The stock exchange has proposed lifting the ban on Growth Enterprise Market (GEM) companies issuing new shares within six months of listing, according to a consultation paper.
The proposed rule change followed the collapse of a planned acquisition by GEM-listed Hongkong.com of another Internet venture.
The move is one of a number of amendments to GEM listing rules contained in a consultation paper issued by the stock exchange yesterday.
According to the paper, companies that wanted to issue new shares within six months of listing would have to meet certain conditions.
The new shares would have to be issued for the purpose of funding the acquisition of a business or assets which would enhance the core business of the company, it said.
Also, the share issue should not result in any change in control of the company.
Independent shareholders would have to approve the new share issue, and the issuers would have to hire a financial adviser to advise on whether the acquisition was fair and reasonable to independent shareholders.