and the arrangements involved may disguise the identity of the ultimate investors.
Ms. Leung Fung-yee, CEO of the Hong Kong Securities Regulatory Commission, said, “We are pleased to see the progress made in the market since January; improvements in sponsor capacity and management supervision will lay a solid foundation for strict control and promotion of high-quality listings. At the same time, a robust initial public offering market must be based on market integrity and investor protection. Although most market participants are able to abide by the rules, intermediaries must remain alert to various warning signs relating to questionable arrangements and challenge any unjustifiability. The Securities Regulatory Commission will not hesitate to take enforcement action against a few lawbreakers who seek to damage the fairness, order and quality of the market.”