Preparation for IPO

Equity capital markets (ECM)

It is never too early for a company which intends to undertake an IPO to ensure that it complies with all applicable laws.

Under the Prospectus Guidelines, a company seeking for listing must disclose any non-compliance of the relevant laws, regulations, rules or requirements governing the conduct of the group’s business and environmental issue which may materially affect the group’s business or operations, in the prospectus. The company must also disclose the measures taken to rectify the non-compliance in the prospectus.

Rectification of legal non-compliance takes time and may derail the timeline for an IPO. It may involve applying to obtain or renew licences required for the business of the group or liaising with the authorities to rectify breach of laws or conditions of licences.

Promoters of a company which intends to seek for listing must ensure that the group complies with the laws, regulations, rules or requirements governing the conduct of the group’s business or operations.

Obviously, compliance is required even if a company does not intend to seek for listing. However, compliance is even more crucial for a company which intends to list to ensure there is no delay to the IPO exercise.


This post was first posted on Linkedin on 15 February 2021.

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