Hong Kong Exchanges and Clearing (HKEX) is considering merging its Growth Enterprise Market (GEM) board with the main board by creating a new chapter in its listing rules, according to a source familiar with the discussions.

The proposed Chapter 18D would be a key element of the second phase of HKEX's review of its listing regime and is expected to undergo public consultation by the end of 2026. This move aims to revitalize the underperforming GEM board, which has experienced minimal turnover and fewer new listings.

“There have been studies on reforming the GEM for a long time, as the second board did not really work well in terms of allowing smaller-sized companies to list,” the source said. “Allowing these smaller players to list in a specific chapter ... may be a better option.”

Since reforms in 2018, HKEX has introduced specific chapters tailored to different company types that do not meet general listing requirements. These include Chapter 18A for pre-revenue biotechnology firms, 18B for special purpose acquisition companies, and 18C for large technology companies without revenue.

The creation of Chapter 18D would continue this approach, potentially providing a more effective framework for smaller companies currently served by GEM.

Sources