Correct: Statement I is correct because the SFC and HKEX emphasize that a prospectus must be written in plain language and organized in a clear, concise manner to ensure it is readable and useful for the investing public. Statement III is correct because the regulatory framework requires the Application Proof (A1 submission) to be in a substantially complete state; if it is not, the regulators have the power to return the application and impose a moratorium on re-submission.

Incorrect: Statement II is incorrect because sponsors cannot delegate their due diligence responsibility entirely to experts; they must critically assess the expert’s work, the underlying assumptions, and the scope of the expert’s engagement. Statement IV is incorrect because the obligation to ensure the market is informed of material information continues through the offer period; if a material change occurs after registration but before the commencement of dealings, a supplemental prospectus or an announcement must be issued.

Takeaway: The sponsor is the primary party responsible for the quality and completeness of the prospectus, ensuring it meets the ‘substantially complete’ threshold at the time of filing and remains accurate until listing. Therefore, statements I and III are correct.

Correct: Statement I is correct because Paragraph 21 of the Code of Conduct requires a CMI to be formally appointed under a written agreement that specifies its roles and responsibilities. Statement III is correct because CMIs are required to take reasonable steps to assess whether investor clients fall within the types of investors targeted in the marketing strategy and should only market to such persons. Statement IV is correct because the Code requires CMIs to install appropriate systems and controls, including effective information barriers (Chinese walls) to separate staff with different functions.

Incorrect: Statement II is incorrect because Paragraph 21 of the Code of Conduct specifically requires CMIs to manage conflicts of interest by giving priority to the orders of investor clients over their own proprietary orders and those of their group companies. Prioritizing proprietary orders to ensure subscription is a violation of these conflict-of-interest requirements.

Takeaway: Under Paragraph 21 of the Code of Conduct, CMIs must ensure formal appointment, adhere to investor targeting strategies, prioritize client orders over proprietary interests, and maintain robust internal information barriers. Therefore, statements I, III and IV are correct.

Correct: The requirement that at least 50% of the minimum independent third-party investment must be sourced from at least three sophisticated investors (such as an asset management firm with AUM of at least HK$8 billion) is a mandatory condition for a De-SPAC transaction to ensure the deal has sufficient institutional support and validation.

Incorrect: The claim that Promoter Warrants must be held in the ring-fenced escrow account is incorrect because the Listing Rules specifically state that the escrow requirement applies to funds raised from SPAC Shares, but does not apply to funds raised from Promoter Shares or Promoter Warrants. The statement regarding the target company’s fair market value being at least 50% of the funds raised is incorrect because the regulatory threshold is actually at least 80%. The assertion that SPAC Promoters may vote on the transaction if they disclose their interest is incorrect because the rules require that persons with a material interest, including Promoters and their close associates, must abstain from voting at the general meeting.

Takeaway: De-SPAC transactions must involve a minimum independent third-party investment from sophisticated investors and ensure that the target company meets specific valuation and shareholder approval standards.

Correct: Statement I is correct because under the SFO, persons under investigation are legally required to provide documents and explanations to the authorized investigator. Statement II is correct because the SFO specifically allows for a statutory declaration to be made when a person lacks the knowledge to answer, provided they state the reasons. Statement IV is correct because the investigator has the power to require evidence to be supported by a statutory declaration.

Incorrect: Statement III is incorrect because while the SFC usually authorizes its employees, it can also authorize other persons to carry out an investigation, provided the consent of the Financial Secretary is obtained.

Takeaway: The SFC possesses broad investigative powers under the SFO, requiring individuals to provide documents, attend interviews, and potentially verify their statements or lack of knowledge through statutory declarations. Therefore, statements I, II and IV are correct.

Correct: Statement I is correct because the Corporate Governance Code requires the board to conduct a formal evaluation of its performance at least every two years. Statement II is correct because the Code specifies that issuers should appoint at least one director of a different gender to the nomination committee to enhance diversity. Statement III is correct because board meetings are required to be held regularly, specifically at least four times a year at approximately quarterly intervals.

Incorrect: Statement IV is incorrect because the Code explicitly states that if a material conflict of interest arises, the matter should be addressed in a formal board meeting with Independent Non-Executive Directors (INEDs) present, rather than being handled through written resolutions.

Takeaway: To ensure robust governance, the board must maintain regular meeting schedules, conduct biennial performance evaluations, and ensure gender diversity within the nomination committee, while strictly managing conflicts of interest through formal board meetings. Therefore, statements I, II and III are correct.

Correct: Statement I is correct because Listing Decisions are published by the SEHK to provide transparency on how the Listing Rules were applied to specific, anonymized cases, serving as a practical reference for similar situations. Statement II is correct because Guidance Letters and Notes are intended to provide general interpretive guidance on specific rules or administrative procedures to the market at large, rather than focusing on a single case. Statement IV is correct because the international placing agreement is typically signed only after the book-building process is complete and the final offer price has been determined.

Incorrect: Statement III is incorrect because the underwriting agreement for the Hong Kong public offer is signed at the commencement of the public offer (at the time the prospectus is issued) to ensure the offer is fully underwritten before the public subscription period begins, whereas the statement incorrectly suggests it is signed after pricing.

Takeaway: Listing Decisions reflect case-specific applications of rules while Guidance Letters provide general interpretations; furthermore, the public offer underwriting agreement is signed at the start of the offer, while the placing agreement is signed after price determination. Therefore, statements I, II and IV are correct.

Correct: Statement I is correct because regulatory standards require that all material information in the listing document must be substantially verified by the time the formal listing application is submitted. Statement III is correct because the SFC Code of Conduct is recognized as providing more detailed requirements for sponsors regarding the use of experts and third parties compared to Practice Note 21 of the Listing Rules.

Incorrect: Statement II is incorrect because sponsors are specifically required to distinguish between the different regulatory requirements that apply to expert versus non-expert roles, even when both roles are performed by the same third party. Statement IV is incorrect because accountants performing internal control reviews are categorized as third parties in a non-expert capacity; only reporting accountants providing the formal accountant’s report are typically treated as experts in the context of the listing document.

Takeaway: Sponsors must ensure verification is substantially complete at the time of application and must carefully distinguish between the regulatory obligations associated with expert and non-expert third-party contributions. Therefore, statements I and III are correct.

Correct: Statement I is correct because the regulatory framework requires the due diligence plan to be documented in a written format, including the methodology and materiality thresholds. Statement III is correct because the plan must establish the standard of care for participants and list the parties involved. Statement IV is correct because commercial due diligence specifically involves an in-depth understanding of the business model, markets, and supplier relationships.

Incorrect: Statement II is incorrect because verifying legal titles and intellectual property ownership is a function of legal due diligence, not commercial due diligence, which focuses on business operations and market position.

Takeaway: Sponsors must maintain a written due diligence plan that defines the scope and methodology of the investigation, ensuring that commercial aspects like business models and market dynamics are thoroughly analyzed. Therefore, statements I, III and IV are correct.

Correct: Statement II is correct because the source text explicitly states that the Listing Rules are approved by the SFC, and the SFC’s approval is also required for any changes to these rules. Statement III is correct because one of the primary aims of the Listing Rules is to ensure that all holders of listed securities are treated fairly and equally to maintain investor confidence.

Incorrect: Statement I is incorrect because Listing Rule 2.04 states that the Listing Rules are not exhaustive, and the SEHK may impose additional requirements or special conditions whenever it considers it appropriate. Statement IV is incorrect because, under LR 2.01, the principal function of the SEHK is to provide a fair, orderly, and efficient market for the trading of securities, not to guarantee the financial performance or profit maximization of listed issuers.

Takeaway: The SEHK Listing Rules, which require SFC approval for any amendments, serve as a non-exhaustive framework intended to maintain a fair and orderly market where all shareholders are treated equitably. Therefore, statements II and III are correct.

Correct: Statement I is correct because Section 40 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (C(WUMP)O) imposes civil liability for untrue statements in a prospectus on persons who authorize its issue. Statement II is correct because Section 384 of the Securities and Futures Ordinance (SFO) makes it a criminal offense to provide false or misleading information to the SFC or the Stock Exchange. Statement III is correct because the Listing Rules mandate a general duty of disclosure, requiring the inclusion of all information necessary for an investor to make an informed assessment of the issuer’s position and prospects.

Incorrect: Statement IV is incorrect because liability under the C(WUMP)O is not restricted to directors; sponsors and other parties who authorize the issue of the prospectus can also be held liable for misstatements.

Takeaway: The disclosure regime for Hong Kong listings is governed by a multi-layered framework of statutory civil and criminal liabilities under the C(WUMP)O and SFO, supplemented by the disclosure standards of the Listing Rules. Therefore, statements I, II and III are correct.

Correct: Statement II is correct because the SFC Code of Conduct and Practice Note 21 emphasize that sponsors must verify the identities of interviewees to ensure the reliability of the information collected. Statement III is correct because the Listing Rules require that the terms of engagement impose an obligation on the listing applicant’s substantial shareholders and senior management to cooperate fully with the sponsor. Statement IV is correct because if a sponsor is unable to receive interview questionnaires or confirmations directly from interviewees, they are required to perform additional due diligence to satisfy themselves regarding the results.

Incorrect: Statement I is incorrect because communication between the sponsor and the listing applicant must be direct and should not be conducted via financial advisers or other consultants; this is essential for the sponsor to discharge its duties properly and maintain absolute authority.

Takeaway: Sponsors must ensure direct communication with the listing applicant and maintain rigorous interview standards, including identity verification and direct confirmation, to ensure the integrity of the due diligence process. Therefore, statements II, III and IV are correct.

Correct: Statement I is correct because the SFC Code of Conduct (Paragraph 17.6(e)) specifically notes that inquiries with persons knowledgeable about the listing applicant’s affairs, such as the controlling shareholder, must be made directly by the sponsor and not through the listing applicant. Statement II is correct because the Code of Conduct requires a sponsor to undertake an inspection of key physical assets, such as production facilities, as part of its independent due diligence steps. Statement III is correct because the Code of Conduct requires a sponsor to review the listing applicant’s internal records and board minutes to assess the integrity, qualifications, and competence of the directors.

Incorrect: Statement IV is incorrect because a sponsor is required to make its own independent inquiries and gain a thorough understanding of the industry and competitors; relying solely on a report provided by the listing applicant without independent verification does not satisfy the requirement for independent due diligence.

Takeaway: Sponsors are mandated to perform direct and independent due diligence, including asset inspections and direct interviews with key stakeholders, to ensure the accuracy of the listing applicant’s disclosures and the suitability of its management. Therefore, statements I, II and III are correct.

Correct: Statement I is correct because the Application Proof must be filed with the Listing Division of the SEHK and posted on the HKEXnews website on the same day without any pre-vetting. Statement IV is correct because Listing Rule 9.03(3A) explicitly requires the new applicant and its directors to ensure the Application Proof is accurate, complete in all material respects, and not misleading or deceptive.

Incorrect: Statement II is incorrect because the blackout on the publication of equity research by underwriters is usually lifted 40 days after listing, not 10 days. Statement III is incorrect because the version of the Application Proof for online publication must be redacted from the version submitted for vetting and must include specific warning and disclaimer statements.

Takeaway: The Hong Kong listing regime emphasizes transparency and accountability by requiring the immediate publication of a redacted Application Proof and holding directors responsible for the quality of the disclosure. Therefore, statements I and IV are correct.

Correct: Statement I is correct because for Main Board issuers, the Listing Rules (LR 3.05) allow for the two authorised representatives to be two directors. Statement III is correct because according to LR Appendix A1, a director of a listed issuer may be removed from office by an ordinary resolution passed in a general meeting.

Incorrect: Statement II is incorrect because while the audit committee must have at least three members, the Listing Rules require only a majority of those members to be independent non-executive directors (INEDs), not all of them. Statement IV is incorrect because for Main Board issuers, the rules explicitly permit the combination of one director and the company secretary to serve as the two authorised representatives.

Takeaway: Listed issuers must adhere to specific governance requirements, including the appointment of two authorised representatives for SEHK communication and the establishment of an audit committee comprised of non-executive directors with an INED majority. Therefore, statements I and III are correct.

Correct: Statement I is correct because the SFC requires sponsors to maintain a comprehensive list of all sponsor work, which must include client names and the specific names, titles, and roles of staff assigned to each project. Statement III is correct because sponsors must document the reasoning and bases for any opinions, assurances, or conclusions reached on key regulatory matters to demonstrate that they have fulfilled their due diligence obligations.

Incorrect: Statement II is incorrect because record-keeping requirements specifically include any variations or changes in the Transaction Team composition throughout the assignment, not just the final structure. Statement IV is incorrect because the Code of Conduct stipulates that records should be kept within the control of the sponsor to ensure they are readily available for SFC inspection and to maintain the firm’s accountability.

Takeaway: Sponsors are required to maintain detailed, up-to-date records under their own control that document both the personnel involved and the substantive rationale for regulatory conclusions to prove compliance with the Code of Conduct. Therefore, statements I and III are correct.

Correct: Statement I is correct because the regulatory framework requires Type 6 licensed representatives to pass LE Paper 16 within a window of three years prior to or six months after their first engagement in sponsor work. Statement II is correct because if the examination is not passed within the six-month grace period, the individual must stop performing sponsor work until they successfully pass. Statement IV is correct because any individual who has been unlicensed or unregistered for a period exceeding three years must retake and pass LE Paper 16 to be eligible for sponsor work again.

Incorrect: Statement III is incorrect because the regulations specifically state that no extension of the six-month period is permitted under any circumstances.

Takeaway: Representatives must pass LE Paper 16 within a strict timeline to engage in sponsor work, and a licensing gap of over three years necessitates a retake of the examination. Therefore, statements I, II and IV are correct.

Correct: The requirement for the Overall Coordinator (OC) Announcement is that it must be published in both English and Chinese on the same date as the filing of the Application Proof. This announcement is intended to identify the OCs and must include appropriate disclaimers and warnings, but it does not require pre-vetting by the SEHK.

Incorrect: The suggestion that the Application Proof should include the offer price and subscription methods is incorrect because the regulations explicitly state that the Application Proof and the OC Announcement must not contain any information about the offering, price, or means to subscribe. The claim that statements regarding media reports require pre-vetting is wrong; while a copy must be submitted to the SEHK before publication, these specific discretionary statements do not need to be pre-vetted. The statement that no further announcement is needed for appointing additional OCs is incorrect because a further OC Announcement is mandatory whenever an overall coordinator is appointed or terminated, and all OCs must be appointed within two weeks of the listing application submission.

Takeaway: Regulatory disclosures during the early stages of a listing application, such as the Application Proof and OC Announcement, must exclude offering details and include specific disclaimers to ensure investors do not make decisions until the final listing document is available.

Correct: When an overseas issuer de-lists from its primary exchange, the SEHK regards it as primary listed on the SEHK from the de-listing date. While the general waivers and modifications associated with a secondary listing normally cease to apply immediately, a specific 12-month grace period is provided for the issuer to comply with requirements regarding the accountants’ report and annual accounts.

Incorrect: The suggestion that waivers continue for three years is incorrect because the Listing Rules state that waivers and modifications normally no longer apply with effect from the de-listing date. The claim that all waivers are terminated without any grace period is wrong because the rules explicitly provide a 12-month window for financial reporting obligations. The idea that the issuer’s listing is automatically suspended for a suitability review is incorrect as the transition is managed through notification and announcement obligations rather than a suspension of trading.

Takeaway: Upon de-listing from its primary exchange, a secondary-listed issuer becomes primary-listed on the SEHK and loses its secondary listing waivers, except for a 12-month grace period for financial reporting.

Correct: Statement I is correct because the Securities and Futures Ordinance (SFO) defines “connected persons” to include those who have a position of access to inside information, such as corporate finance advisers or sponsors. Statement II is correct because the legal definition of “inside information” requires that the information be specific, not generally known to the public, and likely to materially affect the price of the listed securities if it were known. Statement III is correct because the SFO provides a specific defense for corporations if they can demonstrate that an effective information barrier, commonly known as a Chinese wall, was operational between the individuals possessing the inside information and those making the investment decisions.

Incorrect: Statement IV is incorrect because the prohibition on insider dealing explicitly extends to both the listed securities of the corporation and their derivatives; it is not limited solely to the trading of shares.

Takeaway: Under the SFO, insider dealing involves connected persons utilizing non-public, price-sensitive information to trade in securities or derivatives, but firms may utilize a Chinese wall defense to mitigate liability if effective barriers are maintained. Therefore, statements I, II and III are correct.

Correct: The share issuance must not result in the controlling shareholder of the issuer ceasing to be a controlling shareholder is the right answer because the GEM Listing Rules allow for share issuances for complementary asset acquisitions without a mandate for a major transaction, provided that the transaction does not lead to a change in the controlling shareholder’s status.

Incorrect: The option stating the acquisition must be a major transaction is wrong because the rule specifically applies to acquisitions that are NOT major transactions or above (such as discloseable transactions). The option regarding a three-year SFC lock-up is wrong because standard regulatory lock-ups are typically shorter (e.g., 6 to 12 months), and any additional lock-ups are usually a matter of commercial negotiation with global coordinators rather than a fixed statutory rule. The option requiring 75% independent shareholder approval is wrong because this specific type of issuance for a complementary asset acquisition does not trigger such a high approval threshold under the GEM Listing Rules.

Takeaway: GEM issuers are permitted to issue shares for complementary asset acquisitions without triggering major transaction hurdles, provided the controlling shareholder retains their status.

Correct: The sponsor is responsible for ensuring that all appointed experts, including legal advisers and property valuers, are fully aware of the relevant regulatory requirements and that all material information concerning the land resettlement is accurately reflected in the listing document. This is consistent with the requirement that sponsors must satisfy themselves that experts understand their obligations and that the listing document is comprehensive.

Incorrect: The suggestion that the sponsor should conduct valuations and audits independently without relying on experts is incorrect because the Listing Rules and sponsor guidelines specifically envision the use of qualified experts for specialized tasks like property valuation and legal due diligence. The claim that land resettlement is a purely administrative matter outside the scope of Chapter 18 is wrong because such operations are material to the sustainability and legal standing of a mineral company’s business model. The statement regarding the mandatory use of ‘per-pop’ valuation for resettlement is incorrect as ‘per-pop’ is a methodology typically used for telecommunications or internet companies to value subscriber bases, not for land resettlement costs.

Takeaway: Sponsors must ensure that all experts involved in a mineral company’s IPO are aware of the Listing Rule requirements and that all material operational risks, such as land resettlement, are properly disclosed and investigated.

Correct: The inclusion of revenue derived solely from the principal activities of the listing applicant while excluding incidental gains and book transactions is the correct application of the SEHK listing rules. For the Market capitalisation/revenue/cash flow test, the calculation must reflect the core business operations. Specific items like accounting write-backs and barter transactions (book transactions) are excluded because they do not represent actual cash-generating activities from the applicant’s primary business model.

Incorrect: The suggestion that all consolidated revenue, including one-off gains from asset disposals, can be included is wrong because incidental gains are explicitly excluded from the revenue calculation. The claim that book transactions are only excluded if they exceed a specific percentage of total turnover is incorrect as the rules require the exclusion of all such transactions regardless of their size. The idea that the SEHK allows the inclusion of incidental gains if they are part of a recurring investment strategy is false, as the focus remains strictly on revenue from principal activities.

Takeaway: When applying the revenue-based listing tests, sponsors must ensure that only revenue from principal activities is counted, while excluding incidental gains and non-substantive book-keeping transactions.

Correct: Statement I is correct because the SFC and the Stock Exchange emphasize that prospectuses should be written in plain language and be user-friendly for the investing public to facilitate informed decision-making. Statement III is correct because it describes the fundamental disclosure standard required by the Companies (Winding Up and Miscellaneous Provisions) Ordinance and the Listing Rules, ensuring investors have all material facts to make an informed assessment of the issuer’s assets, liabilities, and prospects.

Incorrect: Statement II is incorrect because a sponsor cannot discharge its due diligence obligations by simply pointing to an expert report; they must critically assess the expert’s findings and ensure the underlying assumptions are reasonable and consistent with other information known to the sponsor. Statement IV is incorrect because the ‘Application Proof’ must be ‘substantially complete’ when filed; submitting a document with significant omissions, especially regarding financial data, is a breach of the Listing Rules and will result in the application being returned.

Takeaway: A sponsor’s duty regarding prospectus quality involves both the completeness of material information and the clarity of its presentation, starting from the very first submission to regulators. Therefore, statements I and III are correct.

Correct: The statement that the Listing Rules are not exhaustive and that the SEHK may impose additional requirements is correct because, under LR 2.04, the Exchange maintains the discretion to apply special conditions or further requirements whenever it considers such actions appropriate to ensure a fair and orderly market.

Incorrect: The claim that the Listing Rules are an exhaustive set of regulations is incorrect because the rules explicitly state they are not exhaustive and can be supplemented by the SEHK. The suggestion that the SEHK can amend the Listing Rules independently is wrong because any changes to the rules must be approved by the Securities and Futures Commission (SFC). The idea that the rules are designed to guarantee the future profitability of an issuer is incorrect; the rules focus on ensuring sufficient disclosure and suitability so that investors can make their own informed assessments.

Takeaway: The Listing Rules provide a non-exhaustive framework for market integrity, requiring SFC approval for changes and allowing the SEHK to impose additional conditions to maintain investor confidence.

Correct: The statement regarding the Sponsor’s role in liaising with regulators is correct because, under the regulatory framework for Hong Kong IPOs, the Sponsor acts as the primary channel of communication between the applicant and the regulators, namely the Securities and Futures Commission (SFC) and the Stock Exchange of Hong Kong (SEHK). A Global Coordinator who is not acting as a Sponsor does not have this specific regulatory responsibility.

Incorrect: The claim that only Global Coordinators provide advice on Listing Rules is incorrect because providing such guidance and advice to the applicant is a core duty of the Sponsor. The assertion that Sponsors are prohibited from underwriting is false, as regulations explicitly allow Sponsors to take on additional roles of an underwriting, marketing, or selling nature. The suggestion that Global Coordinators provide the primary assurance of compliance to the SEHK is wrong because the duty to provide general assurance that the applicant complies with the Listing Rules and legal requirements rests with the Sponsor.

Takeaway: While various syndicate members manage the commercial aspects of an IPO, the Sponsor holds unique regulatory duties, including acting as the main point of contact with regulators and providing compliance assurance to the exchange.

Correct: Maintaining a comprehensive due diligence plan that identifies key risks and outlines specific investigative steps, while ensuring the process is supervised by Management, is the right answer because the SFC requires sponsors to have robust systems and controls. This includes documenting the planning and execution of due diligence to demonstrate that the sponsor has exercised reasonable judgment and professional skepticism.

Incorrect: The suggestion that a sponsor can rely entirely on legal counsel’s reports without independent verification is wrong because sponsors have a non-delegable duty to conduct their own due diligence and must critically assess the work of experts. The idea that a due diligence plan only needs to be documented after the listing application is submitted is wrong because the plan must be established at the start of the engagement to guide the investigative process effectively. The claim that Management only needs to review the final prospectus is wrong because regulatory standards require Management (including Principals) to be actively involved in the supervision of the transaction team and the due diligence process throughout the mandate.

Takeaway: A sponsor must maintain effective systems and controls, including a documented due diligence plan and active management supervision, to ensure all material issues regarding a listing applicant are thoroughly investigated.

Correct: The company has not met the requirement of having at least five full financial years of good regulatory compliance on a Qualifying Exchange is the right answer because the regulation for Greater China Issuers without a WVR structure requires a minimum of five full financial years of good regulatory compliance on a Qualifying Exchange to meet Criteria A. Since the issuer has only been listed for four years, it does not satisfy this duration requirement.

Incorrect: The option regarding a HK$25 billion market capitalization is wrong because the actual minimum threshold for Criteria A is HK$3 billion. The statement that a Greater China Issuer is prohibited from using other Qualifying Exchanges for its primary listing is wrong because the regulatory framework allows secondary listings from these exchanges. The claim that the company is a Non-Greater China Issuer based on its Cayman Islands incorporation is wrong because the centre of gravity is determined by the nationality and location of management and operations, not the place of incorporation.

Takeaway: A Greater China Issuer without WVR must demonstrate a five-year track record of regulatory compliance on a Qualifying Exchange and a HK$3 billion market capitalization to qualify under Criteria A.

Correct: Statement I is correct because sponsors are expected to act as an impartial gateway, filtering out unsuitable candidates before they reach the formal listing application stage. Statement II is correct because the integrity of the public capital market relies on the provision of high-quality and complete information to investors as a prerequisite for listing. Statement IV is correct because the regulatory framework recognizes a wide range of stakeholders, including the SEHK market as a whole and potential investors, rather than just the immediate parties to the transaction.

Incorrect: Statement III is incorrect because a sponsor’s duty is not limited to commercial advisory or fee generation; they must balance commercial aspects with regulatory responsibilities and the interests of all market stakeholders to maintain market integrity.

Takeaway: Sponsors must maintain high standards of integrity and ethics, acting as gatekeepers to ensure market quality and protect the interests of all stakeholders, including the investing public and the exchange. Therefore, statements I, II and IV are correct.

Correct: Profit attributable to shareholders of at least HK$35 million for the most recent year and at least HK$45 million in aggregate for the two preceding years is the right answer because these are the specific quantitative thresholds mandated by the SEHK Listing Rules for an applicant to satisfy the Profit Test for a Main Board listing.

Incorrect: The suggestion of HK$20 million for the most recent year and HK$30 million for the preceding years is wrong because these figures fall below the current Main Board requirements. The suggestion of HK$50 million and HK$100 million is wrong because, while a company meeting these would pass, they do not represent the minimum regulatory thresholds required by the rules. The suggestion of HK$35 million for both the most recent year and the aggregate of the two preceding years is wrong because it fails to account for the higher aggregate requirement of HK$45 million for the two preceding years.

Takeaway: To qualify for a Main Board listing via the Profit Test, an issuer must meet a two-tier profit requirement: HK$35 million for the latest year and HK$45 million combined for the two years before that.

Correct: Statement I is correct because regulatory standards require that all material information in the listing document must be substantially verified by the time the listing application is submitted to the regulators. Statement II is correct because the Code of Conduct is identified as the source of more detailed requirements for sponsors regarding the use of experts and third parties compared to Practice Note 21.

Incorrect: Statement III is incorrect because, according to the provided text, lawyers who advise on property titles are generally considered third parties contributing to the non-expert sections of the listing document, whereas expert sections are typically reserved for reports like those from reporting accountants or property valuers. Statement IV is incorrect because the verification process must be conducted efficiently and the timetable must specifically account for the busy schedules and responsibilities of senior management, rather than ignoring these constraints.

Takeaway: Sponsors are responsible for ensuring that material information is substantially verified before submission and must distinguish between the regulatory requirements for expert and non-expert sections of the listing document. Therefore, statements I and II are correct.