Investors should note that all investment involves risks. Prices of securities may go up or down and may even become valueless. Investors should read the relevant prospectus for detailed information about the proposed offer and seriously consider if investment in the relevant shares is suitable for his/her investment needs by reference to his/her financial situation, investment experience, investment objectives and other conditions and needs before deciding whether to invest in the relevant shares. If required, investors should obtain independent legal, financial and other professional investment or other advice before making any investment decision.
What is IPO?
IPO stands for Initial Public Offering. It is the first time a company issues shares to public investors and will be listed on the stock exchange for trading.
Where can I apply for the IPO?
Prospectuses and application forms can be obtained from designated banks or your brokers. You can apply by yourself or subscribe through nominee services.
What are the differences between the white and yellow application form?
White Forms (physical application form or eIPO)
Apply on a physical WHITE application form/through White form eIPO service if you want the Public Offer Shares to be issued in your own name (the payment amount shall be made in your own cheque or certified cashier order (for physical application form) / by using internet banking services of designated banks and/or PPS payment services (White form eIPO) ).
Physical shares certificates and/or refund cheques in respect of wholly or partially successful applications would be sent to you by the Share Registrar by mail/credited to your designated bank account (refund money of White form eIPO).
As the physical share certificates are in the applicant own name, they need to be deposited into the applicant’s securities account with a bank or broker before they can be sold on the market. Generally, the applicant may not be able to sell the shares immediately on the first listing day of the new shares until the shares are deposited into CCASS.
Apply on a YELLOW application form through your bank or your broker if you have already maintained a securities account with them.
Shares allotted will be received by the bank or the broker and will be credited to your securities account on or before the first listing date.
Refund cheque in respect of wholly or partially unsuccessful applications will be credited to your designated bank account on the refund day if you apply through the bank.
Shares allotted can be sold on the first day of listing.
The applicant must be 18 years of age or older.
The applicant should read the conditions and instructions attached to the application form. To be valid, the applicant must complete all applicable parts of the application form.
Multiple applications will be rejected. All applications will be rejected as multiple applications if you, or you and joint applicants together make more than one application (whether individually or jointly with others) on a White or Yellow Application Form.
For physical White form application, each application must be accompanied by a cheque under the applicant's name or a banker's cashier order. The cashier order must have the applicant's name certified on the back by a person authorised by the bank. The name on the back of the banker's cashier order and the name on the application form must be the same.
Application will not be accepted if the cheque is dishonoured on its first presentation.
If applied in joint name, you should open the joint name securities account for depositing the relevant shares.
Minimum application will be one board lot. Any application for more than one board lot must be in one of the number of shares set out in the application form.
Application amount would include 1% brokerage, 0.0027% SFC transaction levy and 0.005% Hong Kong Stock Exchange Trading Fee.
Only written signatures will be accepted for signing the application form.
Customers who apply for the IPO through our Bank should pay the handling fee (HKD IPO: HKD100; RMB IPO: RMB85) per application for the IPO stock subscription and such charge will not be refunded irrespective of the allotment result or whether the Company is successfully listed or not.
What information can I get from the prospectus?
A company making an IPO must publish a prospectus which sets out the following information of the company and its subsidiaries for investor's review:
Business nature, company's history & current status
Strength and risk factors
Future plans and prospects
Information and time-table relating to the subscription of new shares
You must carefully read the prospectus first before considering to subscribe for the new issue.
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 quantity applied for and will incur the full cost.
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.
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.
To know more about IPO investing and its associated risk, you may refer to the website of Investor Education Center (www.hkiec.hk) or HKEX (www.hkex.com.hk).
IPO Financing Service of Our Bank
What is the main use of IPO financing?
IPO financing is solely used to subscribe for the shares of a company that are offered for sale and will be listed on the stock exchange.
Is this financing applicable to all the newly issued securities?
No, it is subject to our Bank's decision.
What are the terms of financing?
General terms of financing are:
Use yellow form to subscribe the IPO on your behalf
Financing amount can be 90% of your subscription amount or below (varies among IPO stocks)
You are required to pay the remaining subscription amount (i.e. "deposit amount") and relevant bank service charges.
Interest rate on financing will be subject to current market environment and varies among IPO stocks.
How long will be the financing period?
The financing period starts from the day of IPO application deadline up to the refund day (excluding the refund day). The actual IPO financing period will be subject to change, according to the date of IPO application deadline and refund date announced by the issuer of the relevant IPO stock.
What charges do I need to pay under this financing?
Interest from day of advance up to the refund day (excluding the refund day). You are required to pay the interest incurred separately starting from the refund day until full repayment of the loan amount (excluding the repayment day) if you fail to repay the full loan amount on the refund day.
Handling fee of HKD100 for IPO stock subscription.
1% brokerage, 0.0027% SFC Transaction Levy and 0.005% Hong Kong Stock Exchange Trading Fee.
(The handling fee for IPO stock subscription and the interest accrued and paid on the relevant Loan will not be refunded irrespective of the allotment result or whether the Company is successfully listed or not.)
What account do I need to open for application of IPO financing?
You need to open an integrated account with our Bank for application of IPO financing. For further information, you are welcome to call our Customer Service Hotline 2822 0228 (after choosing your language, please press 6 and then 2) or visit our branches.
How to apply for IPO financing online?
Investment involves risks. Applicant must read and fully understand the Prospectus and other offering documents of the relevant Public Offer prior to apply for IPO financing through Hang Seng Online IPO Application Services.
After reading and accepting the relevant terms
and conditions in Step 2 and 3, logon to Hang Seng Personal e-Banking.
In Step 4, choose the loan type.
Fill in and confirm your application details. Please ensure you have sufficient funds in your payment account to cover the deposit amount plus the bank service charges at the time you submit your application. In case of insufficient funds, the Bank shall have sole discretion to reject your application.
Points to Note
For IPO financing application made through Hang Seng Personal e-Banking, the Bank will notify you by means of an email sent to "Inbox" in Hang Seng Personal e-Banking as to whether or not your IPO financing application has been accepted. You have responsibility for checking for the email.
On the IPO allotment day, any allotted shares and/or refund amount will be paid to you. If the refund amount is not sufficient to settle the loan amount, you must pay interest on the outstanding amount of the loan at the specified unauthorised overdraft interest rate.
On the refund day specified in the relevant prospectus of the IPO stocks * (the Payment Due Day), you must repay the sum payable in respect of the loan in full in one lump sum. If you are unable to repay the loan and the interest accrued on the Payment Due Day, you should deposit the outstanding amount in cash to the payment account of such loan or place selling order with the Bank to sell the subscribed shares before the closing of the morning session of the continuous trading session ("Morning Closing") on the first listing day of the IPO stock for settlement of the outstanding loan and accrued interest. If the sum outstanding under this Loan is not fully repaid and no such sell order is placed or such sell order cannot be executed before the Morning Closing on the First Listing Day, the Bank shall be entitled to, without demand, notice or any other action with respect to you, sell or otherwise dispose of all or some of the subscribed shares on your behalf at any time during the afternoon session of the continuous trading session on the First Listing Day (or at any time the Bank deems expedient) and (if applicable) to cancel or amend (whether in whole or in part) any selling order that you have placed in relation to the subscribed shares that cannot be fully executed before the Morning Closing on the First Listing Day to the extent the Bank considers appropriate or at any time and in any way the Bank deems expedient.
* Refund day is subject to any announcement or subsequently revision by the issuer of the relevant IPO stocks