Subscribing new shares
There are different application channels for investors to subscribe new shares of an initial public offering (IPO). You may submit the application form, i.e. either the white or yellow form, to your intermediary such as banks or brokerages. Alternatively, you may make application electronically via Electronic Subscription (EIPO) through the Central Clearing and Settlement System (CCASS) or White Form eIPO through designated service providers.
Apart from understanding the fundamentals, business performance, development and risk factors of the issuer, you should read carefully the "How to apply for Hong Kong offer shares" section in the prospectus to know more about the different application channels available and which channel best suits your needs and circumstances.
Different application channels
If you prefer receiving physical shares registered in your own name, you should choose one of the following application channels:
| Channel | How to apply | How to receive the allotted shares and future communications on corporate actions |
| White form | Obtain the white application form at designated banks or brokerages and submit the completed form together with a cheque or a banker's cashier order attached to the receiving bank. | You will receive normally by mail the physical shares in your own name. Then all communications on corporate actions including any entitlements and announcements by the newly listed company will be mailed to you directly in future. When you want to sell the shares on the market, you will have to deliver the share certificates to your brokerage or bank. In general, you may not be able to sell the shares until the shares are deposited into CCASS. Refund cheques will be sent to applicant's address by mail in case your application is wholly or partially unsuccessful. |
| White Form eIPO | A newly listed company may appoint a designated service provider to provide White Form eIPO services. If you fulfil and accept the terms and conditions specified by the service provider, you can submit your application electronically through the designated website. Payment for your application can normally be made using internet banking services of the designated banks and/or PPS payment services. You should refer to the details specified by the service provider. |
Same as application through white form |
Other application channels listed below do not involve delivery of physical share certificates to the investors. The successfully allotted new shares will be deposited into the securities account of your intermediary (brokerage or bank) or your own Investor Account with CCASS and registered in the name of HKSCC Nominees Limited.
| Channel | How to apply | How to receive the allotted shares and future communications on corporate actions |
| Yellow form | Obtain the yellow application form at designated banks or brokerages and submit the completed form together with a cheque or a banker's cashier order attached to the receiving bank. | If you have opened a securities account with your intermediary (brokerage or bank):
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| EIPO | A newly listed company may adopt the EIPO service offered by HKSCC through CCASS. If you have a securities account with your intermediary (a bank or brokerage):
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Same as application through yellow form in terms of receiving the allotted shares and future communications on corporate actions. Refund will be credited to your designated bank account or the designated bank account of your broker in case your application is wholly or partially unsuccessful. |
Important things to note
- Filling the application form
Before you start filling in the application form, read the instructions carefully. Information such as personal particulars, name of all other joint applicants (if any; maximum four joint applicants), the desired number of shares and the total payment must be entered correctly in the form.
The payment amount made in either cheque or cashier's order is the value of shares you subscribe plus the transaction costs, such as SFC transaction levy and SEHK trading fee on the total stock value. You may refer to the payment table on the application form which gives the correct amount to be made for different number of shares based on the offer price. The account name on the cheque or cashier's order must be the same as the name on the application. Some fields on the application form are mandatory and must be filled. All applicants, including the joint applicants, must sign the form. Inaccurate payment amounts, dishonoured cheques, wrongly filled or incomplete forms will be rejected.
You should bear in mind that multiple applications, meaning submitting more than one application form with the same name (or even joint name applications), will be rejected too. - Submitting the application form
If you wish to subscribe through White Form eIPO or your brokerage or bank, please check or enquire about the subscription procedures and the submission deadline beforehand because some White Form eIPOs and individual brokerages or banks may impose an earlier submission deadline. - Selling the allotted shares
White Form and White Form eIPO applications involve delivery of physical share certificates. As the physical share certificates are in the name of the applicants, they need to be deposited into the applicants' securities account with their brokerages or banks before they can be sold on the market. Generally, you may not be able to sell the shares immediately on the first trading day of the new shares until the shares are deposited in CCASS.
On the other hand, if you subscribe the new shares using yellow form or CCASS EIPO, you can normally sell the allotted shares through your brokerages or banks on the first trading day as the successfully allotted shares have already been deposited into CCASS.
Simplification of application forms and prospectuses
To help investors easily grasp the information, the Hong Kong Exchanges and Clearing Limited (HKEX) has guidelines whereby IPO issuers are required to simplify the application form and "How to apply for Hong Kong offer shares" section of the prospectus to make them more concise, easier to read and in plain language.
The application form should use larger font size and should be printed on A3 size paper. The sections about industry overview, business and risk factors in the prospectus should also provide sufficient information and be relevant, concise and written in plain language.
The application form and prospectus of an IPO are available at the designated banks during the offer period. The prospectus is also available on the websites of the issuer and the HKExnews website. Investors interested in subscribing for new shares of an IPO can find the list of designated banks and more information about the application procedures specific to that IPO in the prospectus.
29 Oct 2020
