The Company Secretary's Role in a Hong Kong IPO: Responsibilities and Expectations

The Hong Kong IPO pipeline for 2025-2026 is showing a decisive shift in regulatory scrutiny, moving beyond traditional financial disclosures into the operational mechanics of corporate governance itself. The SFC’s 2024 enforcement report, which recorded 194 individual sanctions against listed company directors and officers, a 23% increase year-on-year, signals that the regulator is now actively targeting governance failures that surface during the listing process. For a company preparing for a Main Board or GEM listing, this means the company secretary is no longer a post-listing compliance function. The role has become a critical, pre-IPO gatekeeper whose work begins at the BC (Business Concept) stage, not after the listing date. Any CFO or company secretary who treats the role as a mere administrative box-ticking exercise risks exposing the sponsor and the issuer to enforcement actions under the SFC’s Code of Conduct for Persons Licensed by or Registered with the SFC (the “Code of Conduct”), specifically paragraph 17’s requirements on due diligence. The expectation is now clear: the company secretary must be embedded in the IPO preparation process from Day One, serving as the interface between the sponsor, the board, and the regulatory bodies.

The Pre-Listing Mandate: From BC to A1 Filing

Establishing the Governance Infrastructure Before the Sponsor Engagement

The company secretary’s most consequential work occurs before the formal sponsor engagement begins, often during the BC (Business Concept) stage. At this point, the issuer is typically a BVI or Cayman-incorporated holding company with a Hong Kong operating subsidiary, and the governance structure is often informal. The company secretary must immediately assess whether the board composition complies with HKEX Listing Rules 3.10 and 3.10A, which require at least three independent non-executive directors (INEDs) for a Main Board applicant, with at least one INED possessing appropriate professional qualifications or accounting expertise. The 2024 amendments to the Corporate Governance Code (CG Code), effective from 1 January 2025, further mandate that INEDs must not serve more than nine years on the board, a rule that directly impacts the selection of long-serving directors for the listing applicant.

Beyond board composition, the company secretary must establish the statutory records that will form the backbone of the sponsor’s due diligence. This includes the register of directors and officers, the register of members, and the minutes of all board and committee meetings from the issuer’s incorporation date. The SFC’s 2023 consultation on the sponsor’s role in IPO due diligence explicitly noted that deficiencies in these foundational records were a recurring issue in enforcement cases. The company secretary must ensure that all share transfers, options grants, and changes to the capital structure are properly documented in the Cayman or BVI registers, as any gaps discovered during the A1 filing review will require a formal rectification process that can delay the timeline by two to four weeks.

Managing the Timeline and the Regulatory Calendar

The A1 submission to HKEX is the first major regulatory milestone, and the company secretary is responsible for coordinating the submission of all required documents under the HKEX Listing Rules Chapter 9. This includes the formal application form, the listing document (prospectus) drafts, the sponsor’s due diligence report, and the legal opinions from onshore and offshore counsel. The company secretary must establish a clear regulatory calendar that accounts for the 20-business-day review period for the A1 application, during which the Listing Division will issue comments. The 2024 practice note from the HKEX Listing Division indicated that the average first-round comment letter contains 35-50 specific queries, with a significant portion directed at corporate governance matters such as the independence of INEDs, the existence of a nomination committee, and the adequacy of the internal control systems.

The company secretary must also ensure that the board has formally approved the listing application and that the resolution is recorded in the minutes. This is not a procedural formality. The SFC’s enforcement actions against former directors of China Forestry Holdings in 2022 highlighted that board minutes that failed to record the directors’ consideration of the sponsor’s due diligence findings were used as evidence of inadequate governance. The company secretary must therefore ensure that each board resolution related to the IPO includes a clear record of the directors’ deliberations, the risks discussed, and the basis for their approval.

The Due Diligence Interface: Sponsor, Legal Counsel, and the Board

During the due diligence phase, the company secretary functions as the central liaison between the sponsor, the legal counsel, and the board. The sponsor’s team, under the SFC’s Code of Conduct paragraph 17.6, is required to conduct a reasonable due diligence investigation into the issuer’s business, financial condition, and corporate governance. The company secretary must ensure that the board provides timely and complete responses to the sponsor’s due diligence requests, particularly in areas such as connected transactions, the use of proceeds, and the issuer’s compliance with the Listing Rules’ continuing obligations.

A critical area of focus is the identification and documentation of connected transactions. Under HKEX Listing Rules Chapter 14A, any transaction between the issuer and a connected person must be disclosed and, in certain cases, subject to independent shareholder approval. The company secretary must maintain a comprehensive register of connected persons, which includes directors, substantial shareholders (holding 10% or more), and their associates. The 2023 enforcement case against a GEM-listed company for failing to disclose a connected loan transaction demonstrated that the company secretary’s failure to maintain an accurate register was a contributing factor in the SFC’s decision to issue a public reprimand. The company secretary must therefore work with the sponsor to identify all potential connected parties early in the process, ensuring that the prospectus contains the requisite disclosures under the Listing Rules.

The Prospectus and the Roadshow: The Company Secretary’s Disclosure Role

Drafting and Reviewing the Corporate Governance Section

The prospectus is the primary disclosure document, and the company secretary is directly responsible for drafting the corporate governance section. This section must describe the issuer’s compliance with the CG Code, including the board’s composition, the terms of reference for the audit committee, remuneration committee, and nomination committee, and the issuer’s policy on diversity. The HKEX’s 2024 consultation on board diversity, which proposed a mandatory requirement for at least one director of a different gender on every board, has already been implemented for new listing applicants. The company secretary must ensure that the prospectus explicitly addresses the issuer’s compliance with this requirement, including a timeline for achieving gender diversity if the board does not currently meet the standard.

The company secretary must also review the risk factors section for any governance-related risks. Common areas include the concentration of control in a single controlling shareholder, the potential for conflicts of interest, and the issuer’s reliance on a limited number of key executives. The 2022 SFC enforcement action against the sponsor of a failed IPO highlighted that the prospectus failed to adequately disclose the controlling shareholder’s ability to dominate the board, a deficiency that the SFC attributed to inadequate due diligence by both the sponsor and the issuer’s company secretary. The company secretary must therefore ensure that the risk factors are not boilerplate but are specific to the issuer’s governance structure.

Managing the Due Diligence Meeting and the Roadshow

The due diligence meeting, commonly referred to as the “DD meeting,” is a formal session where the sponsor and the underwriters question the board and senior management about the issuer’s business and governance. The company secretary is responsible for preparing the board for this meeting, which includes ensuring that each director understands their fiduciary duties under the Hong Kong Companies Ordinance (Cap. 622) and the Listing Rules. The company secretary must also prepare a due diligence memorandum that documents the board’s responses to the sponsor’s questions, which will form part of the sponsor’s due diligence record.

The roadshow period, which typically lasts two to three weeks, is the final phase before pricing. The company secretary’s role during this period is to ensure that the board does not inadvertently make any statements that could be construed as forward-looking projections or material non-public information. The SFC’s Code of Conduct paragraph 5.1 prohibits the dissemination of information that is not contained in the prospectus, and the company secretary must monitor all investor presentations and Q&A sessions to ensure compliance. The 2023 SFC enforcement action against a company secretary who allowed a director to disclose unaudited financial projections during a roadshow resulted in a suspension of the company secretary’s license for six months.

The Pricing and Allocation Process

On pricing day, the company secretary must ensure that the board formally approves the final offer price and the allocation of shares. Under HKEX Listing Rules 9.11(30), the final pricing must be confirmed by a board resolution, and the company secretary must record the basis for the price determination, including any reference to the bookbuilding results or the underwriters’ recommendations. The company secretary must also ensure that the allocation of shares to connected persons, including directors and their associates, is properly disclosed in the prospectus and that any allocation to a connected person that exceeds the de minimis threshold under the Listing Rules is approved by the independent shareholders.

The allocation process is a frequent source of regulatory scrutiny. The SFC’s 2024 thematic review of IPO allocations found that 12% of the reviewed offerings involved improper allocations to connected persons, with the company secretary’s failure to maintain an accurate register of connected persons cited as a contributing factor. The company secretary must therefore maintain a real-time register of all allocations and ensure that any allocation to a connected person is flagged for independent shareholder approval before the listing date.

Post-Listing Obligations: The First 12 Months

The Continuing Obligations Under the Listing Rules

The company secretary’s role does not end on the first day of trading. The first 12 months post-listing are the most critical period for establishing the issuer’s compliance culture. Under HKEX Listing Rules Chapter 13, the issuer must file annual and interim reports, disclose notifiable transactions, and maintain a register of directors’ dealings. The company secretary is responsible for ensuring that the board is aware of the disclosure obligations under the Securities and Futures Ordinance (Cap. 571), particularly Part XV’s requirements for the disclosure of substantial shareholdings.

The 2024 SFC enforcement report noted that the most common post-listing violation among newly listed companies was the failure to disclose a notifiable transaction within the required time frame. The company secretary must establish a calendar of all upcoming disclosure obligations, including the deadlines for the annual report (within four months of the financial year-end) and the interim report (within three months of the interim period end). The company secretary must also ensure that the board receives regular training on the Listing Rules, as the SFC’s 2023 consultation on director training proposed mandatory annual training for all directors of listed companies.

The Internal Controls and the Audit Committee

The company secretary is the secretary to the audit committee, which is responsible for overseeing the issuer’s internal controls and financial reporting. Under the CG Code, the audit committee must meet at least twice a year, and the company secretary must prepare the agenda, the minutes, and the supporting papers. The company secretary must also ensure that the audit committee reviews the internal control report, which is a mandatory requirement for all Main Board issuers under the Listing Rules.

The 2024 HKEX consultation on internal controls proposed that issuers must disclose the results of their internal control review in the annual report, a requirement that would place additional demands on the company secretary. The company secretary must work with the internal audit function or the external auditor to ensure that the internal control deficiencies identified during the IPO due diligence are remediated within the first year. The SFC’s enforcement action against a newly listed company in 2023, which resulted in a trading suspension for material internal control failures, demonstrated that the regulator is willing to take immediate action against issuers that fail to address governance deficiencies post-listing.

Managing the Relationship with the Sponsor and the Regulators

The sponsor’s obligations under the SFC’s Code of Conduct extend beyond the listing date. Under paragraph 17.9, the sponsor must retain all due diligence records for at least six years after the listing, and the company secretary must ensure that the issuer maintains its own set of records for the same period. The company secretary is also the primary point of contact for the HKEX’s Listing Division during the first year, responding to any follow-up queries about the listing application or the issuer’s compliance with the Listing Rules.

The 2025 policy paper from the HKEX’s Listing Committee emphasised that the regulator expects the company secretary to play a proactive role in the issuer’s compliance, rather than merely responding to regulatory inquiries. The company secretary must therefore establish a direct line of communication with the Listing Division and ensure that any material changes to the issuer’s governance structure, such as the resignation of an INED or the appointment of a new auditor, are immediately disclosed. The failure to do so can result in a public reprimand, as demonstrated by the 2024 enforcement action against a company secretary who failed to disclose the resignation of the audit committee chairman within the required three business days.

Actionable Takeaways

• The company secretary must be engaged from the BC stage, not after the sponsor is appointed, to establish the governance infrastructure that will satisfy the HKEX’s Listing Rules and the SFC’s Code of Conduct before the A1 filing.
• The company secretary is responsible for maintaining the due diligence record, including the board minutes, the register of connected persons, and the internal control reports, as any deficiencies in these records will be identified during the Listing Division’s review and can delay the listing by two to four weeks.
• The company secretary must ensure that the prospectus’s corporate governance section explicitly addresses the HKEX’s 2024 board diversity requirements and that the risk factors section is specific to the issuer’s governance structure, not generic boilerplate.
• During the roadshow, the company secretary must monitor all investor presentations to ensure that no material non-public information is disclosed, as the SFC’s Code of Conduct paragraph 5.1 prohibits such disclosures.
• Post-listing, the company secretary must establish a compliance calendar for all continuing obligations under the Listing Rules and the Securities and Futures Ordinance, as the first 12 months are the period of highest regulatory scrutiny for newly listed companies.