Primary vs. Secondary Listing: How U.S.-Listed Chinese Companies Add a Hong Kong Listing

Primary and Secondary Listing: Two Different Rule Routes

A Hong Kong primary listing and a Hong Kong secondary listing operate under different parts of the Main Board Listing Rules. A primary-list applicant must satisfy the financial qualification tests in Main Board Rule 8.05: the profit test, the market capitalisation/revenue/cash flow test, or the market capitalisation/revenue test. A secondary-list applicant instead applies under Chapter 19C, particularly Rules 19C.02 and 19C.02A.

For secondary listing, the issuer retains its primary listing outside Hong Kong and adds a listing on The Stock Exchange of Hong Kong Limited. Under HKEX’s overview, the issuer must have a primary listing on a Recognised Stock Exchange, while most of its equity securities must be traded outside Hong Kong. The detailed eligibility grid also identifies routes involving Qualifying Exchanges.

The distinction is substantive. Secondary listings are principally regulated by the rules and authorities of the jurisdiction in which the issuer is primarily listed, and the overseas exchange remains the dominant trading market. Hong Kong therefore applies a tailored Chapter 19C regime rather than treating the application in the same way as a primary listing.

This analysis concerns “overseas issuers”, a term used by HKEX for companies incorporated outside Hong Kong and the People’s Republic of China.

Secondary-Listing Eligibility, Test by Test

A U.S. listing does not, by itself, establish eligibility. The applicant must satisfy the following cumulative elements.

1. Exchange and trading location

The issuer must have an overseas primary listing, and the majority of its equity securities must be traded outside Hong Kong when applying. HKEX’s detailed grid uses three exchange routes: a Recognised Stock Exchange, a Qualifying Exchange, and a further route shown in the grid as “Qualifying Exchanges(*)”. The grid also makes the centre of gravity relevant.

For an issuer with its centre of gravity in Greater China, a non-WVR application based on a Recognised Stock Exchange other than a Qualifying Exchange is generally prohibited. HKEX may nevertheless consider such an application exceptionally, on the applicant’s individual circumstances and the merits of the case. The centre-of-gravity requirement is permitted under the qualifying-exchange routes in the grid.

2. Innovative Company status

The first route in the grid does not require the applicant to be an “Innovative Company”. The grid states that this requirement applies to the two qualifying-exchange routes. For the weighted voting rights, or WVR, route, the issuer must also have two years of listing with a good compliance record on its primary exchange.

3. Minimum market capitalisation

The grid contains two minimum market capitalisation entries of HK$3 billion at the time of listing. Its further qualifying-exchange route requires either:

• market capitalisation of at least HK$40 billion at listing; or
• market capitalisation of at least HK$10 billion at listing, together with revenue of at least HK$1 billion for the most recent audited financial year.

These are alternative tests within that route, not cumulative requirements. The HK$10 billion figure used for the shorter listing-history route is a separate test and must not be confused with the HK$10 billion market capitalisation component of the alternative HK$40 billion/revenue route.

4. Listing history and compliance

The minimum track record depends on the route:

• A non-WVR issuer primarily listed on a Recognised Stock Exchange must have five years of listing with a good compliance record.
• A non-WVR issuer primarily listed on a Qualifying Exchange must also normally have five years, but may use a two-year route if its market capitalisation is at least HK$10 billion when it lists in Hong Kong.
• A WVR issuer must have two years of listing with a good compliance record.

HKEX may waive the listing-track-record criterion where the applicant is well established and has a market capitalisation at listing significantly larger than HK$10 billion. The waiver is discretionary; it is not an alternative minimum.

5. Core shareholder protection standards

The applicant must also demonstrate how its domestic laws, rules, regulations and constitutional documents, considered together, provide the core shareholder protection standards. HKEX may require amendments to the constitutional documents to close any gap.

Under HKEX’s “Listing of Overseas Issuers” framework, overseas issuers have been required to meet 14 core shareholder protection standards since 1 January 2022. These standards are set out in Main Board Appendix A1 and, for the corresponding GEM regime, GEM Appendix A1. Rule 19C.02 adds the overarching requirement that the issuer demonstrate both eligibility and suitability for listing.

What Is Exempted—and What Still Applies

Secondary status is not equivalent to being outside the Hong Kong rules. HKEX exempts or waives specified requirements because the issuer is primarily regulated overseas, but several core and procedural obligations remain.

The standard exemptions include:

• compliance with the Model Code for Securities Transactions by Directors of Listed Issuers;
• establishment of an audit committee and a remuneration committee;
• appointment of a company secretary with the requisite qualifications or experience;
• the reporting, announcement, circular, shareholder-approval and annual-report requirements, where applicable, for notifiable and connected transactions;
• compliance with the Corporate Governance Code;
• content requirements for annual and interim reports;
• publication of an environmental, social and governance report; and
• certain continuing disclosure requirements, including next-day returns, advances to an entity, financial assistance and guarantees to affiliated companies, pledges of shares by controlling shareholders, specified loan covenants concerning controlling-shareholder performance, and disclosure of breaches of loan agreements.

The transaction-related exemptions do not displace the 14 core shareholder protection standards. Nor do they remove the need to establish eligibility and suitability under Rule 19C.02.

A secondary-list issuer must also appoint and maintain a person authorised in Hong Kong to accept service of process and notices. Main Board Rule 19.05(2) imposes that continuing requirement, and Rule 19C.02A(3) applies it expressly to secondary listings. The issuer must notify HKEX of the appointment, termination and prescribed contact details.

Secondary-list issuers must also comply with the securities registration requirements in Rules 19.05(3), 19.05(4) and 19.05(5). In addition, every secondary-listed issuer must publish a Company Information Sheet on the designated HKEX webpage and its own website. The sheet must include a summary of the waivers and exemptions granted to the issuer.

Contractual Arrangements and the VIE Question

The May 2025 version of HKEX-GL77-14, “Guidance on listed issuers using contractual arrangements for their businesses”, addresses situations in which foreign ownership is restricted. Under a typical structure, the issuer obtains economic benefits and control over domestic operating companies, commonly called OPCOs; the right to consolidate their financial results; an acquisition right exercisable when domestic law permits; and security over OPCO shares held by registered owners.

The guidance requires contractual arrangements to be “narrowly tailored”. The issuer may use them only to the extent necessary to address restrictions on foreign ownership and should directly hold the maximum permitted equity interest in the OPCO. Where no foreign ownership restriction exists, contractual arrangements should not be used unless there are exceptional circumstances.

A legal opinion is required on compliance with applicable laws and the domestic subsidiaries’ articles of association. Where an OPCO operates in Mainland China, the issuer’s PRC legal adviser must also positively confirm that the arrangements would not be treated as concealing illegal intentions through a lawful form and void under the PRC contract law.

Secondary listing does not grant a general exemption for non-Greater China VIE issuers. HKEX distinguishes between grandfathered and non-grandfathered structures:

• Grandfathered Greater China Issuers and Non-Greater China Issuers may secondary list with existing contractual arrangements without full compliance with Chapter 4.1 of HKEX-GL77-14. They must still comply with the chapter’s disclosure requirements.
• Their arrangements may not be “narrowly tailored” to the business purpose or minimise conflict with local law to the same extent as a fully compliant structure.
• Non-Grandfathered Greater China Issuers must, unless waived, comply with Chapter 4.1 and the WVR safeguards under the Listing Rules where applicable.

All issuers using contractual arrangements must monitor changes in relevant local laws and regulations and ensure continued compliance.

Refusal and Migration to Dual-Primary Status

Main Board Rule 19C.02A gives the Exchange an absolute discretion to refuse a secondary listing if it believes that:

1. listing the securities would not be in the public interest;

2. the primary exchange cannot provide shareholder protection standards at least equivalent to Hong Kong’s;

3. waivers or exemptions from the issuer’s primary-market rules result in materially less stringent regulation than generally applies to comparable listed entities;

4. the application is an attempt to avoid rules applicable to a primary listing in Hong Kong; or

5. most worldwide trading will take place in Hong Kong upon or shortly after the Hong Kong listing.

Where a material part of the applicant’s business is listed on its primary exchange through a reverse takeover, the Exchange will normally regard the secondary-listing application as an attempt to avoid primary-listing rules.

A primary listing on the overseas exchange must also have been granted before the Hong Kong secondary listing can be granted.

Trading migration is governed separately by Rule 19C.13. If at least 55% of an issuer’s total worldwide trading volume by dollar value occurs on HKEX markets during its most recent financial year, the Exchange regards the trading as having migrated permanently to Hong Kong. The calculation includes trading in depositary receipts issued on the listed shares. The issuer is then regarded as having a dual-primary listing, and Rules 19C.11, 19C.11A, 19C.11B and 19C.11C cease to apply, as applicable. A 12-month grace period is provided to comply with the applicable Exchange Listing Rules.

Frequently Asked Questions

Does “U.S.-listed” by itself establish secondary-listing eligibility?

No. The primary exchange must fall within the applicable HKEX route, and the issuer must also meet the trading-location, listing-history, market-capitalisation and core shareholder-protection requirements. A WVR structure introduces additional conditions.

Can the two-year route be used without a good compliance history?

No. The two-year alternative still requires two years of listing with a good compliance record. The Qualifying Exchange route also requires market capitalisation of at least HK$10 billion when the Hong Kong listing is granted.

Does secondary-listing status remove all Hong Kong shareholder-protection requirements?

No. Overseas issuers must meet the 14 core shareholder protection standards applicable since 1 January 2022. Secondary status instead provides targeted exemptions and waivers from specified governance, reporting and continuing-disclosure requirements.

Are grandfathered contractual arrangements exempt from every VIE requirement?

No. They may be secondary listed without full compliance with Chapter 4.1 of HKEX-GL77-14, but contractual-arrangement disclosures remain mandatory. Every issuer must also monitor changes in relevant local laws.

What does the 55% worldwide trading threshold change?

It causes the Exchange to treat permanent migration to Hong Kong as a dual-primary listing, rather than leaving the issuer solely within the secondary-listing classification. The issuer then receives a 12-month grace period to comply with the applicable Exchange Listing Rules.