FINANCIAL MARKET
IPO issuers get more flexibility
The HKEX has revised its listing rules to improve liquidity and flexibility in the IPO market. The amendments took effect on 4 August and apply to all issuers.
Under the new rules, at least 40% of shares initially offered in an IPO must be allocated to its book-building placing tranche. Previously, the listing rules did not set a minimum allocation requirement.
For the public subscription tranche, issuers can choose between mechanisms A and B. Under mechanism A, the issuer initially allocates 5% of the offer shares to the public subscription tranche, with a clawback mechanism that can increase this portion to 35% in the event of oversubscription.
Under mechanism B, the issuer preselects a percentage to allocate to the public subscription tranche, ranging from 10% to 60%. This arrangement does not include a clawback mechanism.
Previously, issuers were required to allocate at least 10% of the public subscription tranche under the original mechanism, with a clawback mechanism that could increase the public subscription portion to 50%.
In addition, the HKEX is seeking feedback on the requirements for the initial public float, with a consultation period of two months until 1 October.
New measures issued for financial products
The National Financial Regulatory Administration issued the “administrative measures for the suitability of products of financial institutions” on 11 July 2025, designed to ensure financial products purchased are matched to consumers’ risk tolerance.
Comprising five chapters and 49 articles, the administrative measures regulate investment and insurance products offered by financial institutions such as commercial banks, wealth management companies and insurance companies under the supervision of the National Financial Regulatory Administration.
The administrative measures, which will come into effect on 1 February 2026, require financial institutions to classify the risk levels of investment products from level 1 to level 5. Financial institutions must also determine whether clients are professional investors or retail investors to assess whether they have to undergo a risk tolerance evaluation and provide appropriate product recommendations.
BANKRUPTCY
Xiamen’s debtors get relief
Following Shenzhen, Xiamen has become the second city to establish a personal bankruptcy legal framework, as the Personal Bankruptcy Regulation of Xiamen Special Economic Zone was approved by the local authority on 26 August 2025. It will take effect on 1 November.
The regulation offers a fresh start to “honest but unfortunate” debtors – those unable to repay debts due to circumstances such as business failures or natural disasters – by exempting their remaining debts.
Key features of the regulation include a confidential, free “pre-filing counselling and debt clearance” process, allowing debt disputes to be resolved without litigation. This approach draws inspiration from systems in Japan and Germany.
The regulations also introduce a property exemption system that reflects Xiamen’s economic conditions. Exempted assets must not exceed three times the city’s per capita disposable income from the previous year, ensuring a balance between debtor relief and creditor interests.
INDUSTRIAL MOVEMENT
Revamped law to sustain mineral supply
The revised Mineral Resources Law took effect on 1 July 2025. The revision modernises the 39-year-old law and aims to promote a stable supply of mineral resources.
To ensure this, the revamped mineral resources law added a new chapter on “mineral resource reserves and emergency response” to address risks of mineral shortages. It also updated the application and approval system for obtaining exploration and mining rights, and reinforced the tender, auction and listing processes for mining rights with regulations.
To encourage mineral exploration, the law establishes a “fast track” system for exploration and mining. Article 23 provides that holders of exploration rights are entitled to explore mineral resources within their registered exploration areas and may, in accordance with the law, have priority in obtaining mining rights. This addresses previous concerns about being unable to directly obtain mining rights after discovering mineral reserves.
Online pricing practices set for regulation
China is set to regulate the pricing practices of internet platforms, according to a draft rule proposed by the National Development and Reform Commission, the State Administration for Market Regulation, and the Cyberspace Administration of China on 23 August 2025.
Internet platform operators and online sellers will be regulated under the new rule, which comprises seven chapters and 30 articles. It focuses on four key areas: pricing autonomy; price transparency; competitive pricing behaviour; and monitoring mechanisms.
To protect sellers’ autonomy in setting prices, the rule explicitly prohibits platforms from imposing unreasonable restrictions such as limiting traffic, blocking stores, or delisting products.
The new rule is based on existing laws including the Price Law, the E-Commerce Law, and the Anti-Unfair Competition Law. The public consultation period for the draft runs until 22 September 2025.
IN NUMBERS
16%Decrease recorded in Chinese law firms’ 2024 median revenue compared with 2023
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REGULATORY MOVES
Merger reversed due to monopoly
The State Administration for Market Regulation (SAMR) prohibited Wuhan Yontong Pharmaceutical from acquiring equity in Shandong Beida Gaoke Huatai Pharmaceutical on 22 July 2025. This marks the fourth merger prohibited since the Anti-Monopoly Law came into effect in 2008.
It is also the first time the administration blocked a transaction that was below the notification threshold.
Wuhan Yontong Pharmaceutical signed an agreement to acquire 50% equity in Shandong Huatai in 2018. At the time, the transaction did not meet the notification threshold for anti-monopoly filing, as each company’s annual turnover was below RMB800 million (USD111.9 million) in 2017.
Several years after the transaction was completed, the SAMR required Wuhan Yontong to submit a supplementary filing this year. After multiple rounds of negotiations, the authorities prohibited the transaction because it would disrupt the competition for papaverine hydrochloride injections in the Chinese market. Papaverine hydrochloride injection is a key drug for treating vasospasm.
Wuhan Yontong has been required to transfer its shares in Shandong Huatai Pharmaceutical to a third party by January 2026. Until the equity transfer is completed, it is prohibited from participating in the operation and management of Shandong Huatai.
