IPO Stocks

FAQ
1.
Will I receive any confirmation after making an application online?
Yes. Once you have successfully submitted your application, the application details will be sent to you for confirmation. After you have confirmed the details, you will receive a reference number for record. If you do not receive the reference number or have other enquires, please call 2532 3838 during office hours.
2.
Can I amend or cancel my IPO application?
No, once you have submitted the application and confirmed the details, you cannot amend any application details or cancel your application.
3.
Can I submit more than one application for the same IPO?
No. Multiple applications or suspected multiple applications will be rejected.
4.
How do I know whether my application is successful or not?
You will receive a confirmation letter by mail for the allotment result of the IPO.
5.
How can I get a refund for a wholly or partially unsuccessful IPO?
If your application is wholly or partially unsuccessful, on the refund date as announced by the issuers:
-  Yellow Form Application: nominee will credit the excess fund to your payment account.
-  White Form Application: registrar will send the refund amount in cheque by ordinary post to the address on the application form. If you have applied for a large quantity or more specified in the white form, you can choose to collect the cheque in person.
6.
How do I receive the allotted shares if my application is successful or partially successful?
Before IPO's first trading day,
-  Yellow Form Application: the allotted shares will be deposited to your securities account so that the shares can be sold on the first day of listing.
-  White Form Application: registrar will send the physical certificates to the address by ordinary post on the application form. If you have applied for a large quantity or more specified in the white form, you can choose to collect the certificate(s) in person.
7.
What are the risks associated with IPO?

Over-subscribing to an IPO

In some cases, IPO may be oversubscribed. The company may go through an allocation process to determine whether an investor will receive any shares and, if so, in what quantity. An investor may be tempted to subscribe for more shares than he intends to, if he thinks he will not receive the full amount in case of an over-subscription. However if the IPO is not oversubscribed, the investor will receive all the quantities applied for and will incur the full cost.

Market risk

There is a risk that the company's share price will drop below its initial IPO price, once the company's share commence trading on the stock market. Share price will fluctuate over time.

Company risk

It is vital to understand the company and business you are investing in. Investors should study thoroughly the prospectus, financial report and even seek professional advice before making the investment decision.
8.
What are the charges involved if I apply the IPO through Hang Seng Nominee (Yellow Form)?
Handling fee (HKD IPO: HKD100 ; RMB IPO: RMB85) will be charged irrespective of allotment result and successful listing or not.
9.
Does the Bank provide RMB IPO subscription service?
Yes.
10.
Do I have to maintain sufficient RMB funds during application for RMB IPO?
Yes, your RMB settlement account must maintain sufficient RMB funds during application for RMB IPO.
11.
I already have an integrated account and securities account but have not yet activated my RMB account under the integrated account, can I apply for RMB IPO immediately after successful activation?
Yes, but you should note your RMB IPO application will be rejected if there is insufficient funds in your RMB account.
12.
I have opened an integrated account and activated securities account and RMB account under the integrated account on the same day, can I apply for RMB IPO immediately after account opening?
No, you can only use the newly opened account to apply for the RMB IPO on the next working day.
13.
Where can I verify if Hang Seng Bank Limited and Hang Seng Securities Limited have confirmed to HKEx their readiness for dealing and/or clearing transactions in RMB Securities?
Hang Seng Bank Limited and Hang Seng Securities Limited are the participants who have confirmed to the HKEx the readiness for dealing and/or clearing transactions in RMB securities. Customer can check the relevant list on the HKEx website.
14.
Where can I obtain more information on RMB securities?
You can obtain the general information on RMB securities at the SFC website www.InvestEd.hk. Issuers of the relevant RMB equity product will usually also issue public materials disclosing information on their products, such as prospectuses and other offering documents, website information, leaflets, brochures, etc.
15.
What are the key risks of investing in Renminbi-denominated securities ("RMB securities")?

Market risk

There is a risk that the company's share price will drop below its initial IPO price, once the company's shares commence trading on the stock market. Share price will fluctuate over time, your investment in the product may suffer a loss even if the RMB appreciates against HKD or other currencies.

Company risk

It is vital to understand the company and business being invested in. Investors should study thoroughly the prospectus, financial report and even seek professional advice before making the investment decision.

Liquidity risk

RMB equity products are a new type of investment product in Hong Kong. Regular trading or an active secondary market may not develop in these products. Therefore you may not be able to sell your investments in the RMB equity products on a timely basis, or you may have to sell them at a deep discount to their value in order to find a buyer. Also, should the PRC central government tighten foreign exchange controls, the liquidity of RMB or RMB equity products in Hong Kong will be affected and you may be exposed to greater liquidity risk.

Currency risk

If you are a non-mainland PRC investor who holds a local currency other than RMB, you will be exposed to currency risk if you invest in RMB equity products. You will incur currency conversion costs, being the spread between buying and selling RMB, when you convert between your local currency and RMB during the purchase and sale of an RMB equity product. You should also note that RMB is currently not freely convertible, the value of RMB against other foreign currencies fluctuates and will be affected by, amongst other things, the PRC government’s control (for example, the PRC government regulates conversion between RMB and foreign currencies), which may adversely affect your return under RMB equity product when you convert RMB into your local currency. RMB is subject to foreign exchange control by the PRC government and thus investing in RMB equity products is subject to the currency risk of RMB.

Exchange rate risk

As RMB equity products are traded and settled in RMB, they are exposed to exchange rate risk. Even if the RMB/HKD exchange rate remains steady, and the price of the RMB equity products you are holding does not change, you may not receive the same amount of HKD when you sell the products due to the spread between buying and selling RMB. RMB equity products are not an investment instrument for you to use to speculate on movements of the RMB/HKD exchange rate.

Default risk

In general, RMB equity products are exposed to the usual kind of default risks that might be associated with equity products denominated in other currencies. RMB equity products exposed to the mainland China market are particularly subject to risks that may arise from the relevant market/industry/sector in mainland China.

Over-subscribing to an IPO

In some cases, IPO may be oversubscribed. The company may go through an allocation process to determine whether an investor will receive any shares and, if so, in what quantity. An investor may be tempted to subscribe for more shares than he intends to, if he thinks he will not receive the full amount in case of an over-subscription. However, if the IPO is not oversubscribed, the investor will receive all the quantity applied for and will incur the full cost.