Chapter 2

Due Diligence Guidelines –

General Principles

4. Materiality

Due diligence procedures are not a comprehensive check of every aspect of a listing applicant’s affairs. Accordingly, an assessment of materiality will guide the design of due diligence procedures in relation to a listing applicant. Further, it would be expected that a selective or sampling approach will be adopted where appropriate when a listing applicant has many like operations, assets or processes.


Information will be material if, having regard to the particular nature of the listing applicant and the securities for which listing is sought, it is necessary to enable an investor to make an informed assessment of the activities, assets and liabilities, financial position, management and prospects of the listing applicant and of its profits and losses and of the rights attaching to such securities.5


5. This is the same as the overriding disclosure standard set by Listing Rule 11.07.


HKCFEF Limited and the contributing law firms, accountants and sponsors are not offering these due diligence guidelines as legal, financial or professional advice or services and they should not be relied upon as such. These due diligence guidelines should not be used as a sole basis for any decision, action or inaction and are not meant to serve as a substitute for the advice of qualified professionals. See here for the full terms and conditions.


Table of contents