Margin financing is borrowing from a broker or bank to apply for an IPO. Borrowed money bears interest, and the rate, fees and repayment terms vary by broker or bank and are set out in their notices. It enlarges the application amount and the risk of loss at the same time: if the share price is below the offer price, the investor bears the loss on the principal and also pays interest. The HKMA Supervisory Policy Manual module CR-S-4 governs IPO subscription and share margin financing.
The links above lead to official sources such as HKEX and the SFC. The explanation on this site summarises them and may differ from the official definition; the official documents prevail.
This page explains the HK IPO term "Margin Financing" and links to related terms. Definitions are compiled from HKEX Practice Note 18 and the Listing Rules, for understanding subscription rules only — not investment advice.
