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Listing Rules and Guidance: Contents


 
 

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  • The Rules, Interpretation and Guidance

    • Main Board Listing Rules

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      Disclaimer for the Main Board Listing Rules

      HKEx and/or its subsidiaries reserve the copyright over the Listing Rules and reference materials published and updated from time to time on the HKEx website.

      HKEx and/or its subsidiaries endeavour to ensure the accuracy and reliability of the information provided, but do not guarantee its accuracy and reliability and accept no liability (whether in tort or contract or otherwise) for any loss or damage arising from any inaccuracy or omission or from any decision, action or non-action based on or in reliance upon information contained in this website.

      • GENERAL

        • Chapter 1 Interpretation

          For the avoidance of doubt, the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited apply only to matters related to those securities and issuers with securities listed on the stock market operated by the Exchange other than the Growth Enterprise Market ("GEM"). This stock market is defined as the "Main Board" in the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the "GEM Listing Rules"). All matters related to GEM and securities and issuers with securities listed on GEM are governed by the GEM Listing Rules.

          • 1.01

            Throughout these Rules, the following terms, except where the context otherwise requires, have the following meanings:

            A   B   C   D   E   F   G   H   I   J   K   L   M   N   O   P   Q   R   S   T   U   V   W   X   Y   Z

            "accounts" has the same meaning as "financial statements" and vice-versa
            "announcement" announcement published under rule 2.07C and "announce" means make an announcement
            "Application Proof" in the case of a new applicant, a draft listing document that is required to be substantially complete and is submitted to the Exchange together with a listing application form for listing its equity securities under Chapter 9 of the Exchange Listing Rules; in the case of a new CIS applicant with a listing agent appointed which is required to discharge the functions equivalent to those of a sponsor, a draft listing document that is submitted to the Commission together with an application for authorisation of the CIS for the purpose of listing its interests on the Exchange
            "approved share registrar" a share registrar who is a member of an association of persons approved under section 12 of the Securities and Futures (Stock Market Listing) Rules
            "Articles" the Articles of Association of the Exchange
            "asset-backed securities" debt securities backed by financial assets which, at the time of the relevant issues, are evidenced by agreements and intended to produce funds to be applied towards interest payments due on the securities and repayment of principal on maturity, except those debt securities which are directly secured, in whole or in part, on real property or other tangible assets
            "associate" has the meaning in rule 14A.06(2)
            "authorised representative" a person appointed as an authorised representative by a listed issuer under rule 3.05
            "balance sheet" has the same meaning as "statement of financial position" and vice-versa
            "bank" a bank licensed under the Banking Ordinance or a bank incorporated or otherwise established outside Hong Kong which is, in the opinion of the Commissioner of Banking, adequately supervised by an appropriate recognised banking supervisory authority in the place where it is incorporated or otherwise established
            "bearer securities" securities transferable to bearer
            "Board" the Directors of the Exchange elected or appointed in accordance with the Articles and, where the context so permits, any committee or sub-committee thereof
            "business day" any day on which the Exchange is open for the business of dealing in securities
            "CCASS" means the Central Clearing and Settlement System established and operated by HKSCC
            "CIS Disclosure Document" the same meaning as in Chapter 20
            "CIS Operator" the entity which operates or manages the CIS
            "CIS" or "Collective Investment Scheme" the same meaning as in Part I of Schedule 1 to the Securities and Futures Ordinance and includes unit trusts, mutual funds, investment companies and any form of collective investment arrangement
            "chief executive" a person who either alone or together with one or more other persons is or will be responsible under the immediate authority of the board of directors for the conduct of the business of a listed issuer
            "China Accounting Standards for Business Enterprises" or "CASBE" financial reporting standards and interpretations for business enterprises issued by the China Accounting Standards Committee of the China Ministry of Finance
            "China Auditing Standards" or "CAS" standards and interpretations issued by the China Auditing Standards Board of the China Ministry of Finance
            "close associate"
            (a) in relation to an individual means:—
            (i) his spouse;
            (ii) any child or step-child, natural or adopted, under the age of 18 years of the individual or of his spouse (together with (a)(i) above, the "family interests");
            (iii) the trustees, acting in their capacity as trustees, of any trust of which he or any of his family interests is a beneficiary or, in the case of a discretionary trust, is (to his knowledge) a discretionary object; and
            (iv) [Repealed 3 June 2010]
            (v) any company in the equity capital of which he, his family interests, and/or any of the trustees referred to in (a)(iii) above, acting in their capacity as such trustees, taken together are directly or indirectly interested so as to exercise or control the exercise of 30% (or any amount specified in the Takeovers Code as the level for triggering a mandatory general offer) or more of the voting power at general meetings, or to control the composition of a majority of the board of directors and any subsidiary of this company; and
            (b) in relation to a company means:—
            (i) its subsidiary or holding company or a fellow subsidiary of its holding company;
            (ii) the trustees, acting in their capacity as trustees, of any trust of which the company is a beneficiary or, in the case of a discretionary trust, is (to the company's knowledge) a discretionary object; and
            (iii) [Repealed 3 June 2010]
            (iv) any other company in the equity capital of which the company, its subsidiary or holding company, a fellow subsidiary of its holding company, and/or any of the trustees referred to in (b)(ii) above, acting in their capacity as such trustees, taken together are directly or indirectly interested so as to exercise or control the exercise of 30% (or any amount specified in the Takeovers Code as the level for triggering a mandatory general offer) or more of the voting power at general meetings, or to control the composition of a majority of the board of directors and any subsidiary of this other company;
            (c) a depositary acting in its capacity as a depositary for depositary receipts, is not treated as a close associate of holders of the depositary receipts for the purposes of (a) and (b) merely because it is holding the shares of the issuer for the benefit of the holders of the depositary receipts.

            Note: For a PRC issuer, its directors, supervisors, chief executive and substantial shareholders, the definition has the same meaning as in rule 19A.04.
            "Code of Conduct" Code of Conduct for Persons Licensed by or Registered with the Commission
            "Code on Share Buy-backs" or "Share Buy-backs Code" the Code on Share Buy-backs approved by the Commission as amended from time to time
            "Code on Takovers and Mergers" or "Takovers Code" the Code on Takeovers and Mergers approved by the Commission as amended from time to time
            "Commission" the Securities and Futures Commission established under section 3 of the Securities and Futures Commission Ordinance and continuing in existence under section 3 of the Securities and Futures Ordinance
            "Companies Ordinance" the Companies Ordinance (Cap.622) as amended from time to time
            "Companies (Winding Up and Miscellaneous Provisions) Ordinance" the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32) as amended from time to time
            "company" a body corporate wherever incorporated or otherwise established
            "Company Law" the same meaning as in rule 19A.04
            "Compliance Adviser" the same meaning as in rule 3A.01
            "connected person" has the meaning in rule 14A.06(7)

            Note: The definition includes a person deemed to be connected by the Exchange under rule 14A.07(6) only for the purpose of Chapter 14A.
            "controlling shareholder" any person (including a holder of depositary receipts) who is or group of persons (including any holder of depositary receipts) who are together entitled to exercise or control the exercise of 30% (or such other amount as may from time to time be specified in the Takeovers Code as being the level for triggering a mandatory general offer) or more of the voting power at general meetings of the issuer or who is or are in a position to control the composition of a majority of the board of directors of the issuer; or in the case of a PRC issuer, the meaning ascribed to that phrase by rule 19A.14

            provided always that a depositary shall not be a controlling shareholder merely by reason of the fact that it is holding shares of the issuer for the benefit of the holders of depositary receipts
            "convertible debt securities" debt securities convertible into or exchangeable for equity securities or other property, and debt securities with non-detachable options, warrants or similar rights to subscribe or purchase equity securities or other property attached
            "convertible equity securities" equity securities convertible into or exchangeable for shares and shares with non-detachable options, warrants or similar rights to subscribe or purchase shares attached
            "core connected person"
            (a) for a company other than a PRC issuer, or any subsidiary of a PRC issuer, means a director, chief executive or substantial shareholder of the company or any of its subsidiaries or a close associate of any of them; and
            (b) for a PRC issuer means a director, supervisor, chief executive or substantial shareholder of the PRC issuer or any of its subsidiaries or close associate of any of them
            "corporate communication" any document issued or to be issued by an issuer for the information or action of holders of any of its securities or the investing public, including but not limited to:—
            (a) the directors' report, its annual accounts together with a copy of the auditors' report and, where applicable, its summary financial report;
            (b) the interim report and, where applicable, its summary interim report;
            (c) a notice of meeting;
            (d) a listing document;
            (e) a circular;
            (f) a proxy form;
            (g) an Application Proof; and
            (h) a Post Hearing Information Pack or PHIP
            "debt issuance programmes" issues of debt securities where only part of the maximum principal amount or aggregate number of securities under the issue is issued initially and a further tranche or tranches may be issued subsequently
            "debt securities" debenture or loan stock, debentures, bonds, notes and other securities or instruments acknowledging, evidencing or creating indebtedness, whether secured or unsecured and options, warrants or similar rights to subscribe or purchase any of the foregoing and convertible debt securities
            "depositary" the entity appointed and authorised by an issuer to issue or cancel depositary receipts representing the shares of the issuer deposited with that entity
            "depositary receipts" instruments issued by a depositary on behalf or at the request of an issuer which are listed or are the subject of an application for listing on the Exchange and which evidence the interests and rights in shares of the issuer as provided by the deposit agreement executed between the depositary and the issuer
            "director" includes any person who occupies the position of a director, by whatever name called
            "domestic shares" the same meaning as in rule 19A.04
            "Eligible Security" means an issue of securities which is from time to time accepted as eligible by HKSCC for deposit, clearance and settlement in CCASS, in accordance with the General Rules of CCASS, and where the context so requires shall include any particular security or securities of such an issue
            "equity securities" shares (including preference shares and depositary receipts), convertible equity securities and options, warrants or similar rights to subscribe or purchase shares or convertible equity securities, but excluding interests in a Collective Investment Scheme
            "Executive Director — Listing" the person occupying the position of Head of the Listing Division from time to time by whatever name such position is called
            "Exchange" The Stock Exchange of Hong Kong Limited
            "Exchange Listing Rules" or "Listing Rules" or "Rules" the rules governing the listing of securities made by the Exchange from time to time, their appendices, any listing agreement or other contractual arrangement entered into with any party under them, and rulings of the Exchange made under them
            "Exchange Participant" a person: (a) who, in accordance with the Rules of the Exchange, may trade on or through the Exchange; and (b) whose name is entered in a list, register or roll kept by the Exchange as a person who may trade on or through the Exchange
            "Exchange's website" the official website of Hong Kong Exchanges and Clearing Limited and/or the website "HKExnews" which is used for publishing issuers' regulatory information
            "expert" includes engineer, valuer, accountant and any other person whose profession gives authority to a statement made by him
            "family interests" the same meaning as in (a)(ii) of the definition of "close associate"
            "financial statements" has the same meaning as "accounts" and vice-versa
            "financial year" the period in respect of which any profit and loss account of a company laid or to be laid before it in general meeting is made up, whether that period is a year or not
            "foreign shares" the same meaning as in rule 19A.04
            "formal notice" a formal notice required to be published under rules 12.02, 12.03 or 25.16
            "group" the issuer or guarantor and its subsidiaries, if any
            "H Shares" the same meaning as in rule 19A.04
            "HKEC" Hong Kong Exchanges and Clearing Limited
            "HKEx-EPS" means the Exchange's electronic publication system by whatever name such system is called
            "HKSCC" means the Hong Kong Securities Clearing Company Limited including, where the context so requires, its agents, nominees, representatives, officers and employees
            "holding company" in relation to a company, means another company of which it is a subsidiary
            "Hong Kong Financial Reporting Standards" or "HKFRS" financial reporting standards and interpretations issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA"). They comprise (i) Hong Kong Financial Reporting Standards, (ii) Hong Kong Accounting Standards and (iii) Interpretations
            "Hong Kong issuer" an issuer incorporated or otherwise established in Hong Kong
            "Hong Kong register" the same meaning as in rule 19A.04
            "IFA group"
            (a) the independent financial adviser;
            (b) its holding company;
            (c) any subsidiary of its holding company;
            (d) any controlling shareholder of:
            (i) the independent financial adviser; or
            (ii) its holding company; and
            (e) any close associate of any controlling shareholder referred to in paragraph (d)
            "income statement" has the same meaning as "statement of profit or loss and other comprehensive income" and vice-versa
            "inside information" has the meaning defined in the Securities and Futures Ordinance as amended from time to time

            Note: Where the Exchange interprets whether a piece of information is inside information in the context of enforcing the Rules, e.g. rules 10.06(2) and 17.05, it will be guided by decisions of the Market Misconduct Tribunal and published guidelines of the Commission.
            "Inside Information Provisions" Part XIVA of the Securities and Futures Ordinance
            "International Financial Reporting Standards" or "IFRS" financial reporting standards and interpretations approved by the International Accounting Standards Board ("IASB"), and includes all International Accounting Standards ("IAS") and interpretations issued under the former International Accounting Standards Committee ("IASC") from time to time
            "International Standards on Auditing" or "ISA" standards and interpretations issued by the International Auditing and Assurance Standards Board of the International Federation of Accountants
            "issue" includes circulate, distribute and publish
            "issuer" any company or other legal person any of whose equity or debt securities are the subject of an application for listing or some of whose equity or debt securities are already listed, including a company whose shares are represented by depositary receipts that are listed or are the subject of an application for listing but not including the depositary
            "listed issuer"
            (a) in the case of equity securities means any company or other legal person some of whose equity securities are already listed, and with respect to listed depositary receipts, the listed issuer is the company whose shares are represented by the listed depositary receipts but not the depositary; and
            (b) in the case of debt securities means a company or other legal person some of whose equity or debt securities are already listed
            "listing" the grant of a listing of and permission to deal in securities on the Exchange and "listed" shall be construed accordingly
            "Listing Appeals Committee" the listing appeals sub-committee of the Board
            "Listing Committee" the listing sub-committee of the Board
            "Listing Division" the Listing Department of the Exchange
            "listing document" a prospectus, a circular and any equivalent document (including a scheme of arrangement and introduction document) issued or proposed to be issued in connection with an application for listing
            "market capitalisation" the market value of the entire size of an issuer, which shall include all classes of securities of the issuer, irrespective of whether any of such class(es) of securities are unlisted, or listed on other regulated market(s)
            "mutual fund" any corporation which is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or any other property whatsoever, and which is offering for sale or has outstanding any redeemable shares of which it is the issuer
            "new applicant" in the case of equity securities means an applicant for listing none of whose equity securities are already listed and in the case of debt securities means an applicant for listing none of whose equity or debt securities are already listed
            "notifiable transaction" one of the transactions specified in rule 14.06
            "overseas issuer" an issuer incorporated or otherwise established outside Hong Kong
            "overseas listed foreign shares" the same meaning as in rule 19A.04
            "Post Hearing Information Pack" or "PHIP" in the case of a listing of the equity securities of a new applicant, a near-final draft listing document for the listing of equity securities published on the Exchange's website; in the case of a listing of interests in a CIS with a listing agent appointed which is required to discharge the functions equivalent to those of a sponsor, a near-final draft listing document for the listing of interests in the CIS published on the Exchange's website
            "practising accountant" an individual, firm or company qualified for appointment as an auditor or reporting accountant of a company
            "PRC" the same meaning as in rule 19A.04
            "PRC issuer" the same meaning as in rule 19A.04
            "PRC law" the same meaning as in rule 19A.04
            "PRC stock exchange" the same meaning as in rule 19A.04
            "professional accountant" a person registered as a certified public accountant under the Professional Accountants Ordinance
            "profit and loss account" has the same meaning as "statement of profit or loss and other comprehensive income" and vice-versa
            "promoter" the same meaning as in rule 19A.04
            "prospectus" the same meaning as in section 2(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance
            "public" the meaning ascribed to that phrase by rule 8.24 and "in public hands" shall be construed accordingly
            "published in the newspapers" published as a paid advertisement in English in at least one English language newspaper and in Chinese in at least one Chinese language newspaper, being in each case a newspaper published daily and circulating generally in Hong Kong and specified in the list of newspapers issued and published in the Gazette for the purposes of sections 162 to 169 of the Companies Ordinance, and "publish in the newspapers" shall be construed accordingly
            "published on the Exchange's website" published in English and Chinese on the Exchange's website and "publish on the Exchange's website" and "publication on the Exchange's website" shall be construed accordingly
            "Regulations" the same meaning as in rule 19A.04
            "reporting accountant" the professional accountant or practising accountant who is responsible for the preparation of the accountants' report included in a listing document or circular in accordance with Chapter 4
            "Securities and Futures Ordinance" or "SFO" the Securities and Futures Ordinance (Cap. 571) as amended from time to time
            "selectively marketed securities" debt securities marketed to or placed with any number of registered dealers or financial institutions either with a view to their reselling such securities as principals off-market, nearly all of which, because of their nature, will normally be purchased and traded by a limited number of investors who are particularly knowledgeable in investment matters or placing such securities with a limited number of such investors and "selective marketing" shall be construed accordingly
            "SFC Sponsor Provisions" paragraph 17 of the Code of Conduct
            "sponsor" any corporation or authorised financial institution, licensed or registered under the Securities and Futures Ordinance for Type 6 regulated activity and permitted under its licence or certificate of registration to undertake work as a sponsor and, as applicable, which is appointed as a sponsor pursuant to rule 3A.02
            "Sponsors Guidelines" Additional Fit and Proper Guidelines for Corporations and Authorized Financial Institutions applying or continuing to act as Sponsors and Compliance Advisers
            "State" includes any agency, authority, central bank, department, government, legislature, minister, ministry, official or public or statutory person of, or of the government of, a state or any regional or local authority thereof
            "State corporation" any company or other legal person which is directly or indirectly controlled or more than 50% of whose issued equity share capital (or equivalent) is beneficially owned by, and/or by any one or more agencies of, a State or all of whose liabilities are guaranteed by a State or which is specified as such from time to time by the Exchange
            "Statutory Rules" the Securities and Futures (Stock Market Listing) Rules as amended from time to time, the text of which is set out in Appendix 12
            "subsidiary" includes:
            (a) a "subsidiary undertaking" as defined in schedule 1 to the Companies Ordinance;
            (b) any entity which is accounted for and consolidated in the audited consolidated accounts of another entity as a subsidiary pursuant to applicable Hong Kong Financial Reporting Standards or International Financial Reporting Standards; and
            (c) any entity which will, as a result of acquisition of its equity interest by another entity, be accounted for and consolidated in the next audited consolidated accounts of such other entity as a subsidiary pursuant to applicable Hong Kong Financial Reporting Standards or International Financial Reporting Standards
            "substantial shareholder" in relation to a company means a person (including a holder of depositary receipts) who is entitled to exercise, or control the exercise of, 10% or more of the voting power at any general meeting of the company

            provided always that a depositary shall not be a substantial shareholder merely by reason of the fact that it is holding shares of the issuer for the benefit of the holders of depositary receipts

            Note: This definition is modified in the case of Chapter 14A by the provisions of rule 14A.29.
            "summary financial report" a summary financial report of a company, which complies with sections 437 to 446 of the Companies Ordinance
            "Supranational" any institution or organisation at a world or regional level which is specified as such from time to time by the Exchange
            "supervisor" the same meaning as in rule 19A.04
            "tap issues" issues of debt securities where the subscription thereof may continue or further tranches thereof may be issued after listing has been granted
            "temporary documents of title" allotment letters, letters of allocation, split receipts, letters of acceptance, letters of rights, renounceable share certificates and any other temporary documents of title
            "trading halt" an interruption of trading in an issuer's securities requested or directed pending disclosure of information under the Rules and extending for no more than two trading days

            Note: Where a trading halt exceeds two trading days, it will automatically become a trading suspension.
            "unit trust" any arrangement made for the purpose, or having the effect, of providing facilities for the participation by persons, as beneficiaries under a trust, in profits or income arising from the acquisition, holding, management or disposal of securities or any other property whatsoever

          • 1.02

            In these Exchange Listing Rules, references to a document being certified shall mean certified to be a true copy or extract (as the case may be) by a director, the secretary or other authorised officer of the issuer (or by a member of its governing body in the case of an overseas issuer) or by a member of the issuer's auditors or solicitors or by a notary and references to a translation being certified shall mean certified to be a correct translation by a professional translator.

          • 1.03

            Where the context so permits or requires, words importing the singular number include the plural and vice versa and words importing the masculine gender include the feminine and neuter genders and vice versa.

          • 1.04

            Where definitions in these Exchange Listing Rules are wider than or the obligations and requirements imposed by these Exchange Listing Rules are more onerous than the provisions of any ordinance, regulation or other statutory provision from time to time in force in Hong Kong, the provisions of these Exchange Listing Rules shall prevail provided that where any provision of these Exchange Listing Rules is in conflict with the provisions of any such ordinance, regulation or other statutory provision, the provisions of such ordinance, regulation or other statutory provision shall prevail.

          • 1.05

            Where, for the purposes of these Exchange Listing Rules, it is necessary to determine whether an issuer's primary listing is or is to be on the Exchange or another stock exchange, such determination shall be made by the Exchange.

          • 1.06

            These Exchange Listing Rules shall be interpreted, administered and enforced by the Exchange. The decisions of the Exchange shall be conclusive and binding on an issuer. The Exchange may issue practice notes, guidance notes, and other guidance materials on the Exchange's website, including guidance letters, listing decisions and other publications on the Exchange's website from time to time, to assist issuers and guarantors, in the case of a guaranteed issue, or their advisers in interpreting and complying with these Exchange Listing Rules.

          • 1.07

            These Exchange Listing Rules have been issued in the English language with a separate Chinese language translation. If there is any conflict in the Exchange Listing Rules between the meaning of Chinese words or terms in the Chinese language version and English words in the English language version, the meaning of the English words shall prevail.

        • Chapter 2 Introduction

          • Preliminary

            • 2.01

              The principal function of the Exchange is to provide a fair, orderly and efficient market for the trading of securities. In furtherance of this, the Exchange has made the Exchange Listing Rules under section 23 of the Securities and Futures Ordinance prescribing the requirements for the listing of securities on the Exchange. These comprise both requirements which have to be met before securities may be listed and also continuing obligations with which an issuer and, where applicable, a guarantor must comply once listing has been granted. The Exchange Listing Rules have been approved by the Commission pursuant to section 24 of that Ordinance.

            • 2.02

              The purpose of this book is to set out and explain those requirements.

            • 2.02A

              The Exchange Listing Rules shall not apply to Options Contracts traded through the Options System as defined in the Options Trading Rules of the Exchange and the Clearing Rules of The SEHK Options Clearing House Limited. The Traded Options Committee of the Exchange is primarily responsible for the supervision and regulation of the options market. Interested parties are directed to the Options Trading Rules of the Exchange and the Clearing Rules of The SEHK Options Clearing House Limited, as from time to time in effect.

          • General Principles

            • 2.03

              The Listing Rules reflect currently acceptable standards in the market place and are designed to ensure that investors have and can maintain confidence in the market and in particular that:—

              (1) applicants are suitable for listing;
              (2) the issue and marketing of securities is conducted in a fair and orderly manner and that potential investors are given sufficient information to enable them to make a properly informed assessment of an issuer and, in the case of a guaranteed issue, the guarantor and of the securities for which listing is sought;
              (3) investors and the public are kept fully informed by listed issuers and, in the case of a guaranteed issue, the guarantors of material factors which might affect their interests;
              (4) all holders of listed securities are treated fairly and equally;
              (5) directors of a listed issuer act in the interests of its shareholders as a whole — particularly where the public represents only a minority of the shareholders; and
              (6) all new issues of equity securities by a listed issuer are first offered to the existing shareholders by way of rights unless they have agreed otherwise.

              In these last four respects, the rules seek to secure for holders of securities, other than controlling interests, certain assurances and equality of treatment which their legal position might not otherwise provide.

            • 2.04

              It is emphasised that the Exchange Listing Rules are not exhaustive and that the Exchange may impose additional requirements or make listing subject to special conditions whenever it considers it appropriate. Conversely, the Exchange may waive, modify or not require compliance with the Exchange Listing Rules in individual cases (to suit the circumstances of a particular case), as a variety of circumstances may exist which require it to make ad hoc decisions. However, any waiver or modification of, or decision not to require compliance with, a rule, which is intended to have general effect (i.e. to affect more than one issuer and its subsidiaries at the same time) may only be granted with the prior consent of the Commission. The Exchange will not grant an individual waiver or modification of a rule, or agree not to require compliance with a rule, on a regularly recurring basis so as to create the same result as a general waiver. Consequently, both new applicants and listed issuers and, in the case of a guaranteed issue, guarantors are encouraged to seek informal and confidential guidance from the Exchange at all times.

            • 2.05

              These Exchange Listing Rules may be amended by the Exchange from time to time, subject to the approval of the Commission under section 24 of the Securities and Futures Ordinance.

            • 2.06

              Suitability for listing depends on many factors. Applicants for listing should appreciate that compliance with the Exchange Listing Rules may not of itself ensure an applicant's suitability for listing. The Exchange retains a discretion to accept or reject applications and in reaching their decision will pay particular regard to the general principles outlined in rule 2.03. Prospective issuers (including listed issuers) are therefore encouraged to contact the Exchange to seek informal and confidential guidance as to the eligibility of a proposed application for listing at the earliest possible opportunity.

          • Delivery of Information and Documents

            • 2.07

              (1) The procedures regarding the delivery of information and documents under the Exchange Listing Rules shall be determined by the Exchange from time to time and promulgated by way of a practice note to the Exchange Listing Rules.

              Note: See Practice Note 1
              (1A) Where the Exchange Listing Rules require a certain number of copies of a document to be sent or submitted to the Exchange, the Exchange may require the issuer to provide the Exchange with such lesser or greater number of such copies as the Exchange may reasonably determine.
              (2) The Exchange may publish, release or present on the Exchange's website or in any other form or context and to whomsoever the Exchange deems necessary or appropriate for the purposes specified below any information provided by or on behalf of any listed issuer or new applicant to the Exchange, whether pursuant to any obligation of such listed issuer or new applicant under the Exchange Listing Rules to publish such information or otherwise, and without liability on the part of the Exchange. In addition, the Exchange may impose a fee for access to or use of such public information so published, released or presented, and such listed issuer or new applicant shall be deemed to have waived any right to receive any fee or other remuneration from the Exchange in respect of such access or use. The purposes for which the Exchange may so publish, release or present such information are as follows:—
              a) to provide a means of easy access by the investing public to such information;
              b) for the promotion of the Exchange;
              c) in connection with the compilation of statistical and other information on listed issuers and new applicants;
              d) investor awareness and education; or
              e) to preserve the general integrity and reputation of the market.
              (3) For the avoidance of doubt, nothing in the Exchange Listing Rules shall be construed as imposing upon the Exchange an obligation to publish on the Exchange's website any document or communication other than as expressly provided in these Exchange Listing Rules.

          • Use of Electronic Means

            • 2.07A

              (1) Subject to the provisions set out in this rule 2.07A, any requirement in these Exchange Listing Rules for a listed issuer to send, mail, dispatch, issue, publish or otherwise make available any corporate communication may, to the extent permitted under all applicable laws and regulations and the listed issuer's own constitutional documents, be satisfied by the listed issuer sending or otherwise making available the corporate communication to the relevant holders of its securities using electronic means and any requirement in these Exchange Listing Rules that a corporate communication of a listed issuer must be in printed form may be satisfied by the corporate communication being in electronic format.
              (2) Other than as permitted under rule 2.07A(2A) in relation to a corporate communication published on the listed issuer's own website pursuant to rule 2.07C(6), the corporate communication may be sent or otherwise made available by the listed issuer to a holder of its securities using electronic means (which term includes sending or otherwise making available the corporate communication to the holder in electronic format) only where the listed issuer has previously received from that holder an express, positive confirmation in writing that the holder wishes to receive or otherwise have made available to the holder the corporate communication by the means and in the manner proposed by the listed issuer.
              (2A)
              (a) To the extent that:
              (i) the shareholders of the listed issuer have resolved in general meeting that the listed issuer may send or supply corporate communications to shareholders by making them available on the listed issuer's own website; or
              (ii) the listed issuer's constitutional documents contain provision to that effect,
              a holder of the listed issuer's securities in relation to whom the following conditions are met is taken to have agreed that the listed issuer may send or supply corporate communications to him in that manner.
              (b) The conditions are that:
              (i) the holder has been asked individually by the listed issuer to agree that the listed issuer may send or supply corporate communications generally, or the corporate communication in question, to him by means of the listed issuer's own website; and
              (ii) the listed issuer has not received a response indicating the holder's objection within the period of 28 days beginning with the date on which the listed issuer's request was sent.
              (c) A holder is not taken to have so agreed if the listed issuer's request:
              (i) did not state clearly what the effect of a failure to respond would be; or
              (ii) was sent less than 12 months after a previous request made to him for the purposes of this rule 2.07A(2A) in respect of the same class of corporate communications.
              (d) The listed issuer must notify the intended recipient of:
              (i) the presence of the corporate communication on the website;
              (ii) the address of the website;
              (iii) the place on the website where it may be accessed; and
              (iv) how to access the corporate communication.
              (e) The corporate communication is taken to be sent:
              (i) on the date on which the notification required under rule 2.07A(2A)(d) is sent; or
              (ii) if later, the date on which the corporate communication first appears on the website after that notification is sent.
              (3) A listed issuer which, availing itself of this rule 2.07A, sends or otherwise makes available a corporate communication to holders of its securities using electronic means must:
              (a) afford holders the right at any time by reasonable notice in writing served on the listed issuer to change their choice (whether by positive consent or deemed consent under rule 2.07A(2A)) as to whether they wish to receive corporate communications in printed form or using electronic means. The listed issuer must set out in each such corporate communication the steps for notifying the listed issuer of any such change together with a statement expressly informing holders that:
              (i) holders may at any time choose to receive corporate communications either in printed form or using electronic means; and
              (ii) holders who have chosen (or are deemed under rule 2.07A(2A) to have chosen) to receive the corporate communication using electronic means and who for any reason have difficulty in receiving or gaining access to the corporate communication will promptly upon request be sent the corporate communication in printed form free of charge; and
              (b) without prejudice to their right to use any other written means of communication for such purpose, provide holders of its securities with the option of notifying the listed issuer by email of any change in their choice as to whether they wish to receive corporate communications in printed form or using electronic means or of any request to receive the corporate communication in printed form. The listed issuer must provide holders of its securities with an email address for this purpose.
              Note: It is the sole responsibility of the listed issuer to ensure that any proposed arrangement is permitted under, and that the listed issuer will at all times comply with, all applicable laws and regulations and the listed issuer's own constitutional documents.

            • 2.07B

              (1) Any requirement in these Exchange Listing Rules for a listed issuer to send, mail, dispatch, issue, publish or otherwise make available any corporate communication in both English and Chinese may, where the listed issuer has made adequate arrangements to ascertain whether or not a holder of its securities wishes to receive the English language version only or the Chinese language version only and to the extent permitted under applicable laws and regulations and the listed issuer's own constitutional documents, be satisfied by the listed issuer sending the English language version only or the Chinese language version only (in accordance with the holder's stated wish) to the holder concerned. Any arrangement by the listed issuer to ascertain a holder's wish must afford the holder the choice of receiving the English language version only, the Chinese language version only or both the English language version and the Chinese language version.
              (2) A listed issuer which, availing itself of this rule 2.07B, sends the English language version only or the Chinese language version only of a corporate communication to holders of its securities must afford holders the right at any time by reasonable notice in writing served on the listed issuer to change their choice as to whether they wish to receive the English language version only, the Chinese language version only or both the English language version and the Chinese language version. The listed issuer must set out in each such corporate communication the steps for notifying the listed issuer of any such change together with a statement expressly informing holders that they may at any time choose to receive the English language version only, the Chinese language version only or both the English language version and the Chinese language version notwithstanding any wish to the contrary previously conveyed to the listed issuer.

              Note: By way of an example and without prejudice to the generality of the above, the Exchange will normally regard as adequate an arrangement along the following lines:
              (1) A letter, together with a pre-paid reply form (the "First Letter") in both English and Chinese, is sent by the listed issuer to holders of its securities to enable them to select either an English language version or a Chinese language version or both versions of the corporate communication. The First Letter clearly explains the consequential arrangement (see (3) below) if no reply is received from such holders by a certain date (the "Deadline").
              (2) The listed issuer sends the selected language version of the corporate communication to those holders who have made a selection.
              (3) If no reply is received on or before the Deadline, the following arrangements apply, where applicable :—
              (a) the English language version of the corporate communication is sent to: (i) all overseas holders; and (ii) all Hong Kong holders other than natural persons with a Chinese name; and
              (b) the Chinese language version of the corporate communication is sent to all Hong Kong holders who are natural persons with a Chinese name.
              Whether a holder is a Hong Kong or an overseas person will be determined by his or its address as appearing in the listed issuer's register of securities holders.
              (4) When the corporate communication is sent out according to the arrangements set out in (3) above, a letter, together with a pre-paid request form (the "Second Letter") in both English and Chinese, is attached to or printed at some prominent place in the sent out versions of the corporate communication stating that the corporate communication prepared in the other language will be available upon request.
              (5) Both the English language version and the Chinese language version of the corporate communication is made available on the listed issuer's website in an accessible format and a copy in electronic format of the corporate communication in both languages is submitted to the Exchange in accordance with the publication requirements of rule 2.07C(1)(b)(i).
              (6) The listed issuer provides a dial-up hotline service or other equivalent public communication channel acceptable to the Exchange to enable holders to make enquiry of the listed issuer's proposed arrangements.
              (7) The First Letter and the Second Letter mention that the corporate communication will be available in both languages on the listed issuer's website and a dial-up hotline service or other equivalent public communication channel will be provided as mentioned in (5) and (6) respectively.
              (8) The listed issuer makes an announcement in accordance with rule 2.07C stating the proposed arrangements at the same time as the First Letter is dispatched to holders.

            • 2.07C

              (1)
              (a)
              (i) A listed issuer or a new applicant which is obliged to publish for the purposes of the Exchange Listing Rules any announcement or notice must submit through HKEx-EPS a ready-to-publish electronic copy of the document to the Exchange for publication on the Exchange's website.

              Note: Regard must be had to the operating hours of HKEx-EPS from time to time.
              (ii) In the case of a new applicant, a written confirmation to the Exchange from each of the sponsors, confirming that the announcement or notice has been cleared by the Exchange (where such clearance is required under the Exchange Listing Rules) or that the document is required to be published by the new applicant (where such clearance is not so required), must be received by the Exchange prior to the announcement or notice being submitted through HKEx-EPS for publication.
              (iii) All announcements or notices which are published in the newspapers by an issuer pursuant to these Exchange Listing Rules must state that it is available for viewing on the Exchange's website and the issuer's own website giving details as to where on these websites it is to be found (to the fullest extent known at the time of publication of the announcement or notice).
              (iv) Where a listed issuer requests a trading halt or suspension of trading in its securities and the trading halt or suspension has been effected, the listed issuer must immediately submit through HKEx-EPS to the Exchange for publication on the Exchange's website a ready-to-publish electronic copy of an announcement informing that trading in the securities of the listed issuer has been halted or suspended and setting out briefly the reason for the trading halt or suspension.
              (b)
              (i) Other than where a prospectus is to be registered under the Companies (Winding Up and Miscellaneous Provisions) Ordinance, a listed issuer or new applicant must submit to the Exchange through HKEx-EPS for publication on the Exchange's website a ready-to-publish electronic copy of any corporate communication which is required by the Exchange Listing Rules (including any listing document of a listed issuer or new applicant which is not to be registered under the Companies (Winding Up and Miscellaneous Provisions) Ordinance). The electronic copy must be received by the Exchange before the day on which it is sent to shareholders by the listed issuer or distributed to the public in the case of a new applicant.
              (ii) Where a prospectus is to be registered under the Companies (Winding Up and Miscellaneous Provisions) Ordinance, the listed issuer or new applicant must submit to the Exchange through HKEx-EPS for publication on the Exchange's website a ready-to-publish electronic copy of each of the prospectus and any application forms. The copies must be submitted to the Exchange at the same time as they are sent to shareholders by the listed issuer or, in the case of a new applicant, their distribution to the public commences. They must be submitted only after the issuer has received the letter from the Companies Registry confirming registration of the prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance. The issuer must also promptly submit a copy of the letter to the Exchange for its records.
              Note: Issuers must accordingly bear in mind the time required to comment on and clear the form of any document so as to be able to submit the ready-to-publish electronic copy to the Exchange by the stipulated deadline.
              (2) All electronic copies of documents submitted by an issuer through HKEx-EPS to the Exchange for publication on the Exchange's website must be virus-free with all words being text-searchable and the document printable. The layout and contents of each page on the electronic copy of the documents submitted to the Exchange for publication on the Exchange's website must be the same as the layout and contents of the corresponding page of the document as published by the issuer (whether in the newspapers, on its own website, as sent to shareholders or otherwise).
              (3) When submitting a document through HKEx-EPS for publication on the Exchange's website, the issuer must select all such headlines as may be appropriate from the list of headlines set out in Appendix 24 (which is also displayed in HKEx-EPS) and input into the designated free-text field in HKEx-EPS the same title as appears in the document. The Listing Committee has delegated to the Executive Director — Listing the power to approve such amendments to Appendix 24 as he may consider necessary or desirable.
              (4)
              (a) Announcement or notice must not be published on the Exchange's website:
              -   between 8:30 a.m. and 12:00 noon and between 12:30 p.m. and 4:30 p.m. on a normal business day; and
              -   between 8:30 a.m. and 12:30 p.m. on the eves of Christmas, New Year and the Lunar New Year when there is no afternoon session,
              except for:
              (i) [Repealed 10 March 2008];
              (ii) announcements made solely under rule 2.07C(1)(a)(iv);
              (iii) announcements made solely under rule 13.10B, or paragraph 2(2) of Parts C, D, E or H of Appendix 7;
              (iv) announcements made in response to the Exchange's enquiries of the issuer under rule 13.10, or paragraph 24 of Part C of Appendix 7, paragraph 11 of Part G of Appendix 7, or paragraph 26 of Part H of Appendix 7 if in the announcement the issuer only provides the negative confirmations required under rule 13.10(2), or paragraph 24(2) of Part C of Appendix 7, or paragraph 11 of Part G of Appendix 7, or paragraph 26(2) of Part H of Appendix 7, or refers to its previously published information;
              (v) announcements made in response to media news or reports under rule 13.09(1), paragraph 2(1)(b) of Part C, D, E or H of Appendix 7 or paragraph 4(3) of Part G of Appendix 7 if in the announcement the issuer only denies the accuracy of such news or reports and/or clarifies that only its previously published information should be relied upon; and
              (vi) announcements relating to suspension and resumption of a Mixed Media Offer applicable to public offers of equity securities, CIS and debt securities (see rules 12.11A, 20.19A and 25.19B).
              (b) Any publication by an issuer pursuant to this rule 2.07C must be made in both the English and Chinese language unless otherwise stated.
              (c) Subject to rule 2.07C(4)(d), where a document is required to be published in both the English and Chinese language, the issuer must submit the ready-to-publish electronic copy of both the English and Chinese versions of that document together to the Exchange for publication on the Exchange's website.
              (d) In the case of the English and Chinese versions of a listing document or annual report submitted by an issuer to the Exchange for publication on the Exchange's website, the issuer must submit the ready-to-publish electronic copy of one version immediately after submission of the other version.
              (5) Issuers must comply with such requirements as the Exchange may from time to time determine and promulgate with regard to format, timing, procedure or otherwise for publication and submission of documents to the Exchange.

              Note: The Exchange accepts no responsibility for any defects in the content or format of any document submitted for publication on the Exchange's website and accepts no responsibility for any delay or failure in publication. It is the sole responsibility of the issuer to ensure that all material submitted by it or on its behalf for publication on the Exchange's website is accurate.
              (6)
              (a) Every issuer must have its own website on which it must publish any announcement, notice or other document published under rule 2.07C on the Exchange's website. The publication should be at the same time as publication of the electronic copy of the document on the Exchange's website. A new listing applicant is not required to publish an Application Proof or Post Hearing Information Pack on its own website. In any event:
              (i) where the electronic copy of the document is published after 7:00 p.m. on the Exchange's website, publication on the issuer's own website must not be later than 8:30 a.m. on the business day next following such publication; and
              (ii) where the electronic copy of the document is published at any other time on the Exchange's website, publication on the issuer's own website must not be later than 1 hour after such publication.
              Note: The issuer's website does not need to be hosted on a domain owned or maintained by the issuer. The issuer's website may be hosted on a third-party domain so long as the website is assigned a dedicated location on the Worldwide Web and the issuer's website may be managed by a third-party on behalf of the issuer.
              (b) The issuer must ensure that any document published on its website pursuant to these Exchange Listing Rules remains available on its website on a continuous basis for at least 5 years from the date of first publication. The public must be able to access these documents on the website free of charge.
              (c) [Repealed 1 January 2013]

          • Structure

            • 2.08

              The Exchange Listing Rules fall into four main parts: Chapters 16 set out matters of general application; Chapters 719A set out the requirements applicable to the issue of equity securities; Chapters 20 and 21 set out the requirements applicable to unit trusts, mutual funds and other investment companies; and Chapters 2237 set out the requirements applicable to the issue of debt securities.

          • Sponsors

            • 2.09

              A new application for listing, in the case of equity securities, must be sponsored as more fully explained in Chapter 3A.

            • 2.10

              In the first instance, all matters concerning an application for listing by a new applicant must be dealt with between the Exchange and the new applicant and its sponsor.

          • Authorised Representatives

            • 2.11

              Every listed issuer must appoint and retain at all times two authorised representatives as more fully explained in Chapter 3.

          • Listing Fees and Other Charges

            • 2.12

              The details of the initial listing fee, annual listing fee, subsequent issue fee and other charges together with details of the brokerage charge, transaction levies and trading fees on new issues are set out in Appendix 8.

          • Information Gathering

            • 2.12A

              An issuer must provide to the Exchange as soon as possible, or otherwise in accordance with time limits imposed by the Exchange:

              (1) any information that the Exchange reasonably considers appropriate to protect investors or ensure the smooth operation of the market; and
              (2) any other information or explanation that the Exchange may reasonably require for the purpose of investigating a suspected breach of or verifying compliance with the Exchange Listing Rules.

          • Presentation of Information

            • 2.13

              Without prejudice to any specific requirements of the Exchange Listing Rules as to content or responsibility for the document in question, any announcement or corporate communication required pursuant to the Exchange Listing Rules must be prepared having regard to the following general principles:

              (1) the information contained in the document must be clearly presented and in the plain language format specified or recommended by the Exchange and/or the Commission from time to time; and
              (2) the information contained in the document must be accurate and complete in all material respects and not be misleading or deceptive. In complying with this requirement, the issuer must not, among other things:—
              (a) omit material facts of an unfavourable nature or fail to accord them with appropriate significance;
              (b) present favourable possibilities as certain or as more probable than is likely to be the case;
              (c) present projections without sufficient qualification or explanation; or
              (d) present risk factors in a misleading way.

            • 2.14

              Any listing document, circular or announcement issued by an issuer pursuant to the Exchange Listing Rules must disclose the name of each director as at the date of the relevant listing document, circular or announcement.

          • Material interest in a transaction

            • 2.15

              Where a transaction or arrangement of an issuer is subject to shareholders' approval under the provisions of the Exchange Listing Rules, any shareholder that has a material interest in the transaction or arrangement shall abstain from voting on the resolution(s) approving the transaction or arrangement at the general meeting.

              Note: For the avoidance of doubt, any provision in the Exchange Listing Rules requiring any other person to abstain from voting on a transaction or arrangement of an issuer which is subject to shareholders' approval shall be construed as being in addition to the requirement set out in rule 2.15.

            • 2.16

              For the purpose of determining whether a shareholder has a material interest, relevant factors include:

              (1) whether the shareholder is a party to the transaction or arrangement or a close associate of such a party; and
              (2) whether the transaction or arrangement confers upon the shareholder or his close associate a benefit (whether economic or otherwise) not available to the other shareholders of the issuer.

              There is no benchmark for materiality of an interest nor may it necessarily be defined in monetary or financial terms. The materiality of an interest is to be determined on a case by case basis, having regard to all the particular circumstances of the transaction concerned.

              Note: The references to "close associate" shall be changed to "associate" where the transaction or arrangement is a connected transaction under Chapter 14A.

            • 2.17

              The issuer must, to the extent that it is aware having made all reasonable enquiries, include in the listing document or circular:

              (1) a statement as at the date by reference to which disclosure of the shareholding is made in the listing document or circular as to whether and to what extent any shareholder who is required to abstain from voting under the Exchange Listing Rules controls or is entitled to exercise control over the voting right in respect of his shares in the issuer;
              (2) particulars of:
              (a) any voting trust or other agreement or arrangement or understanding (other than an outright sale) entered into by or binding upon any such shareholder; and
              (b) any obligation or entitlement of any such shareholder as at the date by reference to which disclosure of the shareholding of any such shareholder is made in the listing document or circular,
              whereby he has or may have temporarily or permanently passed control over the exercise of the voting right in respect of his shares in the issuer to a third party, either generally or on a case-by-case basis;
              (3) a detailed explanation of any discrepancy between any such shareholder's beneficial shareholding interest in the issuer as disclosed in the listing document or circular and the number of shares in the issuer in respect of which he will control or will be entitled to exercise control over the voting right at the relevant meeting; and
              (4) steps undertaken by the shareholder (if any) to ensure shares being the subject of the discrepancy referred to in rule 2.17(3) are not voted.

            • 2.17A [Repealed]

              [Repealed 1 January 2013]

        • Chapter 2A Composition, Powers, Functions and Procedures of the Listing Committee, the Listing Appeals Committee and the Listing Division

          • General

            • 2A.01

              The Board has arranged for all of its powers and functions in respect of all listing matters to be discharged by the Listing Committee and/or its delegates, subject to the review procedures set out in this Chapter. Any function which under the Exchange Listing Rules may be performed by the Exchange or any power which under the Exchange Listing Rules may be exercised by the Exchange may, therefore, be performed or exercised by the Listing Committee and/or its delegates. Accordingly, the Listing Committee and, in relation to certain powers of review, the Listing Appeals Committee have sole power and authority to act in relation to all listing matters to the exclusion of the Board, unless and until the Board revokes these arrangements.

            • 2A.02

              The Listing Committee has arranged for most of these powers and functions to be discharged by the Listing Division and the Chief Executive of the Exchange, subject to the reservations and review procedures set out in this Chapter. In the first instance, therefore, all matters concerning the Exchange Listing Rules will be dealt with by the Listing Division. The Listing Division will also interpret, administer and enforce the Exchange Listing Rules subject to the review procedures set out in this Chapter.

            • 2A.03

              In discharging their respective functions and powers the Listing Appeals Committee, the Listing Committee, the Listing Division and the Chief Executive of the Exchange are required to administer the Exchange Listing Rules, and otherwise to act, in the best interest of the market as a whole and in the public interest.

            • 2A.04

              All references in Chapters 2A and 2B to decisions and rulings of the "Listing Division" include decisions and rulings made by the Chief Executive of the Exchange.

          • Application Procedures

            • New Applicants (2A.05-2A.05B)

              • 2A.05

                Subject to rule 2A.05A and rule 2A.05B, every application for listing (including a transfer of listing from GEM to the Main Board) by a new applicant should be submitted to the Listing Division which may reject it or recommend it. However, the Listing Committee has reserved to itself the power to approve all applications for listing (including transfer of listing from GEM to the Main Board) from a new applicant and this means that even if such an application is recommended by the Executive Director — Listing or the Chief Executive of the Exchange it must still be approved by the Listing Committee. The Listing Committee may at the request of the Listing Division give an "in principle" approval, that a particular issuer or its business, or a particular type of security is suitable for listing, at an early stage in the application process (but will again consider the full application after the Listing Division has processed it). Otherwise the Listing Committee will not consider an application from a new applicant until the Listing Division has processed the application. If the Listing Committee approves a listing the Listing Division will issue a formal approval letter, in due course.

              • 2A.05A

                The Listing Committee has delegated to the Executive Director — Listing the power to approve any application for listing of debt securities under Chapter 37 (debt issues to professional investors only) and any application issued or guaranteed (in the case of guaranteed issues) by the following issuers or (in the case of guaranteed issues) guarantors:—

                i) States;
                ii) Supranationals;
                iii) State corporations;
                iv) banks and corporations having an investment grade credit rating; and
                v) issuers whose equity securities are listed on the Exchange and which have a market capitalization, at the time of the application, of not less than HK$5,000,000,000.

              • 2A.05B

                The Listing Committee has delegated to the Executive Director — Listing the power to approve an application for listing of interests in any Collective Investment Scheme which has been authorised by the Commission pursuant to the Securities and Futures Ordinance and the respective codes applicable to Collective Investment Schemes issued by the Commission from time to time.

            • Listed Issuers (2A.06)

              • 2A.06

                Applications for listing by a listed issuer will be dealt with by the Listing Division and it is the Executive Director — Listing who will normally approve the listing and issue the formal approval letter, in due course. However, the Listing Committee may determine the matter in the first instance at the request of the Listing Division where it considers it appropriate to do so.

          • Guidance

            • 2A.07

              Prospective issuers, and in particular new applicants, are encouraged to contact the Listing Division to seek informal and confidential guidance as to the eligibility of a proposed application for listing at the earliest possible opportunity.

          • Cancellation Procedures

            • 2A.08

              The Listing Committee has reserved to itself the power to cancel the listing of a listed issuer. This means that a listed issuer will not have its listing cancelled unless the Listing Committee has considered the matter.

          • Disciplinary Procedures

            • 2A.09

              In addition to its powers to suspend or cancel a listing, if the Listing Committee finds there has been a breach by any of the parties named in rule 2A.10 of the Exchange Listing Rules it may:—

              (1) issue a private reprimand;
              (2) issue a public statement which involves criticism;
              (3) issue a public censure;
              (4) report the offender's conduct to the Commission or another regulatory authority (for example the Financial Secretary, the Commissioner of Banking or any professional body) or to an overseas regulatory authority;
              (5) ban a professional adviser or a named individual employed by a professional adviser from representing a specified party in relation to a stipulated matter or matters coming before the Listing Division or the Listing Committee for a stated period;
              (6) require a breach to be rectified or other remedial action to be taken within a stipulated period including, if appropriate, the appointment of an independent adviser to minority shareholders;
              (7) in the case of wilful or persistent failure by a director of a listed issuer to discharge his responsibilities under the Exchange Listing Rules, state publicly that in the Exchange's opinion the retention of office by the director is prejudicial to the interests of investors;
              (8) in the event a director remains in office following a public statement pursuant to paragraph (7) above, suspend or cancel the listing of the issuer's securities or any class of its securities;
              (9) in the case of wilful or persistent failure by a listed issuer to discharge its responsibilities under the Exchange Listing Rules, order that the facilities of the market be denied for a specified period to that issuer and prohibit dealers and financial advisers from acting or continuing to act for that issuer;
              (10) take, or refrain from taking, such other action as it thinks fit, including making public any action taken pursuant to paragraphs (4), (5),(6),(8) or (9) above.

            • 2A.10

              The sanctions in rule 2A.09 may be imposed or issued against any of the following:

              (a) a listed issuer or any of its subsidiaries;
              (b) any director of a listed issuer or any of its subsidiaries or any alternate of such director;
              (c) any member of the senior management of a listed issuer or any of its subsidiaries;
              (d) any substantial shareholder of a listed issuer;
              (e) any professional adviser of a listed issuer or any of its subsidiaries;
              (f) [Repealed 1 January 2007]
              (g) any authorised representative of a listed issuer;
              (h) any supervisor of a PRC issuer; and
              (i) [Repealed 1 January 2007]
              (j) any independent financial adviser of a listed issuer.

              For the purposes of this rule "listed issuer" includes an issuer of listed structured products and "professional adviser" includes any financial adviser, lawyer, accountant, property valuer or any other person retained by an issuer to provide professional advice in relation to a matter governed by the Exchange Listing Rules. It does not include sponsors or Compliance Advisers.

              Notes:

              (1) The scope of any disciplinary action taken, in particular any ban imposed on a professional adviser pursuant to rule 2A.09(5), shall be limited to matters governed by or arising out of the Exchange Listing Rules.
              (2) In exercising its powers of sanction the Exchange will recognise the differing roles and levels of responsibility of the persons against whom sanctions may lie in pursuance of rule 2A.10. In particular, professional advisers' obligations to use all reasonable efforts to ensure that their clients understand and are advised as to the scope of the Exchange Listing Rules are subject to any relevant requirements of professional conduct, as policed and enforced by any professional body of which that adviser is a member.

            • 2A.11

              The Listing Committee will, if requested by any party to be reprimanded, criticised, censured or otherwise sanctioned in pursuance of the powers contained in rules 2A.09 and 2A.10 (an "appellant") give its reasons in writing for the decision made against that appellant pursuant to rules 2A.09 and 2A.10 and that appellant shall have the right to have the decision against him referred to the Listing Committee again for review. If the Listing Committee modifies or varies the ruling of the earlier meeting, it will, if requested by the appellant, give its reasons in writing for the modification or variation and, in respect of decisions pursuant to rule 2A.09(2), (3), (5), (7), (8) or (9) only, the appellant shall have a right to a further and final review of the decision against the appellant by the Listing Appeals Committee. The decision of the Listing Appeals Committee on review shall be conclusive and binding on the appellant. If requested by the appellant, the Listing Appeals Committee will give reasons in writing for its decision on review.

            • 2A.12

              A request for a review of any decision of the Listing Division or the Listing Committee made pursuant to rule 2A.11 must be notified to the Exchange within seven days of the Listing Division's or the Listing Committee's decision unless written reasons for a decision are requested, in which case a request for a review of that decision must be notified within seven days of the receipt of the written reasons.

            • 2A.13

              Any request for the Listing Division, the Listing Committee or the Listing Appeals Committee to give its reasons in writing for its decision shall be made within three business days of its decision. Where requested, written reasons for a decision will be provided by the Listing Division, the Listing Committee or the Listing Appeals Committee (as the case may be) as soon as possible and, in any event, within fourteen days of the request.

            • 2A.14

              Any person, other than an issuer, its sponsor and authorised representatives, who is aggrieved by a decision of the Listing Division or the Listing Committee may express his views, in writing, to the Chairman of the Listing Committee. The Listing Committee may, in its sole discretion, decide to fully review the matter, having regard to the rights of any third party which may have been created in reliance upon the earlier decision.

            • 2A.15

              The Listing Committee may from time to time prescribe such procedures and regulations for any review meetings or hearings as it may think fit.

          • Rights of Parties to be Heard

            • 2A.16

              In any disciplinary proceedings of the Listing Committee and on any further review of the decision resulting from those proceedings by the Listing Committee or the Listing Appeals Committee, the party the subject of such proceedings shall have the right to attend the meeting, to make submissions and to be accompanied by its professional advisers. In all disciplinary proceedings the Listing Division will provide the parties with copies of any papers to be presented by it at the meeting, in advance of the meeting.

          • Composition of the Listing Committee

            • 2A.17

              Subject to casual vacancies from time to time the Listing Committee shall consist of 28 members or such greater number of members as the Board may from time to time agree, comprising:—

              (1) at least eight individuals who the Listing Nominating Committee considers will represent the interests of investors;
              (2) nineteen individuals who the Listing Nominating Committee considers will be a suitable balance of representatives of listed issuers and market practitioners including lawyers, accountants, corporate finance advisers and Exchange Participants or officers of Exchange Participants; and
              (3) the Chief Executive of HKEC acting as ex officio member.

            • 2A.18 [Repealed]

              [Repealed May 2006]

          • Appointment and Removal of Members of the Listing Committee

            • 2A.19 [Repealed]

              [Repealed 1 January 2016]

            • 2A.20

              Members of the Listing Committee shall be appointed by the Board. The Board may appoint only persons nominated in accordance with rule 2A.21.

            • 2A.21

              The persons eligible for appointment or re-appointment in each year as members of the Listing Committee shall be nominated by a Listing Nominating Committee comprising three non-executive members of the board of HKEC and the Chairman and two Executive Directors of the Commission. In their deliberations the Listing Nominating Committee shall seek the views of the current Chairman and Deputy Chairmen of the Listing Committee.

            • 2A.22

              The Chairman and Deputy Chairmen of the Listing Committee shall be nominated by the Listing Nominating Committee and appointed by the Board. The Listing Nominating Committee may choose to nominate one or more than one Deputy Chairman and the Board may choose to appoint one or more than one Deputy Chairman. The Chief Executive of HKEC may not be elected as either Chairman or Deputy Chairman of the Listing Committee.

            • 2A.22A

              Members of the Listing Committee shall normally be appointed for a term of approximately twelve months.

            • 2A.23

              All members of the Listing Committee shall vacate office at the end of their term unless they are re-appointed by the Board for a further full term or such shorter period as the Board may stipulate at the time of re-appointment. Subject to rule 2A.25, all members of the Listing Committee are eligible for re-appointment.

            • 2A.24

              The Board may fill any casual vacancies that may occur in the Listing Committee by reason of resignation, retirement or otherwise. A person eligible for appointment to fill any such casual vacancy shall be nominated by the Listing Nominating Committee and shall be a person who is eligible within the same category of rule 2A.17 as the member who has vacated office. The term of a member appointed to fill a casual vacancy in an office shall end on the same date as the term of the member whose vacation from that office created the casual vacancy.

            • 2A.25

              Members of the Listing Committee may only remain in office for a maximum of six consecutive years in addition to any period of appointment pursuant to rule 2A.24 for the purpose of filling a casual vacancy. A member who has served for the maximum period permitted by this rule may be eligible for re-appointment after the lapse of two years from the date on which he last vacates office. Notwithstanding the foregoing, in exceptional circumstances, the Listing Nominating Committee shall have the discretion to nominate a person for reappointment at any time before the lapse of two years from the date such person vacates office and the Board shall have the power to appoint such person.

            • 2A.26

              The office of a member of the Listing Committee shall be vacated if any one of the following events occurs:—

              (1) if a receiving order is made against him or he makes any arrangement or composition with his creditors;
              (2) if he becomes insane or is found to be of unsound mind within the meaning of the Mental Health Ordinance (Cap. 136);
              (3) if by notice in writing to the Board and the Listing Committee, he resigns from his office; or
              (4) if by reason of serious misconduct he is removed by the Board and a written statement setting out the reasons for his removal has been delivered to the Commission,

              provided that the acts of such member shall nevertheless be treated as valid and effectual in all respects up to and until an entry of the vacation of office shall be entered in the minutes of the Listing Committee.

          • Functions and Powers of the Listing Committee

            • 2A.27

              The Listing Committee shall exercise all the powers and functions of the Board in relation to all listing matters. The Listing Committee's exercise of such powers and functions is only subject to the powers of review in the Listing Appeals Committee.

          • Conduct of Meetings of the Listing Committee

            • 2A.28

              The Listing Committee shall meet for the despatch of business, adjourn and otherwise regulate its meetings in accordance with the provisions of the rules made by the Board for this purpose, including rules governing members' conflicts of interest, subject to the provisions of this rule 2A.28. The quorum necessary for the transaction of any business by the Listing Committee shall be five members present in person. The Chief Executive of HKEC may be counted in the quorum for a meeting of the Listing Committee (including a meeting at which the Listing Committee is determining a matter in the first instance) except that he shall not be counted in the quorum for any meeting at which a decision of the Listing Division or the Listing Committee is under review pursuant to any disciplinary proceedings. The Chief Executive of HKEC may attend meetings of the Listing Committee convened for such purpose and put forward his views (if any) on the matter under review pursuant to any disciplinary proceedings but he shall not thereafter be entitled to participate in the deliberations of the Listing Committee or to vote on such matters. At any meeting held to review an earlier decision of the Listing Committee pursuant to any disciplinary proceedings, all of the members present at the second meeting must be persons who were not present at the first meeting.

          • Composition of the Listing Appeals Committee

            • 2A.29

              The Listing Appeals Committee shall consist of the chairman and two other members of the board of HKEC.

            • 2A.30

              The Chairman of the Listing Appeals Committee shall be the chairman of the board of HKEC.

            • 2A.31

              The Chairman of the Listing Appeals Committee shall appoint a Deputy Chairman from amongst the members of the board of HKEC, except the Chief Executive of HKEC. The Chairman of the Listing Appeals Committee shall vacate office upon a new chairman of the board of HKEC being appointed by the members of the board of HKEC and approved in writing by the Chief Executive of Hong Kong or upon his earlier removal from the chairmanship of the board of HKEC. The Deputy Chairman of the Listing Appeals Committee shall vacate office upon (i) the expiry of his term as a director of HKEC unless he is re-appointed or re-elected as a director of HKEC (as the case may be) and re-appointed by the Chairman of the Listing Appeals Committee as Deputy Chairman; or (ii) his earlier removal as director of HKEC.

            • 2A.32

              The third member shall be chosen and invited to sit on the Listing Appeals Committee by the Chairman of the Listing Appeals Committee as and when the Listing Appeals Committee is required to review a decision of the Listing Committee and shall cease to be a member once the Listing Appeals Committee has given its decision upon the matter or upon resignation, whichever is the sooner. The third member shall be a member of the board of HKEC, except the Chief Executive of HKEC.

            • 2A.33

              In the event that either the Chairman or the Deputy Chairman of the Listing Appeals Committee is materially interested in the outcome of a review (otherwise than as a member of the board of HKEC and, where applicable, of the Board) or is otherwise unavailable to hear a review then the one who is available shall appoint a replacement member for the purposes of hearing that review and such person shall cease to be a member once the Listing Appeals Committee has given its decision upon the matter or upon resignation, whichever is the sooner. The replacement member appointed must be a member of the board of HKEC, except the Chief Executive of HKEC.

            • 2A.34

              In the event that both the Chairman and the Deputy Chairman of the Listing Appeals Committee are materially interested in the outcome of a review (otherwise than as a member of the board of HKEC and, where applicable, of the Board) or are otherwise unavailable to hear a particular review the board of HKEC shall appoint a temporary Chairman of the Listing Appeals Committee from the members of the board of HKEC. The temporary Chairman shall appoint a temporary Deputy Chairman and a third member of the Listing Appeals Committee from the members of the board of HKEC to hear that review. The temporary Chairman, the temporary Deputy Chairman and the third member appointed by the temporary Chairman shall all cease to be members of the Listing Appeals Committee once the Listing Appeals Committee has given its decision upon the matter or upon resignation whichever is the sooner. The provisions of rule 2A.33 and this rule shall apply mutatis mutandis to the temporary Chairman and temporary Deputy Chairman as if all references to the Chairman and Deputy Chairman were references to the temporary Chairman and temporary Deputy Chairman respectively.

            • 2A.35

              The Chairman of the Listing Appeals Committee may not invite a person to sit on the Listing Appeals Committee if that person was present at any meeting of the Listing Committee at which the decision under review was made or considered or is otherwise materially interested in the outcome of the review (otherwise than as an Exchange Participant or a member of the board of HKEC and, where applicable, of the Board).

          • Functions and Powers of the Listing Appeals Committee

            • 2A.36

              The Listing Appeals Committee shall be the review body in respect of any decision of the Listing Committee on any of the following matters:—

              (1) [Repealed 1 January 2007]
              (2) that the role of an authorised representative appointed under rule 3.05 must be terminated;
              (3) that an application for listing by a new applicant has been rejected solely on the grounds that the issuer or its business is unsuitable for listing;
              (4) that an application for the lifting of a suspension of dealings in the securities of an issuer has been rejected where the suspension has been in place for more than 30 consecutive days;
              (5) that the listing of a listed issuer be cancelled;
              (6) any decision pursuant to rule 2A.09(2), (3), (5), (7), (8) or (9); or
              (7) that trading in the shares of an issuer be restored pursuant to Rule 6.07 of the Listing Rules.

          • Conduct of Meetings of the Listing Appeals Committee

            • 2A.37

              The Listing Appeals Committee shall meet for the despatch of business, adjourn and otherwise regulate its meetings in accordance with the provisions of the rules made by the Board for this purpose, including rules governing members' conflicts of interest, subject to the provisions of this rule 2A.37. The quorum necessary for the transaction of any business by the Listing Appeals Committee shall be three members present in person.

          • Bona Fide Acts of Committee Members

            • 2A.38

              All bona fide acts of a member of the Listing Committee or any member of the Listing Appeals Committee pursuant to the resolutions passed at any meeting of those Committees shall, as regards all persons dealing in good faith with the Exchange, notwithstanding that it be subsequently discovered that there was some defect in the appointment of any such member or that such member was for some reason ineligible for appointment, be deemed to be valid as if every member had been duly appointed and was qualified to be a member of the relevant Committee.

        • Chapter 2B Review Procedure

          • General

            • 2B.01

              Rule 2A.03 provides that the Listing Committee has retained the role of oversight of the Listing Division and the Chief Executive of the Exchange to ensure that they exercise those powers and carry out their day-to-day functions in a professional and impartial manner. This oversight role does not mean, however, that the Listing Committee will be involved in the day-to-day administration of the Exchange Listing Rules but the Listing Committee will act as an independent review body and has retained the right to review at any time, on its own volition, any decision of the Chief Executive of the Exchange, the Executive Director of the Listing Division or any member of the staff of the Listing Division which is made under any of the powers delegated by the Listing Committee and to endorse, modify, vary or reverse any such decision. In addition, the Listing Committee has the power to impose directions, regulations or restrictions on the Chief Executive of the Exchange, the Executive Director of the Listing Division and the staff of the Listing Division in respect of the way in which they are to carry out their delegated authority.

          • Definitions and Interpretation

            • 2B.01A

              In this Chapter:

              (1) Where this Chapter provides a time limit for performing any act within a specified number of business days of receipt of the relevant document, the act is to be performed within the specified number of business days after, but not including, the date of receipt of the relevant document.
              (2) "Return Decision" means the Listing Division's decision to return a new applicant's listing application and all related documents to its sponsor (except for the retention of a copy of these documents for the Exchange's record) on the ground that the information in the listing application form, Application Proof, or any other related documents under rule 9.10A(1) is not substantially complete under rule 9.03(3). A Return Decision does not include a rejection decision under rule 2B.05(1)
              (3) "Review Request" means a written request by the relevant party for a review of the decision of the Listing Division, Listing Committee or the Listing (Review) Committee (as the case may be) under rules 2B.05, 2B.06 and 2B.07 which must be served on the Secretary of the Listing Committee, the Secretary of the Listing (Review) Committee or the Secretary of the Listing Appeals Committee (hereinafter referred to as the "Secretary"), as the case may be

            • 2B.02

              The Listing Committee may at any time conduct a hearing in relation to any matter relating to or arising out of the Exchange Listing Rules and it may require the attendance at such hearing of such persons and the production to such hearing of such documents as it deems appropriate. As provided in this chapter certain decisions of the Listing Committee may be referred to the Listing (Review) Committee for review; certain decisions of the Listing Committee or the Listing (Review) Committee may also be referred to the Listing Appeals Committee for review.

            • 2B.03

              The Listing Committee may from time to time prescribe such procedures and regulations for any review hearings as it may think fit.

            • 2B.04

              (1) Notwithstanding Rule 2B.03 and provisions in respect of Form A1, a listed issuer or new applicant shall submit to the Listing Committee, information for an application for listing pursuant to each Form A1 no more than two times subject always to:—
              (a) the Listing Committee to permit otherwise if it considers necessary;
              (b) only one right of review by the listed issuer or new applicant against the latest decision made by the Listing Committee as at the date of the Review Request pursuant to Rule 2B.08; and
              (c) to Rule 2B.11(5).
              (2) The Listing Committee shall only consider a revised application for listing if the listed issuer or the new applicant, as the case may be, provides new information for the consideration by the Listing Committee.
              (3) Subject to Rule 2B.04(1), the listed issuer or the new applicant may if it considers necessary, submit a new listing application form again for the consideration by the Listing Committee.

          • Review cases of a new applicant to be considered by the Listing Committee and the Listing (Review) Committee

            • 2B.05

              (1)
              (a) Where the Listing Division rejects an application for listing by a new applicant, the new applicant has the right to have that ruling reviewed by the Listing Committee.
              (b) Where the Listing Committee rejects an application for listing by the new applicant or endorses, modifies or varies the Listing Division's decision to reject an application, the new applicant has the right to have the decision referred to the Listing (Review) Committee for a review.
              (c) The decision of the Listing (Review) Committee on the review is conclusive and binding on the new applicant except where a new applicant is rejected solely on the grounds of unsuitability of the new applicant itself or its business.
              Note: A rejection decision under rule 2B.05(1) does not include a Return Decision.
              (2)
              (a) A new applicant and/or its sponsor have the right to have a Return Decision reviewed by the Listing Committee.
              (b) Where the Listing Committee endorses the Return Decision, the new applicant and/or the sponsor have the right to have the Return Decision referred to the Listing (Review) Committee for a review. The decision of the Listing (Review) Committee on the review is conclusive and binding on the new applicant and the sponsor.

          • Review cases of a listed issuer to be considered by the Listing Committee and the Listing (Review) Committee

            • 2B.06

              (1) Where the Listing Division makes a ruling on the listed issuer, the listed issuer may request that the ruling to be referred to the Listing Committee, the Listing Committee may, in its sole discretion, review the ruling at a first review hearing of the Listing Committee.
              (2) Subject to Rule 2B.04, where the Listing Committee endorses, modifies or varies the Listing Division's ruling or makes its own ruling, the listed issuer may request that application to be referred to the Listing (Review) Committee again for a second review of the ruling.
              (3) The decision of the Listing Division, the Listing Committee, the Listing (Review) Committee or the Listing Appeals Committee, as the case may be, shall be binding on the listed issuer if the listed issuer does not review the decision of the Listing Division, the Listing Committee or the Listing (Review) Committee, as the case may be; otherwise, the decision of the Listing (Review) Committee or, in the cases to which Rule 2B.07 applies, the decision of the Listing Appeals Committee, shall be conclusive and binding on the listed issuer.

          • Review cases to be considered by the Listing Appeals Committee

            • 2B.07

              The Listing Appeals Committee shall be the review hearing body in respect of any decision of the Listing Committee or Listing (Review) Committee on any of the following matters:—

              (1) Rejection of a new applicant — unsuitability of listing

              Where the Listing Committee rejects the new applicant solely on the ground that the new applicant or its business is not suitable for listing, the new applicant shall have a right to a further review of the application by the Listing (Review) Committee and a further and final review of the application by the Listing Appeals Committee. The Listing Appeal Committee's decision will then be conclusive and binding on the new applicant.
              (2) [Repealed 1 January 2007]
              (3) Rejection of an authorised representative
              (a) Where the Listing Division decides that the role of an authorised representative appointed under Rule 3.05 be terminated, that authorised representative shall have the right to have that decision referred to the Listing Committee for review.
              (b) Where the Listing Committee endorses, modifies or varies the Listing Division's decision, that authorised representative shall have the right to have that decision reviewed by the Listing Appeals Committee, whose decision shall be conclusive and binding on both the listed issuer and that authorised representative.
              (4) Rejection of a lifting of suspension of trading
              (a) Where the Listing Division rejects an application by a listed issuer to lift a suspension of dealings which has been in effect for more than 30 days, the listed issuer shall have the right to have that decision referred to the Listing Committee for review.
              (b) Where the Listing Committee endorses, modifies or varies the Listing Division's decision, that listed issuer shall have the right to have that decision reviewed by the Listing Appeals Committee, whose decision shall be conclusive and binding on that listed issuer.
              (5) Cancellation of a listing
              (a) Following a decision to cancel the listing of a listed issuer, the Listing Committee will set down a detailed review procedure upon the receipt of the written request made including time limits for submitting documents on a case by case basis.
              (b) Where the Listing Committee decides to cancel the listing of a listed issuer, the listed issuer shall have the right to have that decision referred to the Listing (Review) Committee again for review.
              (c) Where the Listing (Review) Committee endorses, modifies or varies the earlier decision of the Listing Committee, the listed issuer shall have a right to further and final review of that decision by the Listing Appeals Committee, whose decision shall be conclusive and binding on the listed issuer.
              Note: See Practice Note 17 for Delisting Procedures.
              (6) Resumption of Trading
              (a) Where the Listing Committee rejects a request by a listed issuer for the suspension, or continued suspension, from trading of its securities or where in appropriate circumstances the Listing Committee intends to direct a resumption following a suspension, the Listing Committee will, if requested, give its reasons in writing and the issuer shall have the right to have that ruling referred to the Listing (Review) Committee for review.
              (b) If the Listing (Review) Committee endorses, modifies or varies the ruling of the Listing Committee, it will, if requested, give its reasons in writing and the issuer shall have the right to have that ruling reviewed by the Listing Appeals Committee.
              (c) The decision of the Listing Appeals Committee shall be conclusive and binding on the issuer. If requested, the Listing Appeals Committee will give its reasons in writing for the decision on review.

          • Time for application

            • 2B.08

              (1) A Review Request for reviewing any decision of the Listing Division, the Listing Committee or the Listing (Review) Committee (as the case may be) under rules 2B.05(1), 2B.06 and 2B.07 must be served on the Secretary within 7 business days of receipt of either the relevant decision, or if the relevant party requests a written decision under rule 2B.13(1), that written decision.
              (2) A Review Request for reviewing a Return Decision or a Listing Committee's decision to endorse a Return Decision must include the grounds for the review together with reasons and be served on the Secretary within 5 business days of receipt of the written decision under rule 2B.13(2).

          • Notice of review hearing

            • 2B.09

              Upon the receipt of the written request for a review of any decision of the Listing Division, the Listing Committee or Listing (Review) Committee, the Listing Committee, the Listing (Review) Committee or the Listing Appeals Committee, as the case may be, will convene a hearing to review the matter in accordance with the procedures as prescribed by the Secretary; provided that when the Listing Committee or Listing (Review) Committee considers that it is necessary to resolve an issue urgently, it may stipulate such time as may be necessary within which the relevant party should be informed as to the date for the review hearing.

          • Prehearing procedures

            • 2B.10

              In all review cases, the Listing Division and the relevant parties will provide each other and the Listing Committee, the Listing (Review) Committee or the Listing Appeals Committee through the Secretary of the relevant Committee with copies of any papers to be presented by it at the hearing, in advance of the review hearing.

          • Conduct of review hearing

            • 2B.11

              (1) The Listing Committee, the Listing (Review) Committee or the Listing Appeals Committee shall meet for the despatch of business, adjourn and otherwise regulate its hearings in accordance with the provisions of the rules made by the Board for this purpose, including rules governing members' conflicts of interest, subject to the provisions of this rule.
              (2) The quorum necessary for the transaction of any business by the Listing Committee or the Listing (Review) Committee shall be five members present in person. The quorum necessary for the transaction of any business by the Listing Appeals Committee shall be three members present in person.
              (3) The Chief Executive of HKEC may be counted in the quorum for a meeting of the Listing Committee (including a meeting at which the Listing Committee is determining a matter in the first instance) except that he shall not be counted in the quorum for Listing (Review) Committee at which a decision of the Listing Division or the Listing Committee is under review. The Chief Executive of HKEC may attend meetings of the Listing (Review) Committee convened for such purpose and put forward his views (if any) on the matter under review but he shall not thereafter be entitled to participate in the deliberations of the Listing (Review) Committee or to vote on such matters.
              (4) At any meeting held to review an earlier decision of the Listing Committee, subject to the facts and circumstances arising in the earlier meeting(s) in each case and subject further to the absolute discretion of either the Chairman of the Listing Committee or the Listing (Review) Committee, as the case may be, all of the members present at the review hearing shall be persons who were not present at the earlier Listing Committee meeting.
              (5)
              (a) The relevant party shall have provided the Listing Committee with all or any new information for the consideration by the Listing Committee before seeking to review a Listing Committee decision by the Listing (Review) Committee.
              (b) A party may only request a review of a decision of the Listing Committee when all the relevant information and evidence has been provided to the Listing Committee. A party seeking to review shall not seek to present to the Listing (Review) Committee new information or evidence that was not previously presented to the Listing Committee.
              (c) If the Listing Division upon receipt of the written submission from the relevant party discovers that the relevant party adduces new information in its written submissions prepared for the review hearing, the Listing Division shall notify the Secretary immediately so that arrangements may be made for the relevant party to withdraw its application for review. The new submission will then be considered by the Listing Committee as a first instance hearing.
              (d) Sub-rules (a), (b) and (c) do not apply to a review relating to a Return Decision. In a review of a Return Decision or a Listing Committee's decision to endorse a Return Decision, any materials submitted to the Listing Committee or the Listing (Review) Committee must be based on the original materials submitted to the Listing Division when the new applicant first filed its listing application.
              (6) Where the Listing Committee is considering an application for listing from a new applicant, the Listing Division will normally invite the new applicant and its directors to make itself available to attend the Listing Committee hearing. The new applicant, including its directors and its sponsor shall be prepared to answer questions raised by the Listing Committee, but they will normally only be invited into the Listing Committee hearing if the Listing Committee wishes to directly question the new applicant. If the new applicant is invited to make itself available to attend, the new applicant may be accompanied by its directors, sponsor and/or proposed authorised representatives.
              (7) At a Listing (Review) Committee or Listing Appeals Committee hearing, the directors of the new applicant or the listed issuer (as the case may be) have the right to attend the hearing, to make submissions and to be accompanied by one representative of each of the sponsor, authorised representatives, proposed or otherwise, the financial adviser, the legal adviser and auditors of the new applicant or the listed issuer (as the case may be); an authorised representative may be accompanied by his legal adviser.
              (8) In the case of a review hearing sought by an authorised representative under rule 2B.07(3), the authorised representative has the right to attend the review hearing, to make submissions and may be accompanied by his legal adviser.
              (9) Sub-rules (6) and (7) do not apply to a review relating to a Return Decision. In a review hearing of a Return Decision by the Listing Committee or the Listing (Review) Committee, the directors of the new applicant and/or one representative of each sponsor have the right to attend the hearing, to make submissions and to be accompanied, in the case of the directors of the new applicant, by one representative of each of the new applicant's financial adviser, legal adviser and auditors; and in the case of each sponsor, by its legal adviser. If all the parties seeking a review decide not to attend the hearing, the hearing will proceed based on the documents submitted for hearing. For the avoidance of doubt, if a party seeking a review decides not to attend the hearing, the hearing will proceed in his absence.

          • Role of Secretary

            • 2B.12

              (1) The Secretary shall be responsible for overseeing and co-ordinating the operation of the review procedures.
              (2) Any notices, notifications and all other documents required to be submitted to the Listing Committee, the Listing (Review) Committee or the Listing Appeals Committee must be served upon the Secretary who will ensure that copies are provided to the other parties and members of the Listing Committee, the Listing (Review) Committee or the Listing Appeals Committee, as appropriate.
              (3) The Secretary shall advise the Listing Committee, the Listing (Review) Committee or the Listing Appeals Committee on procedural matters, but all decisions on such matters shall be made only by the Listing Committee, the Listing (Review) Committee or the Listing Appeals Committee as the case may be; and the Secretary shall carry out such duties as may from time to time be authorised by the Listing Committee, the Listing (Review) Committee or the Listing Appeals Committee.
              (4) The Secretary shall be the point of contact for all parties, including the representatives of the Listing Division and the relevant party seeking for a review, in respect of any administrative matter arising out of the review procedures.
              (5) The Secretary shall refer any pre-review hearing enquiries or matter, procedural or otherwise, to the Chairman proposed for any of the Listing Committee, Listing (Review) Committee or Listing Appeals Committee, as the case may be, for confirmation or decision or if the proposed Chairman so directs, the Secretary shall refer the same to the Listing Committee, the Listing (Review) Committee or the Listing Appeals Committee, as the case may be, for its decision.

          • Request for written reasons

            • 2B.13

              (1) Except for a review relating to a Return Decision, on receipt of a decision by the Listing Division, the Listing Committee, the Listing (Review) Committee or the Listing Appeals Committee (as the case may be) a relevant party has 3 business days to request written reasons for the decision. The Listing Division, the Listing Committee, the Listing (Review) Committee or the Listing Appeals Committee (as the case may be) will provide written reasons within 14 business days of receipt of the request.
              (2) The Listing Division, the Listing Committee or the Listing (Review) Committee (as the case may be) will provide written reasons for its Return Decision or decision to endorse a Return Decision.

          • Costs

            • 2B.14

              Upon submission of a Review Request pursuant to Rule 2B.08, a non-refundable fee of HK$60,000 is payable to the Exchange, for each review, by any party seeking to review a decision of the Listing Division, the Listing Committee or the Listing (Review) Committee, as the case may be, pursuant to this Chapter 2B.

          • Aggrieved Party

            • 2B.15

              Any person, other than a listed issuer, its sponsor and authorised representatives, who is aggrieved by a decision of the Listing Division or the Listing Committee may express his views, in writing, to the Chairman of the Listing Committee. The Listing Committee may, in its sole discretion, decide to fully review the matter, having regard to the rights of any third party which may have been created in reliance upon the earlier decision.

        • Chapter 3 Authorised Representatives, Directors, Board Committees and Company Secretary

          • 3.01 [Repealed]

            [Repealed 1 January 2005]

          • 3.02 [Repealed]

            [Repealed 1 January 2005]

          • 3.03 [Repealed]

            [Repealed 1 January 2005]

          • 3.04 [Repealed]

            [Repealed 1 January 2005]

          • Authorised Representatives

            • 3.05

              Every listed issuer shall appoint two authorised representatives who shall act at all times as the listed issuer's principal channel of communication with the Exchange. The two authorised representatives must be either two directors or a director and the listed issuer's secretary unless the Exchange, in exceptional circumstances, agrees otherwise.

            • 3.06

              The responsibilities of an authorised representative are:—

              (1) at all times (particularly before commencement of trading in the morning) to be the principal channel of communication between the Exchange and the issuer and to supply the Exchange with details in writing of how to contact him including home, office, mobile and other telephone numbers, email address and correspondence address (if the authorised representative is not based at the registered office), facsimile numbers if available, and any other contact details prescribed by the Exchange from time to time;
              (2) to ensure that whenever he is outside Hong Kong suitable alternates are appointed, available and known to the Exchange and to supply the Exchange with details in writing of how such alternates may be contacted including their home and office telephone numbers and, where available, facsimile numbers;
              (3) the authorised representative should only terminate his role as authorised representative after first notifying the Exchange of such proposed termination and the reasons therefor; and
              (4) except in exceptional circumstances, the listed issuer should not terminate the role of an authorised representative until it has appointed a replacement. Where the authorised representative's role is terminated by the listed issuer, both the listed issuer and the former authorised representative should immediately notify the Exchange of such termination in each case stating the reason why such appointment was terminated and the listed issuer and the new authorised representative should immediately notify the Exchange of the new authorised representative's appointment.

            • 3.07

              If the Exchange is not satisfied that the authorised representative is fulfilling his responsibilities adequately, it may require the listed issuer to terminate his appointment and appoint a replacement as soon as possible. The listed issuer and the new authorised representative should immediately notify the Exchange of the new authorised representative's appointment.

          • Directors

            • 3.08

              The board of directors of an issuer is collectively responsible for its management and operations. The Exchange expects the directors, both collectively and individually, to fulfil fiduciary duties and duties of skill, care and diligence to a standard at least commensurate with the standard established by Hong Kong law. This means that every director must, in the performance of his duties as a director:—

              (a) act honestly and in good faith in the interests of the company as a whole;
              (b) act for proper purpose;
              (c) be answerable to the issuer for the application or misapplication of its assets;
              (d) avoid actual and potential conflicts of interest and duty;
              (e) disclose fully and fairly his interests in contracts with the issuer; and
              (f) apply such degree of skill, care and diligence as may reasonably be expected of a person of his knowledge and experience and holding his office within the issuer.

              Directors must satisfy the required levels of skill, care and diligence. Delegating their functions is permissible but does not absolve them from their responsibilities or from applying the required levels of skill, care and diligence. Directors do not satisfy these required levels if they pay attention to the issuer's affairs only at formal meetings. At a minimum, they must take an active interest in the issuer's affairs and obtain a general understanding of its business. They must follow up anything untoward that comes to their attention.

              Directors are reminded that if they fail to discharge their duties and responsibilities, they may be disciplined by the Exchange and may attract civil and/or criminal liabilities under Hong Kong law or the laws of other jurisdictions.

              Note: These duties are summarised in "A Guide on Directors' Duties" issued by the Companies Registry. In addition, directors are generally expected by the Exchange to be guided by the Guidelines for Directors and the Guide for Independent Non-executive Directors published by the Hong Kong Institute of Directors (www.hkiod.com). In determining whether a director has met the expected standard of care, skill and diligence, courts will generally consider a number of factors. These include the functions that are to be performed by the director concerned, whether he is a fulltime executive director or a part-time non-executive director and his professional skills and knowledge.

            • 3.09

              Every director of a listed issuer must satisfy the Exchange that he has the character, experience and integrity and is able to demonstrate a standard of competence commensurate with his position as a director of a listed issuer. The Exchange may request further information regarding the background, experience, other business interests or character of any director or proposed director of a listed issuer.

            • 3.10

              Subject to the transitional provisions in rule 3.19,

              (1) every board of directors of a listed issuer must include at least three independent non-executive directors; and
              (2) at least one of the independent non-executive directors must have appropriate professional qualifications or accounting or related financial management expertise.

              Note: With regard to "appropriate accounting or related financial management expertise", the Exchange would expect the person to have, through experience as a public accountant or auditor or as a chief financial officer, controller or principal accounting officer of a public company or through performance of similar functions, experience with internal controls and in preparing or auditing comparable financial statements or experience reviewing or analysing audited financial statements of public companies. It is the responsibility of the board to determine on a case-by-case basis whether the candidate is suitable for the position. In making its decision, the board must evaluate the totality of the individual's education and experience.

            • 3.10A

              An issuer must appoint independent non-executive directors representing at least one-third of the board.

              Note: The issuer must comply with this rule by 31 December 2012.

            • 3.11

              An issuer shall immediately inform the Exchange and publish an announcement containing the relevant details and reasons if at any time the number of its independent non-executive directors falls below:

              (1) the minimum number required under rule 3.10(1) or at any time it has failed to meet the requirement set out in rule 3.10(2) regarding qualification of the independent non-executive directors; or
              (2) one-third of the board as required under rule 3.10A.

              The issuer shall appoint a sufficient number of independent non-executive directors to meet the minimum number required under rule 3.10(1) or 3.10A or appoint an independent non-executive director to meet the requirement set out in rule 3.10(2) within three months after failing to meet the requirement(s).

            • 3.12

              In addition to fulfilling the requirements and continuing obligations of rules 3.08, 3.09 and 3.13, every independent non-executive director must satisfy the Exchange that he has the character, integrity, independence and experience to fulfil his role effectively. The Exchange may stipulate a minimum number of independent non-executive directors which is higher than three if, in the opinion of the Exchange, the size of the board or other circumstances of the listed issuer justify it.

            • 3.13

              In assessing the independence of a non-executive director, the Exchange will take into account the following factors, none of which is necessarily conclusive. Independence is more likely to be questioned if the director:—

              (1) holds more than 1% of the number of issued shares of the listed issuer;

              Notes:
              1. A listed issuer wishing to appoint an independent non-executive director holding an interest of more than 1% must satisfy the Exchange, prior to such appointment, that the candidate is independent. A candidate holding an interest of 5% or more will normally not be considered independent.
              2. When calculating the 1% limit set out in rule 3.13(1), the listed issuer must take into account the total number of shares held legally or beneficially by the director, together with the total number of shares which may be issued to the director or his nominee upon the exercise of any outstanding share options, convertible securities and other rights (whether contractual or otherwise) to call for the issue of shares.
              (2) has received an interest in any securities of the listed issuer as a gift, or by means of other financial assistance, from a core connected person or the listed issuer itself. However, subject to Note 1 to rule 3.13(1), the director will still be considered independent if he receives shares or interests in securities from the listed issuer or its subsidiaries (but not from core connected persons) as part of his director's fee or pursuant to share option schemes established in accordance with Chapter 17;
              (3) is a director, partner or principal of a professional adviser which currently provides or has within one year immediately prior to the date of his proposed appointment provided services, or is an employee of such professional adviser who is or has been involved in providing such services during the same period, to:
              (a) the listed issuer, its holding company or any of their respective subsidiaries or core connected persons; or
              (b) any person who was a controlling shareholder or, where there was no controlling shareholder, any person who was the chief executive or a director (other than an independent non-executive director), of the listed issuer within one year immediately prior to the date of the proposed appointment, or any of their close associates;
              (4) has a material interest in any principal business activity of or is involved in any material business dealings with the listed issuer, its holding company or their respective subsidiaries or with any core connected persons of the listed issuer;
              (5) is on the board specifically to protect the interests of an entity whose interests are not the same as those of the shareholders as a whole;
              (6) is or was connected with a director, the chief executive or a substantial shareholder of the listed issuer within two years immediately prior to the date of his proposed appointment;

              Note: Without prejudice to the generality of the foregoing, any person cohabiting as a spouse with, and any child, step-child, parent, step-parent, brother, sister, step-brother and step-sister of, a director, the chief executive or a substantial shareholder of the listed issuer is, for the purpose of rule 3.13(6), considered to be connected with that director, chief executive or substantial shareholder. A father-in-law, mother-in-law, son-in-law, daughter-in-law, grandparent, grandchild, uncle, aunt, cousin, brother-in-law, sister-in-law, nephew and niece of a director, the chief executive or a substantial shareholder of the listed issuer may in some circumstances also be considered to be so connected. In such cases, the listed issuer will need to provide the Exchange with all relevant information to enable the Exchange to make a determination.
              (7) is, or has at any time during the two years immediately prior to the date of his proposed appointment been, an executive or director (other than an independent non-executive director) of the listed issuer, of its holding company or of any of their respective subsidiaries or of any core connected persons of the listed issuer; and

              Note: An "executive" includes any person who has any management function in the company and any person who acts as a company secretary of the company.
              (8) is financially dependent on the listed issuer, its holding company or any of their respective subsidiaries or core connected persons of the listed issuer.

              An independent non-executive director shall submit to the Exchange a written confirmation which must state:

              (a) his independence as regards each of the factors referred to in rule 3.13(1) to (8);
              (b) his past or present financial or other interest in the business of the issuer or its subsidiaries or any connection with any core connected person (as such term is defined in the Exchange Listing Rules) of the issuer, if any; and
              (c) that there are no other factors that may affect his independence at the same time as the submission of his declaration and undertaking in Form B or H of Appendix 5.

              Each independent non-executive director shall inform the Exchange as soon as practicable if there is any subsequent change of circumstances which may affect his independence and must provide an annual confirmation of his independence to the listed issuer. The listed issuer must confirm in each of its annual reports whether it has received such confirmation and whether it still considers the independent non-executive director to be independent.

              Note: The factors set out in rule 3.13 are included for guidance only and are not intended to be exhaustive. The Exchange may take account of other factors relevant to a particular case in assessing independence.

            • 3.14

              Where a proposed independent non-executive director fails to meet any of the independence guidelines set out in rule 3.13, the listed issuer must demonstrate to the satisfaction of the Exchange, prior to the proposed appointment, that the person is independent. The listed issuer must also disclose the reasons why such person is considered to be independent in the announcement of his appointment as well as in the next annual report published after his appointment. In cases of doubt, the listed issuer must consult the Exchange at an early stage.

            • 3.15

              Independent non-executive directors who were appointed by listed issuers on or before 31 March, 2004 shall submit to the Exchange a written confirmation in respect of the factors set out in rule 3.13 concerning their independence no later than 30 September, 2004.

            • 3.16

              A listed issuer must ensure that its directors accept full responsibility, collectively and individually, for the listed issuer's compliance with the Exchange Listing Rules.

            • 3.17

              Every director shall comply with the Model Code set out in Appendix 10 or the listed issuer's own code on no less exacting terms. The Model Code sets out the required standard which the Exchange requires all listed issuers and their directors to meet and any breach of such required standard will be regarded as a breach of the Exchange Listing Rules. A listed issuer may adopt its own code on terms no less exacting than those set out in the Model Code. Any breach of its own code will not be regarded as a breach of the Exchange Listing Rules provided that the required standard under the Model Code is met.

            • 3.18 [Repealed]

              [Repealed 1 January 2005]

            • 3.19

              In respect of all listed issuers whose securities were admitted to listing on or before 31 March, 2004, the following transitional provisions apply:—

              (1) the listed issuer must have at least one independent non-executive director who has appropriate professional qualifications or accounting or related financial management expertise by 30 September, 2004; and
              (2) the listed issuer must have at least three independent non-executive directors by 30 September, 2004.

            • 3.20

              Every director of a listed issuer shall provide to the Exchange, immediately upon his resignation as a director of the listed issuer, his up-to-date contact information, including his address for correspondence from and service of notices and other documents by the Exchange and telephone number.

            • 3.20A

              By no later than 31 March 2009, a director who was appointed by a listed issuer before 1 January 2009 and who continues to hold office shall execute and submit to the Exchange a new Undertaking in the form set out in Part 2 of Form B or H of Appendix 5 (as the case may be) save for the omission of the declaration set out in paragraph (i) thereof.

          • Audit Committee

            • 3.21

              Every listed issuer must establish an audit committee comprising non-executive directors only. The audit committee must comprise a minimum of three members, at least one of whom is an independent non-executive director with appropriate professional qualifications or accounting or related financial management expertise as required under rule 3.10(2). The majority of the audit committee members must be independent non-executive directors of the listed issuer. The audit committee must be chaired by an independent non-executive director.

              Notes:

              1. The transitional provisions set out in rule 3.19 shall apply.
              2. For further guidance on establishing an audit committee, listed issuers may refer to "A Guide for Effective Audit Committees" published by the Hong Kong Institute of Certified Public Accountants (formerly known as the Hong Kong Society of Accountants) in February 2002. Listed issuers may adopt the terms of reference set out in that guide, or they may adopt any other comparable terms of reference for the establishment of an audit committee.
              3. Please see also the note to rule 3.10(2).

            • 3.22

              The board of directors of the listed issuer must approve and provide written terms of reference for the audit committee which clearly establish the committee's authority and duties.

            • 3.23

              A listed issuer shall immediately inform the Exchange and publish an announcement in accordance with rule 2.07C containing the relevant details and reasons if the listed issuer fails to set up an audit committee or at any time has failed to meet any of the other requirements set out in rule 3.21 regarding the audit committee. Listed issuers shall set up an audit committee and/or appoint appropriate members to the audit committee to meet the requirement(s) within three months after failing to meet such requirement(s).

            • 3.24 [Repealed]

              [Repealed 1 January 2009]

          • Remuneration Committee

            • 3.25

              An issuer must establish a remuneration committee chaired by an independent nonexecutive director and comprising a majority of independent non-executive directors.

            • 3.26

              The board of directors must approve and provide written terms of reference for the remuneration committee which clearly establish its authority and duties.

            • 3.27

              If the issuer fails to set up a remuneration committee or at any time has failed to meet any of the other requirements in rules 3.25 and 3.26, it must immediately publish an announcement containing the relevant details and reasons. Issuers must set up a remuneration committee with written terms of reference and/or appoint appropriate members to it to meet the requirement(s) within three months after failing to meet them.

          • Company Secretary

            • 3.28

              The issuer must appoint as its company secretary an individual who, by virtue of his academic or professional qualifications or relevant experience, is, in the opinion of the Exchange, capable of discharging the functions of company secretary.

              Notes:

              1 The Exchange considers the following academic or professional qualifications to be acceptable:
              (a) a Member of The Hong Kong Institute of Chartered Secretaries;
              (b) a solicitor or barrister (as defined in the Legal Practitioners Ordinance);and
              (c) a certified public accountant (as defined in the Professional Accountants Ordinance).
              2 In assessing "relevant experience", the Exchange will consider the individual's:
              (a) length of employment with the issuer and other issuers and the roles he played;
              (b) familiarity with the Listing Rules and other relevant law and regulations including the Securities and Futures Ordinance, Companies Ordinance, Companies (Winding Up and Miscellaneous Provisions) Ordinance, and the Takeovers Code;
              (c) relevant training taken and/or to be taken in addition to the minimum requirement under rule 3.29; and
              (d) professional qualifications in other jurisdictions.

            • 3.29

              In each financial year an issuer's company secretary must take no less than 15 hours of relevant professional training.

              Note: A person who was a company secretary of an issuer:

              (1) on or after 1 January 2005 must comply with rule 3.29 for the financial year commencing on or after 1 January 2012;
              (2) between 1 January 2000 to 31 December 2004 must comply with rule 3.29 for the financial year commencing on or after 1 January 2013;
              (3) between 1 January 1995 to 31 December 1999 must comply with rule 3.29 for the financial year commencing on or after 1 January 2015; and
              (4) on or before 31 December 1994 must comply with rule 3.29 for the financial year commencing on or after 1 January 2017.

        • Chapter 3A Sponsors and Compliance Advisers

          • Definitions and Interpretation

            • 3A.01

              In this Chapter:

              (1) "Compliance Adviser" means any corporation or authorised financial institution licensed or registered under the Securities and Futures Ordinance for Type 6 regulated activity and permitted under its licence or certificate of registration to undertake work as a sponsor and, as applicable, which is appointed under rule 3A.19 or rule 3A.20 to undertake work as a Compliance Adviser;
              (2) "expert" includes every accountant, engineer, or appraiser, or any person whose profession gives authority to a statement made by him;
              (3) "expert section" means, in relation to the listing document, any part of the listing document purporting to be made on the authority of an expert or purporting to be a copy of or extract from a report, opinion, statement or valuation of an expert where the expert gives consent for the inclusion in the listing document of the copy or extract and the listing document includes a statement that he has given and has not withdrawn such consent;

              Note: Retaining an expert to advise or assist a new applicant or sponsor on any non-expert section of the listing document does of itself not make such section an expert section.
              (4) "Fixed Period" means the period for which a listed issuer must retain a Compliance Adviser under rule 3A.19;
              (5) "initial application for listing", "initial listing" and "initial public offering" include deemed new listings of equity securities under rule 14.54;
              (6) "listed issuer" for the purposes of this Chapter, has the same meaning as in rule 1.01 but excludes an issuer of debt securities only;
              (7) "new applicant" for the purposes of this Chapter, has the same meaning as in rule 1.01, modified for the purpose of this Chapter 3A to:
              (a) include issuers who undergo a deemed listing of equity securities under rule 14.54; and
              (b) exclude applicants seeking listing of debt securities only;
              (8) "non-expert sections" means, in relation to the listing document, any part of the listing document that is not part of any expert section;
              (9) "sponsor group" means:
              (a) a sponsor;
              (b) its holding company;
              (c) any subsidiary of its holding company;
              (d) any controlling shareholder of:
              (i) the sponsor; or
              (ii) its holding company; and
              (e) any close associate of any controlling shareholder referred to in paragraph (d) above; and
              (10) "ultimate holding company" means a holding company that itself does not have a holding company.

          • Appointment of a sponsor

            • 3A.02

              A new applicant must appoint a sponsor under a written engagement agreement to assist it with its initial application for listing.

            • 3A.02A

              (1) A sponsor, once appointed, must notify the Exchange in writing of its appointment as soon as practicable, regardless of whether a listing application has been submitted.

              Note: As a means of notification, a sponsor must provide a copy of its engagement letter to the Exchange as soon as it is formally appointed.
              (2) If a sponsor ceases to act for a new applicant at any time after its appointment (regardless of whether a listing application has been submitted), the sponsor must inform the Exchange in writing, as soon as practicable, of its reasons for ceasing to act.

            • 3A.02B

              (1) A listing application must not be submitted by or on behalf of a new applicant less than 2 months from the date of the sponsor's formal appointment.
              (2) Where more than one sponsor is appointed in respect of a listing application, the listing application can only be submitted not less than 2 months from the date the last sponsor is formally appointed.

          • Sponsor's undertaking and statement of independence to the Exchange

            • 3A.03

              Each sponsor must give an undertaking and statement of independence to the Exchange as set out in Appendix 17 at the same time when an application on behalf of a new applicant is submitted to the Exchange.

              (1) [Repealed 1 October 2013]
              (2) [Repealed 1 October 2013]

            • 3A.04 [Repealed]

              [Repealed 1 October 2013]

          • Obligations of a new applicant and its directors to assist the sponsor

            • 3A.05

              A new applicant and its directors must assist the sponsor to perform its role and must ensure that its substantial shareholders and associates also assist the sponsor. To facilitate the sponsor to meet its obligations and responsibilities under the Exchange Listing Rules and the Code of Conduct, the written engagement agreement referred to in rule 3A.02 must contain at least the following obligations for the applicant and its directors:

              (1) to fully assist the sponsor to perform its due diligence work;
              (2) to procure all relevant parties engaged by the new applicant in connection with its listing application (including financial advisers, experts and other third parties) to cooperate fully with the sponsor to facilitate the sponsor's performance of its duties;
              (3) to give each sponsor every assistance, to meet its obligations and responsibilities under the Exchange Listing Rules and the Code of Conduct to provide information to the regulators including without limitation, notifying the regulators of reasons when the sponsor ceases to act;
              (4) to enable the sponsor to gain access to all relevant records in connection with the listing application. In particular, terms of engagement with experts retained to perform services related to the listing application, whether or not retained in respect of an expert section, should contain clauses entitling every sponsor appointed by the new applicant access to:
              (a) any such expert;
              (b) the expert's reports, draft reports (both written and oral), and terms of engagement;
              (c) information provided to or relied on by the expert;
              (d) information provided by the expert to the Exchange or Commission; and
              (e) all correspondence exchanged (i) between the new applicant or its agents and the expert; and (ii) between the expert and the Exchange or Commission;
              Note: The Exchange expects that access to documents for the purposes of this rule would include the right to take copies of the documents without charge.
              (5) to keep the sponsor informed of any material change to:
              (a) any information previously given to the sponsor under paragraph (3) above; and
              (b) any information previously accessed by the sponsor under paragraph (4) above;
              (6) to provide to or procure for the sponsor all necessary consents to the provision of the information referred to in paragraphs (1) to (5) above to the sponsor; and
              (7) to procure the entering into of such supplements to the engagement letters with experts referred to in rule 3A.05(4) as is necessary for such engagements of experts to comply with that rule.

          • Impartiality and independence of sponsors

            • 3A.06

              A sponsor must perform its duties with impartiality.

            • 3A.07

              At least one sponsor of a new applicant must be independent of it. The sponsor is required to demonstrate to the Exchange its independence or lack of independence and declare in accordance with the terms set out in Appendix 17.

              A sponsor is not independent if any of the following circumstances exist at any time from the date of submission of a listing application on Form A1 up to the date of listing:

              (1) the sponsor group and any director or close associate of a director of the sponsor collectively holds or will hold, directly or indirectly, more than 5% of the number of issued shares of the new applicant, except where that holding arises as a result of an underwriting obligation;
              (2) the fair value of the direct or indirect current or prospective shareholding of the sponsor group in the new applicant exceeds or will exceed 15% of the net equity shown in the latest consolidated financial statements of the sponsor's ultimate holding company or, where there is no ultimate holding company, the sponsor;
              (3) any member of the sponsor group or any director or close associate of a director of the sponsor is a close associate or core connected person of the new applicant;
              (3A) the sponsor is a connected person of the new applicant;
              (4) 15% or more of the proceeds raised from the initial public offering of the new applicant are to be applied directly or indirectly to settle debts due to the sponsor group, except where those debts are on account of fees payable to the sponsor group under its engagement for sponsorship services;
              (5) the aggregate of:
              (a) amounts due to the sponsor group from the new applicant and its subsidiaries; and
              (b) all guarantees given by the sponsor group on behalf of the new applicant and its subsidiaries,
              exceeds 30% of the total assets of the new applicant;
              (6) the aggregate of:
              (a) amounts due to the sponsor group from:
              (i) the new applicant;
              (ii) its subsidiaries;
              (iii) its controlling shareholder; and
              (iv) any close associates of its controlling shareholder; and
              (b) all guarantees given by the sponsor group on behalf of:
              (i) the new applicant;
              (ii) its subsidiaries;
              (iii) its controlling shareholder; and
              (iv) any close associates of its controlling shareholder,
              exceeds 10% of the total assets shown in the latest consolidated financial statements of the sponsor's ultimate holding company or, where there is no ultimate holding company, the sponsor;
              (7) the fair value of the direct or indirect shareholding of:
              (a) a director of the sponsor;
              (b) a director of its holding company;
              (c) a close associate of a director of the sponsor; or
              (d) a close associate of a director of its holding company
              in the new applicant exceeds HKD 5 million;
              (8) an employee or director of the sponsor who is directly engaged in providing the sponsorship services to the new applicant, or his close associate, holds or will hold shares in the new applicant or has or will have a beneficial interest in shares in it;
              (9) any of the following has a current business relationship with the new applicant or a director, subsidiary, holding company or substantial shareholder of the new applicant, which would be reasonably considered to affect the sponsor's independence in performing its duties as set out in this Chapter, or might reasonably give rise to a perception that the sponsor's independence would be so affected, except where that relationship arises under the sponsor's engagement to provide sponsorship services:
              (a) any member of the sponsor group;
              (b) an employee of the sponsor who is directly engaged in providing the sponsorship services to the new applicant;
              (c) a close associate of an employee of the sponsor who is directly engaged in providing the sponsorship services to the new applicant;
              (d) a director of any member of the sponsor group; or
              (e) a close associate of a director of any member of the sponsor group;
              (10) the sponsor or a member of the sponsor group is the auditor or reporting accountant of the new applicant.

              Notes:
              1. In addition to being a breach of the Exchange Listing Rules, if it comes to the Exchange's attention that a sponsor is not independent but is required to be (for example, where the sponsor is the sole sponsor appointed), the Exchange will not accept documents produced by that sponsor in support of the subject application for listing or a request for approval or vetting of any document required under the Exchange Listing Rules in relation to the subject listing application.
              2. Sub-paragraphs (1) to (3) will not apply where the circumstance occurs because of an interest:
              (a) held by an investment entity on behalf of its discretionary clients;
              (b) held by a fund manager on a non-discretionary basis such as a managed account or managed fund;
              (c) held in a market-making capacity; or
              (d) held in a custodial capacity.
              3. In calculating the percentage figure of shares that it holds, or will hold, for the purposes of this rule, a sponsor group is not required to include an interest in shares that would be disregarded for the purposes of Divisions 2 to 4 of Part XV of the Securities and Futures Ordinance under section 323 of that Ordinance.
              4. For the purposes of this rule, references to a "new applicant" include references to the new applicant once it is listed, that is, the newly listed issuer, as applicable.

            • 3A.08 [Repealed]

              [Repealed 1 October 2013]

            • 3A.09

              Where a sponsor or the new applicant becomes aware of a change in the circumstances set out in the sponsor's undertaking and statement of independence in Appendix 17 during the period the sponsor is engaged by the new applicant, the sponsor and the new applicant must notify the Exchange as soon as possible upon that change occurring.

          • Additional sponsors

            • 3A.10

              Where a new applicant has more than one sponsor:

              (1) the Exchange must be advised as to which of the sponsors is designated as the sponsor who would be the primary channel of communication with the Exchange concerning matters involving the listing application;
              (2) the listing document must disclose whether each sponsor satisfies the independence test at rule 3A.07 and, if not, how the lack of independence arises; and
              (3) each of the sponsors has responsibility for ensuring that the obligations and responsibilities in this Chapter are fully discharged.

              Note: The Exchange would normally expect the sponsor acting as the primary channel of information to be independent from the new applicant.

          • Sponsor's role

            • 3A.11

              A sponsor must:

              (1) be closely involved in the preparation of the new applicant's listing documents;
              (2) conduct reasonable due diligence inquiries to put itself in a position to be able to make the declaration in rule 3A.13 and Appendix 19;
              (3) ensure the requirements in rules 9.03 and 9.05 to 9.08 are complied with;
              (4) use reasonable endeavours to address all matters raised by the Exchange in connection with the listing application including providing to the Exchange, in a timely manner, such information as the Exchange may reasonably require for the purpose of verifying whether the Exchange Listing Rules are being or have been complied with by the sponsor, the new applicant and the new applicant's directors;
              (5) accompany the new applicant to any meetings with the Exchange unless otherwise requested by the Exchange, and attend any other meetings and participate in any other discussions with the Exchange as requested by the Exchange; and
              (6) comply with the terms of the undertaking and statement of independence given to the Exchange by the sponsor under rule 3A.03 and Appendix 17.

            • 3A.12

              In determining the reasonable due diligence inquiries a sponsor must make for the purposes of rule 3A.11(2), a sponsor must have regard to the due diligence practice note at Practice Note 21 and the SFC Sponsor Provisions.

          • Sponsor's declaration

            • 3A.13

              As soon as practicable after the Listing Committee's hearing of the new applicant's listing application but on or before the date of issue of the listing document, each sponsor must submit to the Exchange the declaration set out in Appendix 19.

            • 3A.14 [Repealed]

              [Repealed 1 October 2013]

            • 3A.15 [Repealed]

              [Repealed 1 October 2013]

            • 3A.16 [Repealed]

              [Repealed 1 October 2013]

          • Termination of a sponsor's role

            • 3A.17

              In the case of resignation by, or termination of, the sponsor during the processing of the initial listing application:

              (1) the new applicant must immediately notify the Exchange of the resignation or termination and the sponsor must notify the Exchange of its resignation or termination together with reasons in accordance with rule 3A.02A(2); and
              (2) if the departing sponsor was the sole independent sponsor, the replacement sponsor must notify the Exchange of its appointment in accordance with rule 3A.02A(1) and re-submit, on behalf of the new applicant, a listing application not less than 2 months from the date of its formal appointment detailing a revised timetable together with a further initial listing fee in accordance with Chapter 9 and the declaration and undertaking required by this Chapter.

              Note: Any initial listing fee already paid will, in such circumstances, be forfeited.

            • 3A.18

              For the avoidance of doubt, a replacement sponsor shall not be regarded as having satisfied any of the obligations of a sponsor by virtue of work performed by a predecessor sponsor.

          • Appointment of a Compliance Adviser

            • 3A.19

              A listed issuer must appoint a Compliance Adviser for the period commencing on the date of initial listing of the listed issuer's equity securities and ending on the date on which the listed issuer complies with rule 13.46 in respect of its financial results for the first full financial year commencing after the date of its initial listing.

            • 3A.20

              At any time after the Fixed Period, the Exchange may direct a listed issuer to appoint a Compliance Adviser for such period and to undertake such role as may be specified by the Exchange. In the event of such an appointment the Exchange will specify the circumstances in which the listed issuer must consult the Compliance Adviser and the responsibilities the Compliance Adviser must discharge. The Compliance Adviser must discharge those responsibilities with due care and skill. For the purpose of this rule, a listed issuer may appoint a different Compliance Adviser to that it appointed under rule 3A.19.

              Note: The Exchange will normally consider directing the appointment of a Compliance Adviser when a listed issuer has been held to have breached the Exchange Listing Rules, particularly when the breaches are persistent or serious or give rise to concerns about the adequacy of compliance arrangements or the directors' understanding of, and their obligations to comply with the Exchange Listing Rules. It is also open to the Exchange to direct the appointment in other appropriate circumstances. It is the responsibility of the listed issuer to pay the reasonable fees of the Compliance Adviser.

          • Compliance Adviser's undertaking to the Exchange

            • 3A.21

              Each Compliance Adviser must give an undertaking to the Exchange in the terms set out in rule 3A.22 below and in the form in Appendix 20. Compliance Advisers must give the undertaking no later than the earlier of:

              (1) immediately the Compliance Adviser agrees its terms of engagement with the listed issuer; and
              (2) the Compliance Adviser commencing work for the listed issuer.

            • 3A.22

              Each Compliance Adviser must undertake to:

              (1) comply with the Exchange Listing Rules applicable to Compliance Advisers; and
              (2) cooperate in any investigation conducted by the Listing Division and/or the Listing Committee of the Exchange, including answering promptly and openly any questions addressed to the Compliance Adviser, promptly producing the originals or copies of any relevant documents and attending before any meeting or hearing at which the Compliance Adviser is requested to appear.

            • 3A.23

              During the Fixed Period, a listed issuer must consult with and, if necessary, seek advice from its Compliance Adviser on a timely basis in the following circumstances:

              (1) before the publication of any regulatory announcement, circular or financial report;
              (2) where a transaction, which might be a notifiable or connected transaction, is contemplated including share issues and share repurchases;
              (3) where the listed issuer proposes to use the proceeds of the initial public offering in a manner different from that detailed in the listing document or where the business activities, developments or results of the listed issuer deviate from any forecast, estimate, or other information in the listing document; and
              (4) where the Exchange makes an inquiry of the listed issuer under rule 13.10.

            • 3A.24

              When a Compliance Adviser is consulted by a listed issuer in the circumstances set out in rule 3A.23 above it must discharge the following responsibilities with due care and skill:

              (1) ensure the listed issuer is properly guided and advised as to compliance with the Exchange Listing Rules and all other applicable laws, rules, codes and guidelines;
              (2) accompany the listed issuer to any meetings with the Exchange, unless otherwise requested by the Exchange;
              (3) no less frequently than at the time of reviewing the financial reporting of the listed issuer under rule 3A.23(1) above and upon the listed issuer notifying the Compliance Adviser of a proposed change in the use of proceeds of the initial public offering under rule 3A.23(3) above, discuss with the listed issuer:
              (a) the listed issuer's operating performance and financial condition by reference to the listed issuer's business objectives and use of issue proceeds as stated in its listing document;
              (b) compliance with the terms and conditions of any waivers granted from the Exchange Listing Rules;
              (c) whether any profit forecast or estimate in the listing document will be or has been met by the listed issuer and advise the listed issuer to notify the Exchange and inform the public in a timely and appropriate manner; and
              (d) compliance with any undertakings provided by the listed issuer and its directors at the time of listing, and, in the event of non-compliance, discuss the issue with the listed issuer's board of directors and make recommendations to the board regarding appropriate remedial steps;
              (4) if required by the Exchange, deal with the Exchange in respect of any or all matters listed in rule 3A.23;
              (5) in relation to an application by the listed issuer for a waiver from any of the requirements in Chapter 14A, advise the listed issuer on its obligations and in particular the requirement to appoint an independent financial adviser; and
              (6) assess the understanding of all new appointees to the board of the listed issuer regarding the nature of their responsibilities and fiduciary duties as a director of a listed issuer, and, to the extent the Compliance Adviser forms an opinion that the new appointees' understanding is inadequate, discuss the inadequacies with the board and make recommendations to the board regarding appropriate remedial steps such as training.

          • Impartiality of Compliance Advisers

            • 3A.25

              A Compliance Adviser must perform its duties with impartiality.

          • Termination of a Compliance Adviser's role

            • 3A.26

              A listed issuer may terminate a Compliance Adviser's role only if the Compliance Adviser's work is of an unacceptable standard or if there is a material dispute (which cannot be resolved within 30 days) over fees payable by the listed issuer to the Compliance Adviser.

            • 3A.27

              In the case of resignation by, or termination of, a Compliance Adviser, a replacement Compliance Adviser must be appointed by the listed issuer within 3 months of the effective date of resignation or termination (as the case may be).

          • Application of other rules

            • 3A.28

              Insofar as the Exchange Listing Rules impose a higher standard of conduct on sponsors or Compliance Advisers than that set out in the Commission's Corporate Finance Adviser Code of Conduct, the Code of Conduct, the Takeovers Code, the Share Buy-backs Code and all other relevant codes and guidelines applicable to them, the Exchange Listing Rules will prevail.

              Notes:

              1. The Exchange notes that paragraph 4.4 of the Corporate Finance Adviser Code of Conduct requires that all requirements applicable to sponsors as set out in the Exchange Listing Rules be satisfied.
              2. The Exchange also reminds sponsors and Compliance Advisers of their other statutory obligations including but not limited to those under the Securities and Futures Ordinance.

          • Miscellaneous

            • 3A.29

              If a Compliance Adviser resigns or its engagement is terminated, a listed issuer must, as soon as practicable, publish an announcement, in accordance with rule 13.51(6), and make arrangements to replace the Compliance Adviser under rule 3A.27. Immediately after a replacement Compliance Adviser has been appointed, the listed issuer must inform the Exchange and publish a further announcement.

              Note: Refer to rules 3A.26 and 3A.27 regarding circumstances in which the termination or resignation of a Compliance Adviser is permitted.

            • 3A.30

              If the licence or registration of a sponsor or a Compliance Adviser is revoked, suspended, varied or restricted such that it is no longer permitted to undertake work as a sponsor or a Compliance Adviser, respectively, the sponsor or Compliance Adviser, as applicable, must immediately inform each of the issuers for which it acts as sponsor or Compliance Adviser.

            • 3A.31 [Repealed]

              [Repealed 1 October 2013]

        • Chapter 4 Accountants' Reports and Pro Forma Financial Information

          • When Required

            • 4.01

              This Chapter sets out the detailed requirements for accountants' reports on the profits and losses, assets and liabilities of, and other financial information on, an issuer and/or a business or company, to be acquired or disposed of (as the case may be) by an issuer for inclusion in listing documents or circulars. Accountants' reports are required to be included in the following listing documents and circulars:—

              (1) a listing document issued by a new applicant (paragraph 37 of Part A of Appendix 1) but subject to rule 11.09(7);
              (2) a listing document issued by a listed issuer in connection with an offer of securities to the public for subscription or purchase which is required by either section 38(1) or section 342(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance to set out the reports specified in Part II of the Third Schedule to that Ordinance; and
              (3) a circular issued in connection with a reverse takeover (see rule 14.69), a very substantial acquisition (see rule 14.69) or a major transaction (see rule 14.67) (unless the company being acquired is itself a listed company on the Main Board or GEM).

            • 4.02

              These requirements do not apply in the case of an issue of debt securities by a State or Supranational.

          • Reporting Accountants

            • 4.03

              All accountants' reports must normally be prepared by certified public accountants who are qualified under the Professional Accountants Ordinance for appointment as auditors of a company and who are independent both of the issuer and of any other company concerned to the same extent as that required of an auditor under the Companies Ordinance and in accordance with the requirements on independence issued by the Hong Kong Institute of Certified Public Accountants, provided that, in the case of a circular issued by a listed issuer in connection with the acquisition of an overseas company, the Exchange may be prepared to permit the accountants' report to be prepared by a firm of practising accountants which is not so qualified but which is acceptable to the Exchange. Such a firm must normally have an international name and reputation and be a member of a recognised body of accountants.

          • Basic Contents of Accountants' Report for a Listing Document

            • 4.04

              In the case of a new applicant (rule 4.01(1)) and an offer of securities to the public for subscription or purchase falling within rule 4.01(2) the accountants' report must include:—

              History of results

              (1) the results of the issuer or, if the issuer is a holding company, the consolidated results of the issuer and its subsidiaries in respect of each of the three financial years immediately preceding the issue of the listing document or such shorter period as may be acceptable to the Exchange (see rules 8.05A, 8.05B and 23.06);
              (2) the results of any business or subsidiary acquired, agreed to be acquired or proposed to be acquired since the date to which the latest audited financial statements of the issuer have been made up (on the same basis, where the subsidiary is itself a holding company, as in rule 4.04(1)) in respect of each of the three financial years immediately preceding the issue of the listing document or in respect of each of the financial years since commencement of such business or the incorporation or other establishment of such subsidiary (as the case may be) if this occurred less than three years prior to such issue or such shorter period as may be acceptable to the Exchange (see rules 8.05A, 8.05B and 23.06);

              Statement of financial position

              (3)
              (a) the statement of financial position of the issuer and, if the issuer is itself a holding company, the consolidated statement of financial position of the issuer and its subsidiaries in each case as at the end of each of the three financial years to which the latest audited financial statements of the issuer have been made up except that if the listing document is not required by either section 38(1) or section 342(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance to set out the reports specified in Part II of the Third Schedule of that Ordinance and the issuer is itself a holding company then the accountants' report need only include the consolidated statement of financial position of the issuer and its subsidiaries;
              (b) in the case of banking companies, the statement of financial position as at the end of each of the three financial years prepared in accordance with rule 4.04(3)(a) must include information on the assets and liabilities set out in the Guideline on the Application of the Banking (Disclosure) Rules issued by the Hong Kong Monetary Authority;
              (4)
              (a) the statement of financial position of any business or subsidiary acquired, agreed to be acquired or proposed to be acquired since the date to which the latest audited financial statements of the issuer have been made up (on the same basis, where the subsidiary is itself a holding company, as in rule 4.04(3)) in each case as at the end of each of the three financial years to which the latest audited financial statements of such business or subsidiary (as the case may be) have been made up;
              (b) in the case of banking companies, the statement of financial position as at the end of each of the three financial years prepared in accordance with rule 4.04(4)(a) must include information on the assets and liabilities set out in the Guideline on the Application of the Banking (Disclosure) Rules issued by the Hong Kong Monetary Authority;

              Cash flow statement

              (5) the cash flow statement of the issuer or, if the issuer is itself a holding company, the consolidated cash flow statement of the issuer and its subsidiaries in each case for each of the three financial years to which the latest audited financial statements of the issuer have been made up;

              Statement of changes in equity

              (6) a statement of changes in equity of the issuer for each of the three financial years to which the latest audited financial statements of the issuer have been made up;
              (7) [Repealed 31 December 2015]

              Other

              (8) the earnings per share and the basis of computation in respect of each of the financial years referred to in rules 4.04(1) and 4.04(2) except that the accountants' report need not include this information if, in the opinion of the reporting accountants, such information is not meaningful having regard to the purpose of the accountants' report or if combined results are presented in accordance with rule 4.09 or if the accountants' report relates to an issue of debt securities;
              (9) all movements to and from any reserves including movements arising from:—
              (a) consolidation or acquisition (i.e. the write off of goodwill/establishment of a capital reserve);
              (b) the revaluation of assets;
              (c) the translation of financial statements denominated in foreign currencies; or
              (d) the redemption or repurchase of shares of the issuer,

              if those movements are not reflected in the results in respect of each of the financial years referred to in rules 4.04(1) and 4.04(2);
              (10) a statement of the indebtedness as at the end of the period reported on showing, as regards bank loans and overdrafts and separately as regards other borrowings of the issuer (or of the issuer and its subsidiaries, including any company which will become a subsidiary by reason of any acquisition falling within rules 4.04(2) and (4)), the aggregate amounts repayable:—
              (a) on demand or within a period not exceeding one year;
              (b) within a period of more than one year but not exceeding two years;
              (c) within a period of more than two years but not exceeding five years; and
              (d) within a period of more than five years;
              (11) the details of the principal accounting policies which have been applied in respect of the period reported on;
              (12) a statement of any significant subsequent events which have occurred to any business or company or within any group covered by the accountants' report since the end of the period reported on or, if there are no such events, a statement of that fact; and
              (13) any other matters which appear to the reporting accountants to be relevant having regard to the purpose of the accountants' report.

          • Specific detail concerning financial information

            • 4.05

              The report on results and financial position under rules 4.04(1) to (4) must include the disclosures required under the relevant accounting standards adopted and disclose separately the following information:—

              (1) Statement of profit or loss and other comprehensive income
              (a) profit (or loss) on sale of properties;
              (b) profit (or loss) before taxation, including the share of the profit (or loss) of associates and joint ventures, with separate disclosure of any items included therein which are exceptional because of size, nature and incidence; and
              (c) taxation on profits (Hong Kong and overseas) in each case indicating the basis of computation, with separate disclosure of the taxation on share of associates' and joint ventures' profits;
              (2) Statement of financial position information as follows, if applicable:
              (a) ageing analysis of accounts receivable; and
              (b) ageing analysis of accounts payable;
              Notes:
              1 If an issuer/ a company is itself a holding company, the information referred to rule 4.05(2) above is of the consolidated statement of financial position of the issuer/ the company and its subsidiaries.
              2 The ageing analysis should normally be presented on the basis of the date of the relevant invoice or demand note and categorised into time-bands based on analysis used by an issuer's management to monitor the issuer's financial position. The basis on which the ageing analysis is presented should be disclosed.
              (3) Dividends
              (a) rates of dividend paid or proposed on each class of shares (with particulars of each such class) and amounts absorbed thereby and any waivers of dividend except that the accountants' report need not disclose this information:—
              (i) if combined results are presented in accordance with rule 4.09 and, in the opinion of the reporting accountants, such information is not meaningful having regard to the purpose of the report;
              (ii) if the accountants' report relates to an issue of debt securities; or
              (iii) in the case of a major transaction; and
              (b) details of any special dividend proposed to be paid after the date of the accountants' report; and
              (4) in the case of banking companies, the information on results and financial position set out in the Guideline on the Application of the Banking (Disclosure) Rules issued by the Hong Kong Monetary Authority must be provided in place of that set out in rule 4.05(1) and rule 4.05(2).

          • Additional disclosure of pre-acquisition financial information for a Listing Document

            • 4.05A

              Where a new applicant acquires any material subsidiary or business during the trading record period (see rule 4.04(1)) and such an acquisition if made by a listed issuer would have been classified at the date of application as a major transaction (see rule 14.06(3)) or a very substantial acquisition (see rule 14.06(5)), it must disclose pre-acquisition financial information on that material subsidiary or business from the commencement of the trading record period (or if the material subsidiary or business commenced its business after the commencement of the trading record period, then from the date of the commencing of its business) to the date of acquisition. Pre-acquisition financial information on the material subsidiary or business must normally be drawn up in conformity with accounting policies adopted by the new applicant and be disclosed in the form of a note to the accountants' report or in a separate accountants' report.

              Note: For the purpose of determining whether an acquisition is material and falls within the classification of a major transaction or a very substantial acquisition, reference shall be made to total assets, profits or revenue (as the case may be) of the acquired business or subsidiary and this shall be compared to the total assets, profits or revenue (as the case may be) of the new applicant as shown in the most recent financial year of the trading record period.

          • Basic Contents of Accountants' Report for Certain Notifiable Transaction Circulars

            • 4.06

              In the cases referred to in rule 4.01(3) concerning a circular in connection with a reverse takeover, a very substantial acquisition or a major transaction on the acquisition of a business, company or companies, the accountants' report must include:—

              History of results

              (1)
              (a) the results, for the relevant period, of the business which, or of the company (or, if that company is itself a holding company, of the company and its subsidiaries) in whose share capital an interest, has been acquired, agreed to be acquired or is proposed to be acquired since the date to which the latest published audited financial statements of the issuer have been made up; provided always that where any company in question has not or will not become a subsidiary of the issuer, the Exchange may be prepared to relax this requirement;

              Note: For the purposes of this rule, the "relevant period" comprises:
              (1) in the case of a reverse takeover, each of the three financial years of the business or company immediately preceding the issue of the circular and where applicable a stub period;
              (2) in the case of a very substantial acquisition or a major transaction, (i) each of the three financial years of the business or company immediately preceding the issue of the circular and where applicable a stub period; or (ii) if the audited financial statements of the business or company for the latest completed financial year has not been prepared at the time of the issue of the circular, each of the three financial years of the business or company immediately preceding the latest completed financial year and a stub period; or
              (3) such shorter period as may be acceptable to the Exchange
              provided that the relevant period must have ended 6 months or less before the issue of the circular. If the business or company has been in existence for less than the period set out in (1) or (2) above (as the case may be), the relevant period commences on the commencement of the business or the incorporation or establishment of the company.
              (b) in the case of banking companies, the report on results prepared in accordance with rule 4.06(1)(a) must include the information on results set out in the Guideline on the Application of the Banking (Disclosure) Rules issued by the Hong Kong Monetary Authority;

              Statement of financial position

              (2)
              (a) the statement of financial position of the business which, or of the company (and, if that company is itself a holding company, the consolidated statement of financial position of the company and its subsidiaries) in whose share capital an interest, has been acquired, agreed to be acquired or is proposed to be acquired since the date to which the latest published audited financial statements of the issuer have been made up, in each case as at the end of each of the three financial years (or the end of each of the financial years since commencement of such business or the incorporation or establishment of such company, as the case may be, if less) to which the latest audited financial statements of such business or company (as the case may be) have been made up;
              (b) in the case of banking companies, the statement of financial position as at the end of each of the three financial years (or the end of each of the financial years since commencement of such business or the incorporation or establishment of such company, as the case may be, if less) must include the information on the assets and liabilities set out in the Guideline on the Application of the Banking (Disclosure) Rules issued by the Hong Kong Monetary Authority;

              Cash flow statement

              (3) the cash flow statement of the business which, or of the company (or, if that company is itself a holding company, of the company and its subsidiaries) in whose share capital an interest has been acquired, agreed to be acquired or is proposed to be acquired since the date to which the latest published audited financial statements of the issuer have been made up, in each case for each of the three financial years (or for each of the financial years since commencement of such business or the incorporation or establishment of such company, as the case may be, if less) to which the latest audited financial statements of such business or company (as the case may be) have been made up;

              Statement of changes in equity

              (4) a statement of changes in equity of the business which, or of the company (or, if that company is itself a holding company, of the company and its subsidiaries) in whose share capital an interest, has been acquired, agreed to be acquired or is proposed to be acquired since the date to which the latest published audited financial statements of the issuer have been made up, in each case for each of the three financial years (or for each of the financial years since commencement of such business or the incorporation or establishment of such company, as the case may be, if less) to which the latest audited financial statements of such business or company (as the case may be) have been made up;
              (5) [Repealed 31 December 2015]
              (6) all movements to and from any reserves including movements arising from:—
              (a) consolidation or acquisition (i.e. the write off of goodwill/establishment of a capital reserve);
              (b) the revaluation of assets;
              (c) the translation of financial statements denominated in foreign currencies; or
              (d) the redemption or repurchase of shares of the issuer,
              if those movements are not reflected in the results in respect of each of the financial years referred to in rule 4.06(1);
              (7) a statement of the indebtedness as at the end of the period reported on showing, as regards bank loans and overdrafts and separately as regards other borrowings of the business or company or company and its subsidiaries covered by the accountants' report, the aggregate amounts repayable:—
              (a) on demand or within a period not exceeding one year;
              (b) within a period of more than one year but not exceeding two years;
              (c) within a period of more than two years but not exceeding five years; and
              (d) within a period of more than five years,
              except that such an analysis of debt repayments need not be included in the case of a major transaction (see rule 14.67);
              (8) the details of the principal accounting policies which have been applied in respect of the period reported on;
              (9) a statement of any significant subsequent events which have occurred to any business or company or company and its subsidiaries covered by the accountants' report since the end of the period reported on or, if there are no such events, a statement of that fact; and
              (10) any other matters which appear to the reporting accountants to be relevant having regard to the purpose of the accountants' report.

            • 4.06A [Repealed]

              [Repealed 3 June 2010]

            • 4.07

              The report on results and financial position under rules 4.06(1) and 4.06(2) must disclose separately the information referred to in rule 4.05.

          • Requirements Applicable in All Cases

            • 4.08

              In all cases:—

              (1) the accountants' report must include a statement of:
              (a) whether or not the financial statements for the period reported on have been audited and, if so, by whom; and
              (b) whether or not any audited financial statements have been made up since the end of the last financial period reported on;
              (2) the reporting accountants must express an opinion as to whether or not the relevant information gives, for the purposes of the accountants' report, a true and fair view of the results and cash flows for the period reported on and of the statement of financial position as at the end of each of the period reported on;
              (3) the accountants' report must state that it has been prepared in accordance with the Auditing Guideline — Prospectuses and the reporting accountant (Statement 3.340) issued by the Hong Kong Institute of Certified Public Accountants;
              (4) the reporting accountants must be named in the accountants' report; and
              (5) the accountants' report must be dated.

          • Individual Or Combined Results

            • 4.09

              (1) In the case of a new applicant (rule 4.01(1)) and an offer of securities to the public for subscription or purchase falling within rule 4.01(2), the reporting accountants must report on the consolidated or combined financial history of results and the consolidated or combined statement of financial position of the issuer and its subsidiaries and any business or subsidiary acquired or proposed to be acquired since the date to which the latest audited financial statements of the issuer have been made up, unless otherwise agreed by the Exchange.
              (2) In the case of a circular issued by a listed issuer in connection with the acquisition of more than one business and/or company and/or group of companies, the reporting accountants must report on the individual financial histories of results and the individual statements of financial position of each of those businesses, companies or groups of companies referred to in rule 4.06, unless otherwise agreed by the Exchange.

          • Disclosure

            • 4.10

              The information to be disclosed in respect of rules 4.04 to 4.09 must be in accordance with best practice which is at least that required to be disclosed in respect of those specific matters in the accounts of a company under the HKFRS, IFRS or CASBE in the case of a PRC issuer that has adopted CASBE for the preparation of its annual financial statements and, in the case of banking companies, the Guideline on the Application of the Banking (Disclosure) Rules issued by the Hong Kong Monetary Authority.

          • Accounting Standards

            • 4.11

              The financial history of results and the statement of financial position included in the accountants' report must normally be drawn up in conformity with:—

              (a) Hong Kong Financial Reporting Standards (HKFRS); or
              (b) International Financial Reporting Standards (IFRS); or
              (c) China Accounting Standards for Business Enterprises (CASBE) in the case of a PRC issuer that has adopted CASBE for the preparation of its annual financial statements.

              Note: The issuer must apply one of these bodies of standards consistently and shall not change from one body of standards to the other.

            • 4.12

              Any significant departure from such accounting standards must be disclosed and explained and, to the extent practicable, the financial effects of such departure quantified.

            • 4.13

              The relevant standards will normally be those current in relation to the last financial year reported on and, wherever possible, appropriate adjustments must be made to show profits for all periods in accordance with such standards.

          • Statement of Adjustments

            • 4.14

              In preparing the accountants' report, the reporting accountants must make such adjustments (if any) as are in their opinion appropriate for the purposes of the accountants' report and state therein that all adjustments considered necessary have been made, or (where appropriate) that no adjustments were considered necessary. Where adjustments are made, a written statement (the statement of adjustments) is required to be made available for public inspection, and must be signed by the reporting accountants (see paragraph 53 of Part A and paragraph 43 of Part B of Appendix 1 ).

            • 4.15

              The statement of adjustments must set out, for each of the years reported upon, each adjustment made and be sufficiently detailed so as to reconcile the figures in the accountants' report with the corresponding figures in the audited financial statements and must give the reasons therefor.

            • 4.16

              Where an accountants' report is set out in a listing document the statement of adjustments relating to that report must be submitted to the Exchange in the draft form prescribed in rules 9.11(3c), 9.19(2) and 24.10(7) and in certified form in accordance with rules 9.11(28a) and 24.13(2). In every other case, the statement of adjustments must be submitted to the Exchange at the same time as the proofs of the circular containing the accountants' report are submitted.

          • Reference to Other Reports

            • 4.17

              Where the reporting accountants refer to reports, confirmations or opinions of valuers, accountants or other experts, the names, addresses and professional qualifications of such other persons or firms must be stated in the report. In any case, the listing document or circular will be required to include a statement that such other persons or firms have given and have not withdrawn their written consent to its issue with the inclusion of such references in the form and context in which they are included.

          • Qualified or Modified Reports

            • 4.18

              Where the reporting accountants qualify or modify their accountants' report, they must refer to all material matters about which they have reservations. All reasons for the qualification or modification must be given and its effect quantified if this is both relevant and practical. A qualified or modified accountants' report in respect of a new applicant may not be acceptable where the qualification or modification relates to a matter of significance to investors.

            • 4.19

              Where the accountants' report relates to a very substantial disposal or an acquisition which is a reverse takeover, a very substantial acquisition or a major transaction and the report is expected to be qualified, the Exchange must be consulted at an early stage.

          • Overseas Issuers

            • 4.20

              Special requirements apply in the case of overseas issuers and PRC issuers which are set out in Chapters 19, 19A and 36.

          • Debt Securities of State Corporations and Banks

            • 4.21

              These requirements are modified in the case of an issue of debt securities by State corporations and banks as set out in rules 33.03 and 34.06.

          • Additional Matters for Disclosure

            • 4.22

              Where the business of the issuer necessitates extra disclosure to the members in its annual financial statements by virtue of special legislation, the equivalent disclosure must be made in the report.

          • General

            • 4.23 [Repealed]

              [Repealed 31 December 2015]

            • 4.24

              It is emphasised that these requirements are not exhaustive and that further information may be required, or the required information varied, by the Exchange where it considers it necessary. In cases of doubt or difficulty, the reporting accountants must consult the Exchange through the issuer's authorised representative or financial adviser, in the case of a listed issuer, or the issuer's sponsor, in the case of a new applicant.

          • Pro Forma Financial Information

            • 4.25

              In the cases referred to in rule 4.01(3) concerning a circular in connection with a major transaction, the pro forma financial information required under rules 14.67(6)(a)(ii) or 14.67(6)(b)(ii) on the enlarged group (i.e. the issuer, its subsidiaries and any business or subsidiary or, where applicable, assets acquired or proposed to be acquired since the date to which the latest audited financial statements of the issuer have been made up (including but not limited to any business, company or companies being acquired)) must include all the information referred to in rule 4.29 in respect of such enlarged group.

            • 4.26

              In the cases referred to in rule 4.01(3) concerning a circular in connection with a reverse takeover or a very substantial acquisition, the pro forma financial information required under rules 14.69(4)(a)(ii) or 14.69(4)(b)(ii) on the enlarged group (i.e. the issuer, its subsidiaries and any business or subsidiary or, where applicable, assets acquired or proposed to be acquired since the date to which the latest audited financial statements of the issuer have been made up (including but not limited to any business, company or companies being acquired)) must include all the information referred to in rule 4.29 in respect of such enlarged group.

            • 4.27

              For a circular in connection with a very substantial disposal, the pro forma financial information required under rules 14.68(2)(a)(ii) or 14.68(2)(b)(ii) on the remaining group must include the information referred to in rule 4.29 in respect of the remaining group.

            • 4.28

              In the case of a new applicant (rule 4.01(1)) which has acquired or proposed to acquire any businesses or companies, which would at the date of application or such later date of acquisition before listing of the applicant be classified as a major subsidiary, since the date to which the latest audited financial statements of the issuer have been made up, it must include in its listing document the pro forma financial information required under rule 4.29 in respect of the enlarged group (i.e. the new applicant, its subsidiaries and any businesses or companies acquired or proposed to be acquired since the date to which the latest audited financial statements of the issuer have been made up).

              Note: For purposes of rule 4.28, all acquisitions or proposed acquisitions since the date to which the latest audited financial statements in the accountants' report of the issuer have been made up, whether of businesses or companies, should be aggregated. If the aggregated total assets, profits or revenue represents 5% or more under any of the percentage ratios as defined under rule 14.04(9), these acquisitions will be deemed to be an acquisition of a major subsidiary for the purpose of rule 4.28. 100% of the major subsidiary's total assets, profits or revenue (as the case may be) or, where the major subsidiary itself has subsidiaries, the consolidated total assets, profits or revenue (as the case may be) of the major subsidiary is to be compared to the total assets, profits or revenue (as the case may be) shown in the issuer's latest audited consolidated financial statements in the accountants' report irrespective of the interest held in the major subsidiary.

            • 4.29

              Where an issuer includes pro forma financial information in any document (whether or not such disclosure of pro forma financial information is required under the Exchange Listing Rules), that information must comply with rules 4.29(1) to (6) and a report in the terms of rule 4.29(7) must be included in the relevant document.

              (1) The pro forma financial information must provide investors with information about the impact of the transaction the subject of the document by illustrating how that transaction might have affected the financial information presented in the document, had the transaction been undertaken at the commencement of the period being reported on or, in the case of a pro forma statement of financial position or net asset statement, at the date reported. The pro forma financial information presented must not be misleading, must assist investors in analysing the future prospects of the issuer and must include all appropriate adjustments permitted by rule 4.29(6), of which the issuer is aware, necessary to give effect to the transaction as if the transaction had been undertaken at the commencement of the period being reported on or, in the case of a pro forma statement of financial position or net asset statement, at the date reported on.
              (2) The information must clearly state:
              (a) the purpose for which it has been prepared;
              (b) that it is prepared for illustrative purposes only; and
              (c) that because of its nature, it may not give a true picture of the issuer's financial position or results.
              (3) The information must be presented in columnar format showing separately the unadjusted financial information, the pro forma adjustments and the pro forma financial information. The pro forma financial information must be prepared in a manner consistent with both the format and accounting policies adopted by the issuer in its financial statements and must identify:
              (a) the basis upon which it is prepared; and
              (b) the source of each item of information and adjustment.
              Pro forma figures must be given no greater prominence in the document than audited figures.
              (4) Pro forma financial information may only be published in respect of:
              (a) the current financial period;
              (b) the most recently completed financial period; and/or
              (c) the most recent interim period for which relevant unadjusted information has been or will be published or is being published in the same document;
              and, in the case of a pro forma statement of financial position or net asset statement, as at the date on which such periods end or ended.
              (5) The unadjusted information must be derived from the most recent:
              (a) audited published financial statements, published interim reports or published interim or annual results announcements;
              (b) accountants' report;
              (c) previously published pro forma financial information reported on in accordance with rule 4.29(7); or
              (d) published profit forecast or estimate.
              (6) Any adjustments which are made to the information referred to in rule 4.29(5) in relation to any pro forma statement must be:
              (a) clearly shown and explained;
              (b) directly attributable to the transaction concerned and not relating to future events or decisions;
              (c) factually supportable; and
              (d) in respect of a pro forma profit or cash flow statement, clearly identified as to those adjustments which are expected to have a continuing effect on the issuer and those which are not.
              (7) The pro forma financial information must be reported on in the document by the auditors or reporting accountants who must report that, in their opinion:
              (a) the pro forma financial information has been properly compiled on the basis stated;
              (b) such basis is consistent with the accounting policies of the issuer; and
              (c) the adjustments are appropriate for the purposes of the pro forma financial information as disclosed pursuant to rule 4.29(1).
              (8) Where pro forma earnings per share information is given for a transaction which includes the issue of securities, the calculation is to be based on the weighted average number of shares outstanding during the period, adjusted as if that issue had taken place at the beginning of the period.

        • Chapter 5 Valuation of and Information on Properties

          • Definitions

            • 5.01

              In this Chapter:—

              (1) "carrying amount" means, for an applicant, the amount at which an asset is recognised in the most recent audited consolidated balance sheet of the group as disclosed in the listing document after deducting any accumulated depreciation (amortisation) and accumulated impairment losses. For an issuer, the amount at which an asset is recognised in its latest published audited consolidated accounts or latest published interim report (whichever is more recent) after deducting any accumulated depreciation (amortisation) and accumulated impairment losses;

              Note: If an acquisition is made after the latest consolidated audited accounts, the acquisition cost should be used.
              (2) "property activities" mean holding (directly or indirectly) and/or development of properties for letting or retention as investments, or the purchase or development of properties for subsequent sale, or for subsequent letting or retention as investments. It does not include holding of properties for own use;

              Notes:
              1 Any other property interest is classified as "non-property activities".
              2 The listing document date must be used as the timing reference point to categorise a property interest into property activity or non-property activity.
              (3) "property" means land and/or buildings (completed or construction in progress). Building includes fittings and fixtures. "Property interest" means an interest in the property;

              Note: Fittings and fixtures include building services installation such as plumbing and pipes, electrical instalments, ventilation systems, escalators and improvements generally. Equipment and machinery used for production should be excluded.

              A property interest may comprise:
              (1) one or more units in the same building or complex;
              (2) one or more properties located at the same address or lot number;
              (3) one or more properties comprising an integrated facility;
              (4) one or more properties, structures or facilities comprising a property development project (even if there are different phases);
              (5) one or more properties held for investment within one complex;
              (6) one or more properties, structures or facilities located contiguously to each other or located on adjoining lots and used for the same or similar operational/business purposes; or
              (7) a project or phases of development presented to the public as one whole project or forming a single operating entity.
              (4) "total assets" means, for an applicant, the total fixed assets, including intangible assets, plus the total current and non-current assets, as shown in the latest audited consolidated financial statements in the accountants' report in the listing document. For an issuer, total assets has the same meaning as in Chapter 14.

          • Requirements for an applicant

            • 5.01A

              A listing document issued by an applicant must include valuations of and information on property interests:

              (1) that form part of its (or, for debt securities, the guarantor's) property activities except for those with a carrying amount below 1% of its total assets. The total carrying amount of property interests not valued must not exceed 10% of its total assets; and
              (2) that do not form part of its (or, for debt securities, the guarantor's) property activities if the carrying amount of a property interest is or is above 15% of its total assets.

            • 5.01B

              The listing document must include:

              (1) for property interests of an applicant's property activities:
              (a) the full text of valuation reports of property interests that are required to be valued except where summary disclosure is allowed; and
              (b) a summary disclosure if the market value of a property interest as determined by the valuer is less than 5% of its total property interests that are required to be valued under rule 5.01A(1). See Appendix 26 for the summary form of disclosure. The Exchange may accept variation of the summary form of disclosure based on the applicant's circumstances. The valuation report setting out the information required by these Rules must be available for public inspection;

              Note: The summary form of disclosure may be varied based on the applicant's circumstances. An applicant must include additional information necessary for investors to make an informed decision.
              (2) for property interests of an applicant's non-property activities:
              (a) the full text of valuation reports if the carrying amount of a property interest is or is above 15% of its total assets; and
              (b) a statement that, except for the property interests in the valuation reports, no single property interest that forms part of its non-property activities has a carrying amount of 15% or more of total assets;
              (3) an overview of property interests not covered by a valuation report, including their number and approximate size range, uses, how they are held and the general description of the area where they are located. The overview may include property interests voluntarily valued and disclosed separately in the listing document; and
              (4) the general information in rule 5.10, if it applies.

            • 5.01C

              Rules 5.01A and 5.01B (except rules 5.01B(3) and 5.01B(4)) do not apply to property interests ancillary to the exploration for and/or extraction of Natural Resources (as defined in Chapter 18) if the listing document includes a valuation that encompasses these Natural Resources and ancillary property interests, and together have been valued as a business or as an operating entity by a Competent Evaluator (as defined in Chapter 18).

              Note: Rules 5.01A(2) and 5.01B(2) to (4) apply to property interests ancillary to the exploration for and/or extraction of Natural Resources if the listing document does not include a valuation of all the ancillary property interests conducted by a Competent Evaluator.

          • Requirements for an issuer

            • 5.02

              For an acquisition or disposal of any property interest, or of a company whose assets consist solely or mainly of property, where any of the percentage ratios (as defined in rule 14.04(9)) of the transaction is or is above 25%, then a valuation of and information on the property must be included in the circular issued to shareholders in connection with the acquisition or disposal (see rule 14.66(11)) unless rule 5.02A applies. In this rule and in rule 5.03, a circular issued "in connection with an acquisition" includes a listing document issued for a rights issue, the proceeds of which are to be used to retire a debt with which the property or company had previously been acquired. The listing document need not contain a valuation report if a circular containing a valuation report was issued to shareholders when the property or company was acquired.

            • 5.02A

              Valuation of a property interest is not required if:

              (1) it is acquired from the Hong Kong Government at a public auction or by sealed tender; or
              (2) the property is acquired under a Qualified Property Acquisition (as defined in rule 14.04(10C)) falling under rules 14.33A to 14.33B; or
              (3) the company being acquired or disposed of is listed on the Exchange, except if it is a connected transaction; or
              (4) subject to rule 5.03, the property interests in the company being acquired or disposed of is ancillary to the exploration for and/or extraction of Natural Resources (as defined in Chapter 18) and the circular includes a valuation that encompasses these Natural Resources and ancillary property interests, and together have been valued as a business or as an operating entity by a Competent Evaluator (as defined in Chapter 18); or

              Note: Rule 5.02 applies to property interests ancillary to the exploration for and/or extraction of Natural Resources if the circular does not include a valuation of all the ancillary property interests conducted by a Competent Evaluator.
              (5) subject to rule 5.03, the carrying amount of a property interest in the company being acquired or disposed of is below 1% of the issuer's total assets. The total carrying amount of property interests not valued must not exceed 10% of the issuer's total assets.

            • 5.02B

              Subject to rule 5.03, the circular issued under rule 5.02 must include:

              (1) for a property interest, the full text of valuation reports;
              (2) for an unlisted company whose assets consist solely or mainly of property:
              (a) the full text of valuation reports of property interests that are required to be valued under rule 5.02 except where summary disclosure is allowed; and
              (b) a summary disclosure if the value of a property interest as determined by the valuer is less than 5% of the total property interests that are required to be valued under rule 5.02. See Appendix 26 for the summary form of disclosure.

              The Exchange may accept variation of the summary form of disclosure based on the issuer's circumstances. The valuer's report setting out the information required by these Rules must be available for public inspection; and

              Note: The summary form of disclosure may be varied based on the issuer's circumstances. An issuer must include additional information necessary for investors to make an informed decision.
              (c) an overview of property interests not covered by a valuation report, including their number and approximate size range, uses, how they are held and the general description of the area where they are located. The overview may include property interests voluntarily valued and disclosed separately in the circular;
              (3) for a company listed on the Exchange whose assets consist solely or mainly of property, an overview of property interests, including their number and approximate size range, uses, how they are held and the general description of the area where they are located; and
              (4) the general information in rule 5.10, if it applies.

            • 5.03

              For a connected transaction involving an acquisition or a disposal of any property interest or of a company whose assets consist solely or mainly of property (including a company listed on the Exchange), a valuation of and information on the property must be included in any circular issued to shareholders in connection with the acquisition or disposal (see rule 14A.70(7)). The circular must include full text of valuation reports and the general information in rule 5.10, if it applies.

            • 5.04

              These requirements do not apply in the case of an issue of debt securities by a State, Supranational, State corporation or bank.

            • 5.04A [Repealed]

              [Repealed 1 January 2012]

          • Valuation report requirements

            • 5.05

              Basic contents

              All valuation reports must contain all material details of the basis of valuation which must follow The Hong Kong Institute of Surveyors ("HKIS") Valuation Standards on Properties published from time to time by the HKIS or the International Valuation Standards published from time to time by the International Valuation Standards Council.

            • 5.06

              All valuation reports should normally contain the following information:—

              (1) a description of each property including:—
              (a) an address sufficient to identify the property, which should generally include postal address, lot number and such further designation as is registered with the appropriate government authorities in the jurisdiction in which the property is located;
              (b) a brief description (e.g. whether land or building, approximate area, etc.);
              (c) the existing use (e.g. shops, offices, factories, residential, etc.);
              (d) the Ground/Government Rent;
              (e) a summary of the terms of tenants' leases or underleases (including repairing obligations, where material);
              (f) the approximate age of buildings;
              (g) the terms of tenure;
              (h) the terms of any intra-group lease granted by a parent company to a subsidiary on property occupied by the group (identifying the properties);
              (i) the capital value in existing state at the effective date as at which the property was valued;
              (j) the current planning or zoning use;
              (k) the options or rights of pre-emption concerning or affecting the property;
              (l) the basis of and approach to valuation for the property interest;
              (m) when the site was last inspected;
              (n) summary of investigation carried out, including details of inspection, such as building conditions, availability of building services, etc.;
              (o) nature and source of information relied on;
              (p) details of title and ownership;
              (q) details of encumbrances;
              (r) how the properties are grouped together for each valuation certificate;
              (s) names and qualifications of persons who carried out the site inspection; and
              (t) any other matters which may materially affect the value;
              (2) where the property is not in the process of being developed, details of rentals of the property including:—
              (a) the existing monthly rental before profits tax if the property is wholly or partly let together with the amount and a description of any outgoings or disbursements from the rent, and, if materially different, the estimated current monthly market rental obtainable, on the basis that the property was available to let on the effective date as at which the property was valued;
              (b) a summary of any rent review provisions, where material; and
              (c) the amount of vacant space, where material;
              (3) where the property is in the process of being developed the following additional details, where available:—
              (a) details of development potential and whether architectural plans have been approved or planning consent has been obtained and any conditions imposed in respect of such approval;
              (b) any material restrictions on development including building covenants and time limits for completion of the development;
              (c) existing stage of development;
              (d) estimated completion date;
              (e) estimated cost of carrying out the development or (where part of the development has already been carried out) the estimated cost of completing the development;
              (f) estimated capital value in existing state at the effective date as at which the property was valued;
              (g) estimated capital value after completion;
              (h) any material special or general conditions affecting the development of the property;
              (i) any conditions imposed as to construction of roadways, pathways, drainage, sewage and other facilities or services for public use, if material;
              (j) any sales arrangements and/or letting arrangements existing at the effective date as at which the property was valued; and
              (k) any construction costs incurred up to the effective date as at which the property was valued;
              (4) where property is held for future development purposes the following additional details, where available:—
              (a) details of development potential and whether architectural plans have been approved or planning consent has been obtained and any conditions imposed in respect of such approval;
              (b) any material special or general conditions affecting the development of the property including building covenants and time limits for completion of the development; and
              (c) any conditions imposed as to construction of roadways, pathways, drainage, sewage and other facilities or services for public use, if material;
              (5) a classification of the property according to the purpose for which it is held. The acceptable categories are:—
              (a) property held for development;
              (b) property held for investment;
              (c) property held for owner occupation; and
              (d) property held for sale;
              (6) details of any agreement or proposals as to any proposed transaction regarding the property between the issuer and any other member of the group;
              (7) the name of the valuer, his address and professional qualification;
              (8) the effective date as at which the property was valued and the date of the valuation; and
              (9) such other information as the Exchange may require.

              Note: See Practice Note 12

            • 5.07

              Effective Date

              The effective date as at which the property was valued must not be more than three months before the date on which the relative listing document or circular is issued and if such effective date is not the same as the end of the last period reported on by the reporting accountants (see Chapter 4), it will be necessary for the listing document or circular to include a statement reconciling the valuation figure with the figure included in the balance sheet as at the end of that period.

            • 5.08

              Independence of Valuer

              Unless dispensation is obtained from the Exchange, all valuations of properties must be prepared by an independent qualified valuer and for this purpose:—

              (1) a valuer is not independent if:—
              (a) he is an officer or servant or proposed director of the issuer or the issuer's subsidiary or holding company or of a subsidiary of the issuer's holding company or any associated company; or
              (b) in the case of a firm or company of valuers, it is the issuer's subsidiary or holding company or a subsidiary of the issuer's holding company or any of its partners, directors or officers is an officer or servant or proposed director of the issuer or the issuer's subsidiary or holding company or of a subsidiary of the issuer's holding company or any associated company; and
              (2) a valuer is a qualified valuer only if:—
              (a) for the purposes of valuation of properties situated in Hong Kong, the valuer is a fellow or associate member of The Royal Institution of Chartered Surveyors (Hong Kong Branch) or The Hong Kong Institute of Surveyors and carries on the business in Hong Kong of valuing properties and is authorised to do so by the rules of the relevant professional institution of which he is a member; or
              (b) for the purposes of valuation of properties situated outside Hong Kong, the valuer has the appropriate professional qualifications and experience of valuing properties in the same location and category to carry out the valuation.

            • 5.09

              Other Reports

              If the issuer has obtained more than one valuation report regarding any of the issuer's properties referred to in the listing document or circular within three months before the issue of the listing document or circular then all other such reports must be included.

          • General disclosure

            • 5.10

              A listing document, or a circular issued under rules 5.02 and 5.03, must disclose relevant information on material properties (including leased properties).

              Notes: Information may include the following:

              (1) a general description of where the property is located (rather than only its address) and some market analysis if the property relates to property activities. For example, whether the property is located in the central business district, supply and demand information, occupancy rates, trends in property yield, sales prices, rental rates etc.;
              (2) use and approximate area;
              (3) any restrictions on its use;
              (4) an indication of how the property is held. For example, owned or leased. If leased, the remaining term of the lease;
              (5) details of encumbrances, liens, pledges, mortgages against the property;
              (6) environmental issues, such as breach of environmental regulations;
              (7) details of investigations, notices, pending litigation, breaches of law or title defects;
              (8) plans for construction, renovation, improvement or development of the property and estimated associated costs;
              (9) plans to dispose of or change the use of the property; and
              (10) any other information considered material for investors.

        • Chapter 6 Trading Halt, Suspension, Cancellation and Withdrawal of Listing

          • 6.01

            Listing is always granted subject to the condition that where the Exchange considers it necessary for the protection of the investor or the maintenance of an orderly market, it may at any time direct a trading halt or suspend dealings in any securities or cancel the listing of any securities in such circumstances and subject to such conditions as it thinks fit, whether requested by the issuer or not. The Exchange may also do so where:—

            (1) an issuer fails, in a manner which the Exchange considers material, to comply with the Listing Rules; or
            (2) the Exchange considers there are insufficient securities in the hands of the public (see rule 8.08(1)); or
            (3) the Exchange considers that the issuer does not have a sufficient level of operations or sufficient assets to warrant the continued listing of the issuer's securities (see rule 13.24); or
            (4) the Exchange considers that the issuer or its business is no longer suitable for listing.

          • Trading halt or suspension

            • 6.02

              Any request for a trading halt or suspension must be made to the Exchange by the issuer or its authorised representative or financial adviser and must be supported by the specific reasons which the issuer wishes the Exchange to take into account in the Exchange's determination of its request.

              Note:

              (1) Recourse to a trading halt or suspension should only be made where necessary in the interests of all parties. In many cases, the issuer publishing an announcement is preferable to the fettering of the proper functioning of the market by an inappropriate or unwarranted trading halt or suspension. Unless the Exchange considers that the reasons given in support of a trading halt or suspension request warrant such action, it will expect a clarifying announcement to be published instead. Failure by an issuer to do so may result in disciplinary proceedings being brought against the issuer and its directors with the Exchange imposing sanctions available under rule 2A.09.

            • 6.03

              The issuer requesting a trading halt or suspension of trading in its securities has the obligation to satisfy the Exchange that a trading halt or suspension would be appropriate.

              Note:

              (1) The Exchange is under an obligation to maintain an orderly and fair market for the trading of all Exchange listed securities and listed securities should be continuously traded save in exceptional circumstances.

            • 6.04

              Where dealings have been halted or suspended, the procedure for lifting the trading halt or suspension will depend on the circumstances and the Exchange reserves the right to impose such conditions as it considers appropriate. The issuer will normally be required to announce the reason for the trading halt or suspension and, where appropriate, the anticipated timing of the lifting of the trading halt or suspension. In some cases (for example a trading halt pending an announcement) the trading halt will be lifted as soon as possible after the announcement is made. In other cases (for example those in rule 14.84) the suspension will be continued until any relevant requirements have been met. The continuation of a suspension for a prolonged period without the issuer taking adequate action to obtain restoration of listing may lead to the Exchange cancelling the listing.

              Note:

            • 6.05

              The duration of any trading halt or suspension should be for the shortest possible period. It is the issuer's responsibility to ensure that trading in its securities resumes as soon as practicable following the publication of an appropriate announcement or when the specific reasons given by the issuer supporting its request for a trading halt or suspension of trading in its securities, under rule 6.02, no longer apply.

              Note:

              (1) The Exchange is under an obligation to maintain an orderly and fair market for the trading of all Exchange listed securities and listed securities should be continuously traded save in exceptional circumstances.
              (2) The Exchange considers that the continuation of any trading halt or suspension beyond such period as is absolutely necessary denies reasonable access to the market and prevents its proper functioning.

            • 6.06

              Where trading has been halted or suspended the issuer shall notify the Exchange of:

              (1) any change in circumstances affecting the reasons provided to the Exchange supporting the trading halt or suspension under rule 6.02; and
              (2) any additional reasons which the issuer wishes the Exchange to take into account in the Exchange's determination whether or not the trading halt or suspension should be continued.

              Note:
              (1) It is the issuer's responsibility to provide the Exchange with all relevant information, which is within the issuer's knowledge, to enable the Exchange to make an informed decision whether or not the trading halt or suspension of trading in the issuer's securities continues to be appropriate.

            • 6.07

              The Exchange shall have the power to direct the resumption of trading of halted or suspended securities. In particular the Exchange may:

              (1) require an issuer to publish an announcement, in such terms and within such period as the Exchange shall in its discretion direct, notifying the resumption of trading in the issuer's halted or suspended securities, following the publication of which the Exchange may direct resumption of trading; and/or
              (2) direct a resumption of trading following the Exchange's publication of an announcement notifying the resumption of trading in the halted or suspended securities.

            • 6.08

              The Exchange's power under rule 6.07 shall not be exercised without first giving the issuer the opportunity of being heard in accordance with rule 2B.07(6). At any hearing concerning a direction under rule 6.07, the issuer opposing the resumption of trading in its securities has the burden of satisfying the Exchange that a continued trading halt or suspension would be appropriate.

              Note:

              (1) The Exchange is under an obligation to maintain an ordery and fair market for the trading of all Exchange listed securities and listed securities should be continuously traded save in exceptional circumstances.
              (2) The Exchange considers that the continuation of any trading halt or suspension beyond such period as is absolutely necessary denies reasonable access to the market and prevents its proper functioning.

            • 6.09

              The Exchange's power under rule 6.07 shall be exercised without prejudice to its ability to pursue such other remedies as may be available to it under the Listing Rules.

            • 6.10

              There may be cases where a listing is cancelled without a suspension intervening. Where the Exchange considers that an issuer or its business is no longer suitable for listing it will publish an announcement naming the issuer and specifying the period within which the issuer must have remedied those matters which have rendered it unsuitable for listing. Where appropriate the Exchange will suspend dealings in the issuer's securities. If the issuer fails to remedy those matters within the specified period, the Exchange will cancel the listing. Any proposals to remedy those matters will be treated as if they were an application for listing from a new applicant for all purposes and the issuer will be required (inter alia) to issue a listing document which contains all of the specific items of information set out in Part A of Appendix 1 and pay the initial listing fee.

          • Withdrawal

            • 6.11

              Subject to rule 6.15, an issuer whose primary listing is on the Exchange and which has an alternative listing on another regulated, regularly operating, open stock exchange recognised for this purposes by the Exchange, may not voluntarily withdraw its listing on the Exchange unless:—

              (1) the prior approval of shareholders has been obtained by way of an ordinary resolution passed at a duly convened meeting of the shareholders of the issuer;
              (2) the prior approval of holders of any other class of listed securities, if applicable, has been obtained; and
              (3) the issuer has given its shareholders and holders of any other class of listed securities, if applicable, at least three months notice of the proposed withdrawal of the listing. This minimum notice period must run from the date on which the shareholders approve the voluntary withdrawal of listing and such notice must include details of how to transfer securities to and trade those securities on the alternative market.

              In deciding whether an alternative listing is acceptable the Exchange must be satisfied that the alternative market is open and readily accessible by Hong Kong investors. A market to which access by Hong Kong investors is restricted (for example, by foreign exchange controls) will not be acceptable.

            • 6.12

              Subject to rule 6.15, if the issuer has no such alternative listing, the issuer may not voluntarily withdraw its listing on the Exchange without the permission of the Exchange unless:—

              (1) the issuer has obtained the prior approval of its shareholders and holders of any other class of listed securities, if applicable, at a duly convened meeting of shareholders and a separate meeting of holders of any other class of listed securities, if applicable, at which any controlling shareholders and their respective associates shall abstain from voting in favour. Where there are no controlling shareholders, directors (excluding independent non-executive directors) and the chief executive of the issuer and their respective associates shall abstain from voting in favour. The issuer must disclose the information required under rule 2.17 in the circular to shareholders;
              (2) the approval of withdrawal of the listing referred to in rule 6.12(1) must be given by at least 75% of the votes attaching to any class of listed securities held by holders voting either in person or by proxy at the meeting. For the purpose of determining the percentage, the listed securities held by directors, the chief executive and any controlling shareholders or their respective associates that vote against the resolution at the meeting are to be included;
              (3) the number of votes cast against the resolution is not more than 10% of the votes attaching to any class of listed securities held by holders permitted under rule 6.12(1) to vote in person or by proxy at the meeting. For the purpose of determining the percentage, the listed securities held by directors, the chief executive and any controlling shareholders or their respective associates that vote against the resolution at the meeting are to be included; and
              (4) the shareholders and holders of any other class of listed securities, if applicable, other than the directors (excluding independent non-executive directors), chief executive and controlling shareholders, are offered a reasonable cash alternative or other reasonable alternative.

            • 6.13

              In relation to any withdrawal of listing under rule 6.12, the Exchange reserves the right to require the following parties to abstain from voting in favour of the relevant resolution at the meeting:

              (1) any parties who were controlling shareholders of the issuer at the time the decision for the transaction or arrangement involving the withdrawal of listing was made or approved by the board, and their associates; and
              (2) where there were no such controlling shareholders, directors (excluding independent non-executive directors) and the chief executive of the issuer at the time the decision for the transaction or arrangement involving the withdrawal of listing was made or approved by the board, and their respective associates.

              The issuer must disclose the information required under rule 2.17 in the circular to shareholders.

            • 6.14

              In relation to any withdrawal of listing under rule 6.12, the issuer must comply with the requirements under rules 13.39(6) and (7), 13.40, 13.41 and 13.42.

            • 6.15

              An issuer may voluntarily withdraw its listing on the Exchange, irrespective of whether it has an alternative listing or not, if:—

              (1) after a general offer a right to compulsory acquisition is exercised pursuant to applicable laws and regulations (the requirements of which are, where the issuer is not a company incorporated in Hong Kong, at least as onerous as those applicable if it were) resulting in the acquisition of all the listed securities of the issuer; or
              (2) the issuer is privatised by way of a scheme of arrangement or capital reorganisation which is governed by the Takeovers Code and all the relevant requirements, including the shareholders' approval requirements, under the Takeovers Code have been complied with,

              and, in either case, it has given its shareholders notice of the proposed withdrawal of the listing by way of an announcement published in accordance with rule 2.07C and the intention not to retain the issuer's listing on the Exchange has been stated in a circular to shareholders.

            • 6.16

              An issuer whose primary listing is on another stock exchange and which has a secondary listing on the Exchange may not voluntarily withdraw its secondary listing on the Exchange unless:

              (1) it has complied with all relevant laws, regulations and listing rules of the jurisdiction in which it has its primary listing, as well as all relevant laws and regulations of its jurisdiction of incorporation, in relation to its proposed delisting from the Exchange; and
              (2) it has given its shareholders at least three months' prior notice of the proposed withdrawal of the listing by way of an announcement published in accordance with rule 2.07C.

      • EQUITY SECURITIES

        • Chapter 7 Methods of Listing

          • 7.01

            Equity securities may be brought to listing by any one of the methods described below.

          • Offer for Subscription

            • 7.02

              An offer for subscription is an offer to the public by or on behalf of an issuer of its own securities for subscription.

            • 7.03

              The subscription of the securities must be fully underwritten.

            • 7.04

              In the case of offers by tender, the Exchange must be satisfied as to the fairness of the basis of allotment so that every investor who applies at the same price for the same number of securities receives equal treatment.

            • 7.05

              An offer for subscription must be supported by a listing document which must comply with the relevant requirements of Chapter 11.

          • Offer for Sale

            • 7.06

              An offer for sale is an offer to the public by or on behalf of the holders or allottees of securities already in issue or agreed to be subscribed.

            • 7.07

              In the case of offers by tender, the Exchange must be satisfied as to the fairness of the basis of allotment so that every investor who applies at the same price for the same number of securities receives equal treatment.

            • 7.08

              An offer for sale must be supported by a listing document which must comply with the relevant requirements of Chapter 11.

          • Placing

            • 7.09

              A placing is the obtaining of subscriptions for or the sale of securities by an issuer or intermediary primarily from or to persons selected or approved by the issuer or intermediary.

            • 7.10

              The criteria which will apply are set out in Appendix 6. The Exchange may not permit a new applicant to be listed by way of a placing if there is likely to be significant public demand for the securities.

            • 7.11

              The Exchange may be prepared to allow preliminary arrangements and placings to be made to dispose of securities before the start of dealings where necessary to comply with the requirement in rule 8.08(1) that a minimum prescribed percentage of any class of listed securities must at all times be held by the public.

            • 7.12

              A placing by or on behalf of a new applicant or by or on behalf of a listed issuer of securities of a class new to listing must be supported by a listing document which must comply with the relevant requirements of Chapter 11. A placing by or on behalf of a listed issuer of securities of a class already listed does not have to be supported by a listing document, but if a prospectus or other listing document is otherwise required or issued, it must comply with the relevant requirements of Chapter 11.

          • Introduction

            • 7.13

              An introduction is an application for listing of securities already in issue where no marketing arrangements are required because the securities for which listing is sought are already of such an amount and so widely held that their adequate marketability when listed can be assumed.

            • 7.14

              Introductions will normally be appropriate in the following circumstances:—

              (1) where the securities for which listing is sought are already listed on another stock exchange;
              (2) where the securities of an issuer are distributed in specie by a listed issuer to the shareholders of that listed issuer or to the shareholders of another listed issuer; or
              (3) where a holding company is formed and its securities are issued in exchange for those of one or more listed issuers. Any reorganisation by way of scheme of arrangement or by any other means whereby securities are issued by an overseas issuer in exchange for the securities of one or more listed Hong Kong issuers and the listing of the latter issuer or issuers is withdrawn at the same time as the securities of the overseas issuer are listed must first be approved by a special resolution of the shareholders of the listed Hong Kong issuer or issuers.

            • 7.15

              An introduction will only be permitted in exceptional circumstances if there has been a marketing of the securities in Hong Kong within the six months prior to the proposed introduction where such marketing was made conditional on listing being granted for those securities. Furthermore, there may be other factors, such as a pre-existing intention to dispose of securities, a likelihood of significant public demand for the securities or an intended change of the issuer's circumstances, which would render an introduction unacceptable to the Exchange. An introduction will not be permitted if a change in the nature of the business is in contemplation.

            • 7.16

              An issuer should apply to the Exchange as early as possible to obtain confirmation that an introduction will be an appropriate method of listing. The application must state the names and holdings of the ten largest beneficial holders of the securities (if known) and the total number of holders. A copy of the share register may be required by the Exchange. In addition, particulars of the holdings of the directors and their close associates must be included. If such approval to the method of listing is given, it does not necessarily mean that listing for the securities will ultimately be granted.

            • 7.17

              An introduction must be supported by a listing document which must comply with the relevant requirements of Chapter 11.

          • Rights Issue

            • 7.18

              A rights issue is an offer by way of rights to existing holders of securities which enables those holders to subscribe securities in proportion to their existing holdings.

            • 7.19

              (1) In normal circumstances, all rights issues must be fully underwritten.

              Note:
              (1) Underwriting provides a degree of certainty to an issuer through the commitment of sound financial institutions. It also enables an issuer to plan on the basis of assured funds. Where an independent professional underwriter is used it also means that the issue is managed and reviewed by an independent professional party. However, there may be circumstances in which it is appropriate for an issuer to proceed without underwriting. This may occur where (by way of example and without limitation):—
              (a) underwriting can only be obtained subject to a force majeure clause (or other similar terms and conditions) which is unacceptable to the directors; or
              (b) the issuer has specific intended uses for the proceeds and can show that the additional costs of underwriting the issue are not justified in the particular circumstances; or
              (c) an underwriting commitments has been terminated by the underwriter upon the occurrence of an event of force majeure (other than an event which also constitutes a breach of warrant by the issuer), after the offer has opened. In such circumstances, the issuer must have ensured that the conditions of the issue are structured in a manner which permits the issue to proceed on a non-underwritten basis, with the consent of the Exchange.
              In appropriate circumstances, the Exchange will be prepared to permit an issue which is not fully underwritten to proceed, subject to the additional disclosure requirements set out in rule 7.19(3) below. In all such cases the issuer should contact the Exchange to seek informal and confidential guidance as to the requirements which will apply to an issue at the earliest opportunity.
              (2) In order to facilitate fund raising by very substantial companies the Exchange will normally allow such companies to proceed with a rights issue on a non-underwritten basis, subject to prior notification of the Exchange. Even with very substantial companies the Exchange may still insist that a rights issue is fully underwritten in exceptional circumstances (e.g. if the issue is to raise funds for "general corporate purposes"). Companies will be considered as very substantial if they have:—
              (a) a public shareholding with a market capitalisation at the time of the proposed issue of more than HK$500 million; and
              (b) made profits in each of the last two financial years.
              (2) If a rights issue is underwritten and the underwriter is entitled to terminate that underwriting upon the occurrence of any event of force majeure after dealings in the rights in nil-paid form have commenced, then the rights issue listing document must contain full disclosure of that fact. Such disclosure must:—
              (a) appear on the front cover of the listing document and in a prominent position at the front of the document;
              (b) include a summary of the force majeure clause(s) and explain when its provisions cease to be exercisable;
              (c) state that there are consequential risks in dealing in such rights; and
              (d) be in a form approved by the Exchange.
              (3) If a rights issue is not fully underwritten the listing document must contain full disclosure of that fact and a statement of the minimum amount, if any, which must be raised in order for the issue to proceed. Such disclosure must:—
              (a) appear on the front cover of the listing document and in a prominent position at the front of the document; and
              (b) be in a form approved by the Exchange.
              In addition, the listing document must contain a statement of the intended application of the net proceeds of the issue according to the level of subscriptions and a statement in respect of each substantial shareholder as to whether or not that substantial shareholder has undertaken to take up his or its entitlement in full or in part and if so on what conditions, if any.
              (4) If a rights issue is not fully underwritten by a person or persons whose ordinary course of business includes underwriting, the listing document must contain full disclosure of that fact.
              (5) If a rights issue is not fully underwritten:—
              (a) the issuer must comply with any applicable statutory requirements regarding minimum subscription levels; and
              (b) a shareholder who applies to take up his or its full entitlement may unwittingly incur an obligation to make a general offer under the Takeovers Code, unless a waiver from the Executive (as defined in the Takeovers Code) has been obtained.
              Note: In the circumstances set out in rule 7.19(5)(b), an issuer may provide for shareholders to apply on the basis that, if the issue is not fully taken up, their application can be "scaled" down to a level which does not trigger an obligation to make a general offer.
              (6) If the proposed rights issue would increase either the number of issued shares or the market capitalisation of the issuer by more than 50% (on its own or when aggregated with any other rights issues or open offers announced by the issuer (i) within the 12 month period immediately preceding the announcement of the proposed rights issue or (ii) prior to such 12 month period where dealing in respect of the shares issued pursuant thereto commenced within such 12 month period, together with any bonus securities, warrants or other convertible securities (assuming full conversion) granted or to be granted to shareholders as part of such rights issues or open offers):—
              (a) the rights issue must be made conditional on approval by shareholders in general meeting by a resolution on which any controlling shareholders and their associates or, where there are no controlling shareholders, directors (excluding independent non-executive directors) and the chief executive of the issuer and their respective associates shall abstain from voting in favour. The issuer must disclose the information required under rule 2.17 in the circular to shareholders;
              (b) the issuer shall set out in the circular to shareholders the purpose of the proposed rights issue, together with the total funds expected to be raised and a detailed breakdown and description of the proposed use of the proceeds. The issuer shall also include the total funds raised and a detailed breakdown and description of the funds raised on any issue of equity securities in the 12 months immediately preceding the announcement of the proposed rights issue, the use of such proceeds, the intended use of any amount not yet utilised and how the issuer has dealt with such amount; and
              (c) the Exchange reserves the right to require the rights issue to be fully underwritten.
              (7) Subject to rule 10.08, in the period of 12 months from the date on which dealings in the securities of a new applicant commence on the Exchange, the issuer shall not effect any rights issue, unless it is made conditional on the approval of shareholders in general meeting by a resolution on which any controlling shareholder and its associates or, where there are no controlling shareholders, directors (excluding independent non-executive directors) and the chief executive of the issuer and their respective associates shall abstain from voting in favour. The issuer must disclose the information required under rule 2.17 in the circular to shareholders.
              (8) Where shareholders' approval is required under rules 7.19(6) or 7.19(7), the Exchange reserves the right to require the following parties to abstain from voting in favour of the relevant resolution at the general meeting:
              (a) any parties who were controlling shareholders of the issuer at the time the decision for the transaction or arrangement involving the rights issue was made or approved by the board and their associates; or
              (b) where there were no such controlling shareholders, directors (excluding independent non-executive directors) and the chief executive of the issuer at the time the decision for the transaction or arrangement involving the rights issue was made or approved by the board, and their respective associates.
              The issuer must disclose the information required under rule 2.17 in the circular to shareholders.
              (9) Where shareholders' approval is required under rules 7.19(6) or 7.19(7), the issuer must comply with the requirements under rules 13.39(6) and (7), 13.40, 13.41 and 13.42.

            • 7.20

              Offers of securities by way of rights are normally required to be conveyed by renounceable provisional letters of allotment or other negotiable instrument, which must state the time, being not less than 10 business days, in which the offer may be accepted. In cases where the issuer has a large number of overseas members a longer offer period may be desirable, provided that the Exchange must be consulted if the issuer proposes an offer period of over 15 business days.

            • 7.21

              (1) In every rights issue the issuer may make arrangements to:—
              (a) dispose of securities not subscribed by allottees under provisional letters of allotment or their renouncees by means of excess application forms, in which case such securities must be available for subscription by all shareholders and allocated on a fair basis; or
              (b) dispose of securities not subscribed by allottees under provisional letters of allotment in the market, if possible, for the benefit of the persons to whom they were offered by way of rights.
              The offer of such securities and the basis of allocation of the securities available for excess applications must be fully disclosed in the rights issue announcement, listing document and any circular.
              (2) If no arrangements or arrangements other than those described in rule 7.21(1) are made for the disposal of securities not subscribed by the allottees under provisional letters of allotment or their renouncees and the rights issue is wholly or partly underwritten or sub-underwritten by a director, chief executive or substantial shareholder of the issuer (or an associate of any of them), then the absence of such arrangements or the making of such other arrangements must be specifically approved by shareholders. Those persons who have a material interest in such other arrangements must abstain from voting on the matter at the meeting and the circular to shareholders must contain full details of the terms and conditions of that underwriting and/or sub-underwriting. The issuer must disclose the information required under rule 2.17 in the circular to shareholders.

            • 7.22

              A rights issue must be supported by a listing document which must comply with the relevant requirements of Chapter 11.

          • Open Offer

            • 7.23

              An open offer is an offer to existing holders of securities to subscribe securities, whether or not in proportion to their existing holdings, which are not allotted to them on renounceable documents. An open offer may be combined with a placing to become an open offer with a claw back mechanism, in which a placement is made subject to the rights of existing holders of securities to subscribe part or all of the placed securities in proportion to their existing holdings.

            • 7.24

              (1) In normal circumstances, all open offers must be fully underwritten.

              Note: See Notes (1) and (2) to rule 7.19(1) which shall apply in their entirety to open offers with the following amendments:
              (a) the term "rights issue" shall be replaced by the term "open offer"; and
              (b) the reference to rule " 7.19(3)" shall be replaced by " 7.24(2)"
              (2) If an open offer is not fully underwritten the listing document must contain full disclosure of that fact and a statement of the minimum amount, if any, which must be raised in order for the issue to proceed. Such disclosure must:—
              (a) appear on the front cover of the listing document and in a prominent position at the front of the document; and
              (b) be in a form approved by the Exchange.
              In addition, the listing document must contain a statement of the intended application of the net proceeds of the issue according to the level of subscriptions and a statement in respect of each substantial shareholder as to whether or not that substantial shareholder has undertaken to take up his or its entitlement in full or in part and if so on what conditions, if any.
              (3) If an open offer is not fully underwritten by a person or persons whose ordinary course of business includes underwriting, the listing document must contain full disclosure of that fact.
              (4) If an open offer is not fully underwritten:—
              (a) the issuer must comply with any applicable statutory requirements regarding minimum subscription levels; and
              (b) a shareholder who applies to take up his or its full entitlement may unwittingly incur an obligation to make a general offer under the Takeover Code, unless a waiver from the Executive (as defined in the Takeover Code) has been obtained.
              Note: In the circumstances set out in sub-paragraph 7.24(4)(b), an issuer may provide for shareholders to apply on the basis that, if the issue is not fully taken up, their application can be "scaled" down to a level which does not trigger an obligation to make a general offer.
              (5) If the proposed open offer would increase either the number of issued shares or the market capitalisation of the issuer by more than 50% (on its own or when aggregated with any other open offers or rights issues announced by the issuer (i) within the 12 month period immediately preceding the announcement of the proposed open offer or (ii) prior to such 12 month period where dealing in respect of the shares issued pursuant thereto commenced within such 12 month period, together with any bonus securities, warrants or other convertible securities (assuming full conversion) granted or to be granted to shareholders as part of such rights issues or open offers):—
              (a) the open offer must be made conditional on approval by shareholders in general meeting by a resolution on which any controlling shareholders and their associates or, where there are no controlling shareholders, directors (excluding independent non-executive directors) and the chief executive of the issuer and their respective associates shall abstain from voting in favour. The issuer must disclose the information required under rule 2.17 in the circular to shareholders;
              (b) the issuer shall set out in the circular to shareholders the purpose of the proposed open offer, together with the total funds expected to be raised and a detailed breakdown and description of the proposed use of the proceeds. The issuer shall also include the total funds raised and a detailed breakdown and description of the funds raised on any issue of equity securities in the 12 months immediately preceding the announcement of the proposed open offer, the use of such proceeds, the intended use of any amount not yet utilised and how the issuer has dealt with such amount; and
              (c) the Exchange reserves the rights to require the open offer to be fully underwritten.
              (6) Subject to rule 10.08, in the period of 12 months from the date on which dealings in the securities of a new applicant commence on the Exchange, the issuer shall not effect any open offer, unless it is made conditional on the approval of shareholders in general meeting by a resolution on which any controlling shareholder and its associates or, where there are no controlling shareholders, directors (excluding independent non-executive directors) and the chief executive of the issuer and their respective associates shall abstain from voting in favour. The issuer must disclose the information required under rule 2.17 in the circular to shareholders.
              (7) Where shareholders' approval is required under rules 7.24(5) or 7.24(6), the Exchange reserves the right to require the following parties to abstain from voting in favour of the relevant resolution at the general meeting:
              (a) any parties who were controlling shareholders of the issuer at the time the decision for the transaction or arrangement involving the open offer was made or approved by the board, and their associates; or
              (b) where there were no such controlling shareholders, directors (excluding independent non-executive directors) and the chief executive of the issuer at the time the decision for the transaction or arrangement involving the open offer was made or approved by the board, and their respective associates.
              The issuer must disclose the information required under rule 2.17 in the circular to shareholders.
              (8) Where shareholders' approval is required under rules 7.24(5) or 7.24(6), the issuer must comply with the requirements under rules 13.39(6) and (7), 13.40, 13.41 and 13.42.

            • 7.25

              Offers of securities by way of an open offer must remain open for acceptance for a minimum period of 10 business days. In cases where the issuer has a large number of overseas members a longer offer period may be desirable, provided that the Exchange must be consulted if the issuer proposes an offer period over 15 business days.

            • 7.26

              If the securities are not offered to existing holders in proportion to their existing holdings then, unless the securities will be issued by the directors under the authority of a general mandate granted to them by shareholders in accordance with rule 13.36(2), an open offer requires the prior approval of the shareholders in general meeting.

            • 7.26A

              (1) In every open offer the issuer may make arrangements to dispose of securities not validly applied for by shareholders in excess of their assured allotments, in which case such securities must be available for subscription by all shareholders and allocated on a fair basis. The offer of such securities and the basis of allocation of the securities available for excess applications must be fully disclosed in the open offer announcement, listing document and any circular.
              (2) If no arrangements or arrangements other than those described in rule 7.26A(1) are made for the disposal of securities not validly applied for and the open offer is wholly or partly underwritten or sub-underwritten by a director, chief executive or substantial shareholder of the issuer (or an associate of any of them), then the absence of such arrangements or the making of such other arrangements must be specifically approved by shareholders. Those persons who have a material interest in such other arrangements must abstain from voting on the matter at the meeting and the circular to shareholders must contain full details of the terms and conditions of that underwriting and/or sub-underwriting. The issuer must disclose the information required under rule 2.17 in the circular to shareholders.

            • 7.27

              An open offer must be supported by a listing document which must comply with the relevant requirements of Chapter 11.

          • Capitalisation Issue

            • 7.28

              A capitalisation issue is an allotment of further securities to existing shareholders, credited as fully paid up out of the issuer's reserves or profits, in proportion to their existing holdings, or otherwise not involving any monetary payments. A capitalisation issue includes a scrip dividend scheme under which profits are capitalised.

            • 7.29

              A capitalisation issue must be supported by a listing document in the form of a circular to shareholders which must comply with the relevant requirements of Chapter 11.

          • Consideration Issue

            • 7.30

              A consideration issue is an issue of securities as consideration in a transaction or in connection with a takeover or merger or the division of an issuer.

            • 7.31

              A consideration issue must be set out in an announcement published in accordance with rule 2.07C (see rules 14.34 and 14.35).

          • Exchange, etc.

            • 7.32

              Securities may be brought to listing by an exchange or a substitution of securities for or a conversion of securities into other classes of securities.

            • 7.33

              An exchange or a substitution of securities must be supported by a listing document in the form of a circular to shareholders which must comply with the relevant requirements of Chapter 11.

          • Other Methods

            • 7.34

              Securities may also be brought to listing by:—

              (1) the exercise of options, warrants or similar rights to subscribe or purchase securities (see Chapter 15);
              (2) an issue of securities on exercise of options granted to or for the benefit or executives and/or employees (see Chapter 17); or
              (3) such other methods as the Exchange may from time to time approve.

          • Transfer of Listing from GEM

            • 7.35

              An issuer already listed on GEM may transfer the listing to the Main Board pursuant to rules and regulations from time to time prescribed by the Exchange for this purpose. The relevant conditions, requirements and procedures are set out in Chapter 9A.

        • Chapter 8 Qualifications for Listing

          • Preliminary

            • 8.01

              This Chapter sets out the basic conditions which have to be met as a pre-requisite to the listing of equity securities. They apply to every method of listing and to both new applicants and listed issuers (including listed issuers that are treated as new applicants under other applicable provisions of the Exchange Listing Rules) except where otherwise stated.

              Further conditions which have to be met by infrastructure companies, mineral companies, overseas issuers, PRC issuers and depositary receipt issuers are set out in rule 8.05B(2) and Chapters 18, 19, 19A and 19B. For a transfer of listing from GEM, the requirements of this Chapter are applied with modifications as set out in the rules and regulations under Chapter 9A for that purpose. Issuers are reminded:—

              (1) that these requirements are not exhaustive and that the Exchange may impose additional requirements in a particular case; and
              (2) that the Exchange retains an absolute discretion to accept or reject applications for listing (including application for transfer of listing from GEM to the Main Board) and that compliance with the relevant conditions may not of itself ensure an applicant's suitability for listing.

              Prospective issuers, and in particular new applicants, are therefore encouraged to contact the Exchange to seek informal and confidential guidance as to the eligibility of a proposed issue for listing at the earliest possible opportunity.

          • Basic Conditions

            • 8.02

              The issuer must be duly incorporated or otherwise established under the laws of the place where it is incorporated or otherwise established and must be in conformity with those laws and its memorandum and articles of association or equivalent documents.

            • 8.03

              An issuer which is a Hong Kong company must not be a private company within the meaning of section 11 of the Companies Ordinance.

            • 8.04

              Both the issuer and its business must, in the opinion of the Exchange, be suitable for listing.

            • 8.05

              The issuer must satisfy either the profit test in rule 8.05(1) or the market capitalisation/ revenue/cash flow test in rule 8.05(2) or the market capitalisation/revenue test in rule 8.05(3).

              The profit test

              (1) To meet the profit test, a new applicant must have an adequate trading record under substantially the same management and ownership. This means that the issuer, or its group (excluding any associated companies and other entities whose results are recorded in the issuer's financial statements using the equity method of accounting), as the case may be, must satisfy each of the following:
              (a) a trading record of not less than three financial years (see rule 4.04) during which the profit attributable to shareholders must, in respect of the most recent year, be not less than HK$20,000,000 and, in respect of the two preceding years, be in aggregate not less than HK$30,000,000. The profit mentioned above should exclude any income or loss of the issuer, or its group, generated by activities outside the ordinary and usual course of its business;
              (b) management continuity for at least the three preceding financial years; and
              (c) ownership continuity and control for at least the most recent audited financial year.

              The market capitalisation/revenue/cash flow test

              (2) To meet the market capitalisation/revenue/cash flow test, a new applicant must satisfy each of the following:
              (a) a trading record of not less than three financial years;
              (b) management continuity for at least the three preceding financial years;
              (c) ownership continuity and control for at least the most recent audited financial year;
              (d) a market capitalisation of at least HK$2,000,000,000 at the time of listing;
              (e) revenue of at least HK$500,000,000 for the most recent audited financial year; and
              (f) positive cash flow from operating activities carried out by the new applicant, or its group, that are to be listed of at least HK$100,000,000 in aggregate for the three preceding financial years.

              The market capitalisation/revenue test

              (3) To meet the market capitalisation/revenue test, a new applicant must satisfy each of the following, unless waived by the Exchange under rule 8.05A:
              (a) a trading record of at least three financial years;
              (b) management continuity for at least the three preceding financial years;
              (c) ownership continuity and control for at least the most recent audited financial year;
              (d) a market capitalisation of at least HK$4,000,000,000 at the time of listing; and
              (e) revenue of at least HK$500,000,000 for the most recent audited financial year.
              (4) For the purpose of rules 8.05(2) and (3), only revenue arising from the principal activities of the new applicant and not items of revenue and gains that arise incidentally will be recognised. Revenue arising from "book" transactions, such as banner barter transactions or writing back of accounting provisions or other similar activities resulting from mere book entries, will be disregarded.

            • 8.05A

              In the case of the market capitalisation/revenue test, the Exchange will accept a shorter trading record period under substantially the same management as required under rule 8.05(3) (a) and (b) if the new applicant is able to demonstrate to the satisfaction of the Exchange the following:

              (1) the directors and management of the new applicant have sufficient and satisfactory experience of at least three years in the line of business and industry of the new applicant. Details of such experience must be disclosed in the listing document of the new applicant; and
              (2) management continuity for the most recent audited financial year.

              Note: Mineral Companies relying on this provision must comply with the more onerous requirements of Listing Rule 18.04.

            • 8.05B

              The Exchange may accept a shorter trading record period and/or may vary or waive the above profit or other financial standards requirement in rule 8.05 in the following cases:—

              (1) mineral companies to which the provisions of Chapter 18 apply; or
              (2) newly formed 'project' companies, for example a company formed to construct a major infrastructure project. The Exchange considers that "infrastructure projects" are projects which create the basic physical structures or foundations for the delivery of essential public goods and services that are necessary for the economic development of a territory or country. Examples of infrastructure projects include the construction of roads, bridges, tunnels, railways, mass transit systems, water and sewage systems, power plants, telecommunication systems, seaports and airports. A new applicant of such 'project' companies must be able to demonstrate that:
              (a) it is a party to and has the right to build and operate (or participate in the results from the operation of) a particular infrastructure project(s). The project(s) may be carried out by the applicant company directly or through subsidiaries or joint venture companies. Companies which finance, but do not undertake the development of the project(s), will not be considered under rule 8.05B(2);
              (b) at the time of listing, it is not engaged in any businesses other than those stipulated in the infrastructure project mandate(s) or contract(s);
              (c) the infrastructure project(s) must be carried out under a long term concession or mandate (there should normally be at least 15 years remaining in each concession or mandate at the time of listing) awarded by government and be of a substantial size (to be of substantial size, the applicant company's share of the total capital cost of the projects should normally be at least HK$1 billion);
              (d) where it is involved in more than one project, the majority of its projects are in the pre-construction or construction stage;
              (e) the bulk of the proceeds of the offering will be used to finance the construction of the project(s) and not principally to repay indebtedness or to acquire other non-infrastructure assets;
              (f) it will not and will procure its subsidiaries or joint venture companies not to acquire any other type of assets or engage in such activity which will result in a change of business from those stipulated in the infrastructure project mandates(s) or contract(s) in the first three years after listing;
              (g) its substantial shareholders and management have the necessary experience, technical expertise, track record and financial strength to carry out the project(s) to completion and to operate it/them thereafter. In particular, its directors and management must have sufficient and satisfactory experience of at least three years in the line of business and industry of the new applicant. Details of such expertise and experience must be disclosed in the listing document of the new applicant; and
              (h) such additional disclosure of matters and documents, including business valuations, feasibility studies, sensitivity analyses and cash flow projections, as the Exchange may at its discretion require, will be included in the listing document of the new applicant; or
              (3) exceptional circumstances where the issuer or its group has a trading record of at least two financial years if the Exchange is satisfied that the listing of the issuer is desirable in the interests of the issuer and investors and that investors have the necessary information available to arrive at an informed judgement concerning the issuer and the securities for which listing is sought. In such cases the Exchange should be consulted at an early stage and additional conditions will be imposed pursuant to rule 2.04.

            • 8.05C

              An issuer or group (other than an investment company in which case the conditions set out in Chapter 21 apply) whose assets consist wholly or substantially of cash or short-dated securities will not normally be regarded as suitable for listing, except where the issuer or group is solely or mainly engaged in the securities brokerage business. "Short-dated securities" means securities such as bonds, bills or notes which have less than one year to maturity.

              Note: See Practice Note 3

            • 8.06

              In the case of a new applicant, the latest financial period reported on by the reporting accountants (see Chapter 4) must not have ended more than six months before the date of the listing document.

            • 8.07

              There must be an adequate market in the securities for which listing is sought. This means that the Exchange must be satisfied that there will be sufficient public interest in the business of the issuer and in the securities for which listing is sought.

            • 8.08

              There must be an open market in the securities for which listing is sought. This will normally mean that:—

              (1)
              (a) at least 25% of the issuer's total number of issued shares must at all times be held by the public.
              (b) where an issuer has one class of securities or more apart from the class of securities for which listing is sought, the total securities of the issuer held by the public (on all regulated market(s) including the Exchange) at the time of listing must be at least 25% of the issuer's total number of issued shares. However, the class of securities for which listing is sought must not be less than 15% of the issuer's total number of issued shares, having an expected market capitalisation at the time of listing of not less than HK$50,000,000.

              Notes:
              (1) Issuers should note that the minimum prescribed percentage of securities must remain in public hands at all times. If the percentage falls below the minimum, the Exchange reserves the right to suspend trading until appropriate steps have been taken to restore the minimum percentage of securities in public hands. In this connection, the Exchange will normally require suspension of trading in an issuer's securities where the percentage of its public float falls below 15% (or 10% in the case of an issuer that has been granted a public float waiver under rule 8.08(1)(d) at the time of listing).
              (2) Where the percentage has fallen below the minimum, the Exchange may refrain from suspension if the Exchange is satisfied that there remains an open market in the securities and either:
              (a) the shortfall in the prescribed percentage arose purely from an increased or newly acquired holding of the listed securities by a person who is, or after such acquisition becomes, a core connected person only because he is a substantial shareholder of the issuer and/or any of its subsidiaries. Such substantial shareholder must not be a controlling shareholder or single largest shareholder of the issuer. He must also be independent of the issuer, directors and any other substantial shareholders of the issuer and must not be a director of the issuer. If the substantial shareholder has any representative on the board of directors of the issuer, he must demonstrate that the representation is on a non-executive basis. In general, the Exchange would expect this to apply to holdings of the listed securities by institutional investors with a wide spread of investments other than in the listed securities concerned. Holdings of the listed securities by venture capital funds which have been involved in the management of the issuer before and/ or after listing would not qualify. The issuer must provide sufficient information to the Exchange to demonstrate the independence of such substantial shareholder and to inform the Exchange of any change in circumstances which would affect his independence as soon as it becomes aware of such change; or
              (b) the issuer and the controlling shareholder(s) or single largest shareholder undertake to the Exchange to take appropriate steps to ensure restoration of the minimum percentage of securities to public hands within a specified period which is acceptable to the Exchange.
              (3) At any time when the percentage of securities in public hands is less than the required minimum, and the Exchange has permitted trading in the securities to continue, the Exchange will monitor closely all trading in the securities to ensure that a false market does not develop and may suspend the securities if there is any unusual price movement.
              (c) Notwithstanding the requirement that the minimum prescribed percentage of securities must at all times remain in public hands, the Exchange may consider granting a temporary waiver to an issuer which is the subject of a general offer under the Takeovers Code (including a privatisation offer), for a reasonable period after the close of the general offer to restore the percentage. The issuer must restore the minimum percentage of securities in public hands immediately after the expiration of the waiver, if granted.
              (d) The Exchange may, at its discretion, accept a lower percentage of between 15% and 25% in the case of issuers with an expected market capitalisation at the time of listing of over HK$10,000,000,000, where it is satisfied that the number of securities concerned and the extent of their distribution would enable the market to operate properly with a lower percentage, and on condition that the issuer will make appropriate disclosure of the lower prescribed percentage of public float in the initial listing document and confirm sufficiency of public float in successive annual reports after listing (see rule 13.35). Additionally, a sufficient portion (to be agreed in advance with the Exchange) of any securities intended to be marketed contemporaneously within and outside Hong Kong must normally be offered in Hong Kong;

              Note: The revised lower prescribed percentage of between 15% and 25% of public float shall not apply retrospectively nor amend arrangements in place before 31March 2004
              (2) for a class of securities new to listing, at the time of listing there must be an adequate spread of holders of the securities to be listed, except where: (a) they are options, warrants or similar rights to subscribe for or purchase shares; (b) they are offered to existing holders of a listed issuer's shares by way of bonus issue; and (c) in the 5 years before the date of the announcement of the proposed bonus issue, there are no circumstances to indicate that the issuer's shares may be concentrated in the hands of a few shareholders. The number will depend on the size and nature of the issue, but in all cases there must be at least 300 shareholders; and
              (3) not more than 50% of the securities in public hands at the time of listing can be beneficially owned by the three largest public shareholders, save where: (a) the securities to be listed are options, warrants or similar rights to subscribe or purchase shares; (b) such securities are offered to existing holders of a listed issuer's shares by way of bonus issue; and (c) in the 5 years preceding the date of the announcement on the proposed bonus issue, there are no circumstances to indicate that the shares of the issuer may be concentrated in the hands of a few shareholders.

            • 8.09

              (1) The expected market capitalisation at the time of listing of the securities of a new applicant which are held by the public (see rule 8.24) in accordance with rule 8.08(1) must be at least HK$50,000,000.
              (2) The expected market capitalisation of a new applicant at the time of listing must be at least HK$200,000,000 which shall be calculated on the basis of all issued shares (including the class of securities for which listing is sought and such other class(es) of securities, if any, that are either unlisted or listed on other regulated market(s)) of the new applicant at the time of listing.
              (3) The expected market capitalisation at the time of listing of each class of securities for which listing is sought, other than options, warrants or similar rights to subscribe or purchase securities, must, in the case of both new applicants and listed issuers, be at least HK$50,000,000.
              (4) In the case of options, warrants or similar rights to subscribe or purchase securities for which listing is sought, the expected market capitalisation at the time of listing must, in the case of both new applicants and listed issuers, be at least HK$10,000,000.
              (5) Further issues of securities of a class already listed are not subject to the limits set out in this rule. In exceptional cases, a lower expected initial market capitalisation may be acceptable where the Exchange is satisfied as to marketability.

              Note: The fact that an applicant is able to satisfy the minimum market capitalisation criterion does not of itself mean that the applicant will be accepted as suitable for listing.

            • 8.09A

              The expected issue price of the securities for which listing is sought shall be used as a basis for determining the market value of the other class(es) of securities of the new applicant that are unlisted, or listed on other regulated market(s).

            • 8.10

              (1) Where a new applicant has a controlling shareholder with an interest in a business apart from the applicant's business which competes or is likely to compete, either directly or indirectly, with the applicant's business (the "excluded business"):
              (a) the applicant's listing document must prominently disclose the following:
              (i) reasons for the exclusion of the excluded business;
              (ii) a description of the excluded business and its management, to enable investors to assess the nature, scope and size of such business, with an explanation as to how such business may compete with the applicant's business;
              (iii) facts demonstrating that the applicant is capable of carrying on its business independently of, and at arms length from the excluded business;
              (iv) whether the controlling shareholder intends to inject the excluded business into the applicant in future, together with the time frame during which the controlling shareholder intends to or does not intend to inject the excluded business. If there is any change in such information after listing, the applicant must disclose it by way of an announcement published in accordance with rule 2.07C as soon as it becomes aware of such change; and
              (v) any other information considered necessary by the Exchange;

              Note: See also paragraph 27A of Appendices 1A and 1E.
              (b) if after its listing the applicant proposes to acquire all or part of the excluded business, the enlarged group must meet the trading record requirements of rule 8.05; and
              (c) all connected transactions between the excluded business and the applicant after listing must strictly comply with the requirements of chapter 14A.

              Note: An interest in an excluded business may consist of the following:
              (i) where the business is conducted through a company, an interest as a director (other than an independent non-executive director) or a substantial shareholder of such company;
              (ii) where the business is conducted through a partnership, an interest as a partner in such partnership; or
              (iii) where the business is conducted as a sole proprietorship, the interest as the sole proprietor of such business.

              Where such company is a holding company, the applicant may disclose the information required under rule 8.10(1)(a) for such company and its subsidiaries on a group basis.
              (2) Where any of the directors of a new applicant is interested in any business apart from the applicant's business, which competes or is likely to compete, either directly or indirectly, with the applicant's business:
              (a) the applicant's listing document must prominently disclose the information required under rule 8.10(1)(a)(ii) and (iii) of each director's interest in such business and any other information considered necessary by the Exchange;
              (b) after listing, the directors (including any director appointed after listing) must continue to prominently disclose details as required under rule 8.10(2)(a) of any such interests (including any interests acquired after listing) in the applicant's annual reports; and
              (c) the directors must also prominently disclose in the applicant's annual reports any change in details previously so disclosed in the applicant's listing document or annual reports.
              Notes:
              (1) A director's interest in such a business may consist of the following:
              (i) where the business is conducted through a company, an interest as a director (other than an independent non-executive director) or a substantial shareholder of such company;
              (ii) where the business is conducted through a partnership, an interest as a partner in such partnership; or
              (iii) where the business is conducted as a sole proprietorship, the interest as the sole proprietor of such business.
              Where such company is a holding company, the applicant may disclose the information required under rule 8.10(2) for such company and its subsidiaries on a group basis.
              (2) Listed issuers must comply with the disclosure requirements under rule 8.10(2)(b) and (c) commencing from the first annual report published after 30th April 2000.
              (3) The disclosure requirements under rule 8.10(2) do not apply to independent non-executive directors of a new applicant or a listed issuer.
              (3) In cases where rule 8.10(1) or (2) applies, the Exchange may require the appointment of a sufficient number of independent non-executive directors to ensure that the interests of the general body of shareholders will be adequately represented.

              Note: Directors are reminded of their fiduciary duties to the issuer and that they must, in the performance of their duties as directors, avoid actual and potential conflicts of interest and duty. Such considerations may arise in situations where directors have business interests which are similar to those of the issuer or where it is proposed that the issuer makes any decision to acquire or not to acquire any such asset or business. The attention of the directors is also drawn to the duty of directors not to profit themselves to the detriment of the issuer.

            • 8.11

              The share capital of a new applicant must not include shares of which the proposed voting power does not bear a reasonable relationship to the equity interest of such shares when fully paid ("B Shares"). The Exchange will not be prepared to list any new B Shares issued by a listed issuer nor to allow any new B Shares to be issued by a listed issuer (whether or not listing for such shares is to be sought on the Exchange or any other stock exchange) except:—

              (1) in exceptional circumstances agreed with the Exchange; or
              (2) in the case of those listed companies which already have B Shares in issue, in respect of further issues of B Shares identical in all respects with those B Shares by way of scrip dividend or capitalisation issue, provided that the total number of B Shares in issue remains substantially in the same proportion to the total number of other voting shares in issue as before such further issue.

            • 8.12

              A new applicant applying for a primary listing on the Exchange must have a sufficient management presence in Hong Kong. This will normally mean that at least two of its executive directors must be ordinarily resident in Hong Kong.

            • 8.13

              The securities for which listing is sought must be freely transferable. Partly-paid securities will normally be regarded as fulfilling this condition provided that in the Exchange's view their transferability is not unreasonably restricted and dealings in them can take place on an open and proper basis. Existing issued securities which are offered for sale on an instalment payment basis, approved by the Exchange, will normally be regarded as fulfilling this condition.

              Note: Since it is not common practice in Hong Kong for purchasers to register every transaction, a vendor of a partly-paid security cannot ensure that his name is removed from the register and he may therefore retain his original liability to pay further calls on the security. In order for the Exchange to be satisfied that dealings in partly-paid securities can take place on an open and proper basis, an issuer must satisfy the Exchange that either:—

              (a) adequate arrangements have been put in place to ensure that the vendor of the partly-paid security can effectively transfer all of the liability to pay further calls on the security to the purchaser without any right of recourse; or
              (b) the issuer has limited the amount unpaid to a maximum of 50 per cent. of the issue price and the securities will become fully paid within twelve months from the date of issue and that the issuer has made full and detailed disclosure of the peculiar risks attaching to such securities whilst they remain partly-paid; or
              (c) the issuer has made provisions which will ensure that every trade in the securities has to be registered such that vendors of the securities do not remain as the registered holders after the settlement of the trade.

            • 8.13A

              (1) In the case of a new applicant or a listed issuer in respect of a class of securities new to listing, the securities for which listing is sought must be Eligible Securities from the date on which dealings in the securities are to commence.
              (2) The new applicant or the listed issuer must make all necessary arrangements to comply with sub-paragraph (1).
              (3) Sub-paragraph (1) does not apply in the case of a new applicant or a listed issuer which is unable to satisfy the eligibility criteria as determined from time to time by HKSCC by reason only of a provision of law affecting the transferability or ownership of the new applicant's or the listed issuer's securities.
              (4) The Exchange may, in exceptional circumstances and in the absolute discretion of the Exchange, waive compliance with sub-paragraph (1).
              (5) An issuer shall ensure, so far as it is able, that its securities remain Eligible Securities.

            • 8.14

              The securities for which listing is sought must be issued in conformity with the law of the place where the issuer is incorporated or otherwise established and in conformity with the issuer's memorandum and articles of association or equivalent documents and all authorisations needed for their creation and issue under such law or documents must have been duly given.

            • 8.15

              Without prejudice to the specific requirements for management experience under rules 8.05A, 8.05B(2) and 18.04, the persons proposed to hold office as directors of the issuer must meet the requirements of Chapter 3 to the satisfaction of the Exchange.

            • 8.16

              The issuer must be an approved share registrar or employ an approved share registrar to maintain in Hong Kong its register of members.

            • 8.17

              The issuer must appoint a company secretary who satisfies rule 3.28.

            • 8.18

              Securities to which options, warrants or similar rights to subscribe or purchase equity securities are attached must comply both with the requirements applicable to the securities for which listing is sought and with the requirements applicable to such options, warrants or similar rights (see Chapter 15).

            • 8.19

              Where application for listing is made in respect of any class of securities:—

              (1) if none of the securities of that class are already listed, the application must relate to all securities of that class issued or proposed to be issued; or
              (2) if some of the securities of that class are already listed, the application must relate to all further securities of that class issued or proposed to be issued.

            • 8.20

              Listing must be sought for all further issues of securities of a class already listed prior to the issue of the securities.

            • 8.21

              (1) Subject to (2) below the Exchange will not normally consider an application for listing from a new applicant which:—
              (a) has changed the period of its financial year during the latest complete financial year (being twelve months) immediately preceding the proposed date of issue of the listing document; or
              (b) intends to change the period of its financial year during the period of the profit forecast, if any, or the current financial year, whichever is the longer period.
              (2) Notwithstanding (1) above, a subsidiary of the new applicant will normally be permitted to change the period of its financial year provided that:—
              (a) the change is to make the subsidiary's financial year coterminous with that of the new applicant;
              (b) appropriate adjustments are made in the trading record and profit forecast and such adjustments are fully explained in statements which must be provided to the Exchange; and
              (c) adequate disclosure is provided in the listing document and the accountants' report of the reason for the change and the effect of the change on the new applicant's group trading record or profit forecast.

            • 8.21A

              (1) A new applicant must include a working capital statement in the listing document. In making this statement the new applicant must be satisfied after due and careful enquiry that it and its subsidiary undertakings, if any, have available sufficient working capital for the group's present requirements, that is for at least the next 12 months from the date of publication of the listing document. The sponsor to the new applicant must also confirm to the Exchange in writing that:
              (a) it has obtained written confirmation from the new applicant that the working capital available to the group is sufficient for its present requirements, that is for at least the next 12 months from the date of publication of the listing document; and
              (b) it is satisfied that this confirmation has been given after due and careful enquiry by the new applicant and that the persons or institutions providing finance have stated in writing that the relevant financing facilities exist.
              Note: This rule is modified for a new applicant Mineral Company which must comply with the requirements of Listing Rules 18.03(4) and 18.03(5).
              (2) The Exchange will not require a working capital statement to be made by a new applicant, whose business is entirely or substantially that of the provision of financial services, provided the Exchange is satisfied that:
              (a) the inclusion of such a statement would not provide significant information for investors; and
              (b) the new applicant's solvency and capital adequacy are subject to prudential supervision by another regulatory body.
              Note: Refer to Chapter 3A for other sponsor obligations.

            • 8.21B [Repealed]

              [Repealed 1 February 2012]

          • Deemed New Applicants

            • 8.21C

              Without prejudice to the generality of other applicable provisions of the Exchange Listing Rules, a listed issuer that is treated as if it were a new applicant must meet all the basic conditions set out in this Chapter 8, unless otherwise waived by the Exchange. In particular, where there are assets to be injected into or acquired by the listed issuer, the assets to be injected or acquired or the enlarged group must meet the requirements under rule 8.05, and the enlarged group must meet all the other basic conditions set out in this Chapter 8. In cases of doubt, issuers or advisers should consult the Exchange at an early stage.

          • Underwriters

            • 8.22

              The Exchange reserves the right to inquire of an issuer as to the financial suitability of any proposed underwriter and may reject an application for listing if it is not satisfied as to the underwriter's ability to meet its underwriting commitment.

          • Basis of allocation and "the public"

            • 8.23

              Upon the closing of the offering period of a new applicant, new applicants and underwriters must adopt a fair basis of allocation of the securities on offer to the public.

            • 8.24

              The Exchange will not regard any core connected person of the issuer as a member of "the public" or shares held by him as being "in public hands". In addition the Exchange will not recognise as a member of "the public":—

              (1) any person whose acquisition of securities has been financed directly or indirectly by a core connected person;
              (2) any person who is accustomed to take instructions from a core connected person in relation to the acquisition, disposal, voting or other disposition of securities of the issuer registered in his name or otherwise held by him.

        • Chapter 9 Application Procedures and Requirements

          • Preliminary

            • 9.01

              This Chapter sets out the procedures and requirements for applications for the listing of equity securities, whether by new applicants or by listed issuers. This Chapter does not apply to a transfer of listing from GEM to the Main Board pursuant to Chapter 9A.

            • 9.02

              New applicants are reminded (see Chapter 3A) that the sponsor is responsible for lodging the listing application and all supporting documents and for dealing with the Exchange on all matters arising in connection with the application.

            • 9.03

              (1) A new applicant must apply for a listing on a Form A1 set out in Appendix 5. This form must be completed by the sponsor for the new applicant and accompanied by:—
              (a) the documents stipulated in rule 9.10A(1); and
              (b) the initial listing fee.

              Notes:
              1. If an estimated figure for the monetary value of the equity securities to be listed is used to calculate the initial listing fee, the sponsor must inform the Exchange of the actual figure as soon as it is determined. Any shortfall of the initial listing fee arising must be paid to the Exchange as soon as the actual monetary value of the equity securities to be listed is determined and in any event before dealings commence.
              2. If the Exchange returns an application to a sponsor before the Exchange issues its first comment letter to the sponsor, the initial listing fee will be refunded; and in other cases the initial listing fee will be forfeited.
              If an applicant has delayed its proposed timetable and more than 6 months have elapsed since the date of its listing application form, the applicant will forfeit the initial listing fee. An applicant wishing to reactivate its listing application must submit a new listing application form accompanied by the initial listing fee. If there is a change in sponsor (including an addition or removal of a sponsor), the applicant must also submit a new listing application form accompanied by the initial listing fee.
              Note: See also Chapter 2B for other circumstances when a new applicant may be required to submit a new listing application form.
              (2) The listing application form must contain a draft timetable which is subject to agreement with the Exchange. Any changes to a timetable must also be agreed with the Exchange. If an applicant wishes to reactivate its listing application that has been delayed and the date of the reactivation is within 6 months of the date of the listing application form, the applicant must submit a revised timetable which is subject to agreement with the Exchange. A new applicant must update the Exchange on the progress of the listing application on a fortnightly basis. The Exchange also reserves the right to require an applicant to amend its timetable in situations including (but not limited to), where the applicant fails to submit the necessary documentation in a timely fashion or where the Exchange has outstanding comments or queries that cannot be resolved in a timely fashion.
              (3) An applicant must submit a listing application form, an Application Proof and all other relevant documents under rule 9.10A(1), and the information in these documents must be substantially complete except in relation to information that by its nature can only be finalised and incorporated at a later date. If the Exchange decides this information is not substantially complete, the Exchange will not continue to review any documents relating to the application. All documents, including the Form A1 (except for the retention of a copy of these documents for the Exchange's record) submitted to the Exchange will be returned to the sponsor. The initial listing fee will be dealt with in the manner described in note 2 to rule 9.03(1)(b) above. For applications which were previously returned by the Exchange, the applicant can only submit a new Form A1 together with a new Application Proof not less than 8 weeks after the Return Decision.

              Note: An application when submitted, must be accompanied by 2 CD-ROMs containing the Application Proof and other documents the Exchange may require.
              (4) The Exchange may require an applicant to delay the expected hearing date if, during the review process, the Exchange believes the following cannot be fulfilled by the applicant at least 4 clear business days before the expected hearing date:—
              (a) the submission of the revised proof of the listing document containing sufficient and appropriate disclosure of all the requisite information as set out in Chapter 11;
              (b) the submission of any outstanding documents as requested by the Exchange; and
              (c) the Exchange's queries and comments being satisfactorily addressed in a timely fashion.
              (5) During the review process, the sponsor should not revise the contents of the listing document on a piece-meal basis. A revised proof of the listing document must completely address all the Exchange's comments on the previous proof. The Exchange may elect not to review a revised proof that fails to meet this requirement.

            • 9.04

              In order to maintain an orderly new issues market the Exchange reserves the right to refuse a listing application or to change the timetable.

            • 9.05

              Where any document is amended after submission, a like number of further copies must be submitted to the Exchange for review, marked in the margin to indicate where the relevant items from Appendix 1 have been met. Such copies must also be marked in the margin to indicate amendments made to conform with points raised by the Exchange.

              Note: In the case of a new listing applicant, each amended document, when submitted, must be accompanied by such number of CD-ROMs containing the same document as the Exchange may require.

            • 9.06

              No material amendment to the final proof listing document will be allowed without the consent of the Exchange.

            • 9.07

              The listing document must not be issued until the Exchange has confirmed to the issuer that it has no further comments thereon. However, in the case of a new applicant, circulation of a draft or preliminary listing document, which is clearly marked as such and which states that it is subject to final review by the Exchange is permitted for the purposes of arranging underwriting.

            • 9.08

              No publicity material on an issue of securities by a new applicant can be released in Hong Kong by a new applicant or its agents unless and until the Exchange has reviewed it and confirmed to the applicant that it has no comments. In addition, the publicity material must comply with all statutory requirements. If the Exchange believes that a new applicant or its advisers have permitted information on the listing of the new applicant's securities to leak, the Exchange will normally delay the application for the listing of those securities. For these purposes:

              (1) publicity material does not relate to an issue of securities if its purpose is the promotion of the issuer or its products or business and not the promotion of the securities to be issued;
              (2) the following documents do not fall within the scope of this rule and need not be submitted for prior review:
              (a) an Application Proof published on the Exchange's website under rule 12.01A;
              (b) a Post Hearing Information Pack published on the Exchange's website under rule 12.01B;
              (c) any statement by a new applicant published on the Exchange's website stating that no reliance should be placed on any media reports about the new applicant subsequent to the publication of its Application Proof or the Post Hearing Information Pack, as the case may be; and
              (d) the invitation or offering document (or its equivalent) and documents that consist of, or are drafts of, or relate to, agreements to be entered into in connection with the issue of the securities. This is provided that any obligations created by these agreements to issue, subscribe, purchase or underwrite the securities are conditional on listing being granted;
              (3) any publicity material or announcement referring to a proposed listing by a new applicant issued before the Listing Committee's meeting to consider the application, must state that an application has been or will be made to the Exchange for listing of and permission to deal in the securities concerned; and
              (4) where any material relating to a proposed listing by a new applicant is released without the Exchange's prior review before the Listing Committee's meeting to consider the application, the Exchange may delay the timetable for the proposed Listing Committee meeting by up to a month. If this results in the Form A1 being more than 6 months old, the applicant will have to re-submit its application with the initial listing fee (see rule 9.03(1)).

            • 9.09

              There must be no dealing in the securities for which listing is sought by any core connected person of the issuer (except as permitted by rule 7.11):

              (a) in the case of listing application by listed issuers, from the time of submission of the formal application for listing until listing is granted; and
              (b) in the case of a new applicant, from 4 clear business days before the expected hearing date until listing is granted.

              The directors of the issuer for whose securities listing is being sought shall forthwith notify the Exchange of any such dealing or suspected dealing of which they become aware. If any of the directors or their close associates are found to have engaged in such dealing, the application may be rejected.

            • 9.10

              Issuers are also reminded that these requirements are not exhaustive and that an applicant for listing must also supply any further documents and information which the Exchange may require in a particular case.

          • Documentary Requirements — New Listing Applications

            • 9.10A

              The documents under rules 9.11(1) to (38) must be lodged with the Exchange according to the following schedule:

              (1) documents under rules 9.11(1) to 9.11(17c) must be lodged at the time of submission of Form A1;
              (2) [Repealed 1 October 2013]
              (3) documents under rules 9.11(18) to 9.11(22) must be lodged at least 4 clear business days before the expected hearing date;
              (4) documents under rules 9.11(24) to 9.11(28a) must be lodged before bulk-printing of the listing document;
              (5) documents under rules 9.11(29) to 9.11(32) must be lodged as soon as practicable after the hearing of the application by the Listing Committee but on or before the date of issue of the listing document;
              (6) document under rule 9.11(33) must be lodged by no later than 11 a.m. on the intended date of authorisation of the prospectus; and
              (7) documents under rules 9.11(34) to 9.11(38) must be lodged as soon as practicable after the issue of the listing document but before dealings commence.

            • 9.11

              The following documents must be lodged with the Exchange by a new applicant in connection with its listing application:—

              Together with the Form A1

              (1) such number of copies of an Application Proof as required by the Exchange and 2 CD-ROMs containing the Application Proof and other documents as the Exchange may require, together with, in respect of each sponsor to the application for listing, an undertaking and statement of independence under rule 3A.03 in the form in Appendix 17 duly signed on the sponsor's behalf, and an undertaking under rule 3A.21 in the form in Appendix 20, duly signed on the compliance adviser's behalf;
              (2) [Repealed 2 November 2009]
              (3) a final or an advanced draft of all requests for waiver from the requirements of the Exchange Listing Rules and the provisions of the Companies (Winding Up and Miscellaneous Provisions) Ordinance from the sponsor and the directors/proposed directors;
              (3a) a written confirmation signed by each director/supervisor that the information in the Application Proof is accurate and complete in all material respects and is not misleading or deceptive;
              (3b) a written confirmation and undertaking signed by each director/supervisor and proposed director/supervisor to the following effect:
              (i) that the Application Proof referred to in rule 9.11(1) above contains all information about the biographical details of such director/supervisor or proposed director/supervisor as set out in rule 13.51(2) and that those details are true, accurate and complete;
              (ii) where, before dealings commence, there are any changes in the biographical details as set out in rule 9.11(3b)(i) above, to inform the Exchange as soon as practicable of such changes; and
              (iii) to lodge with the Exchange in accordance with rule 9.11(38) a declaration and undertaking, in Form B/H/I in Appendix 5, duly signed by each director/ supervisor and proposed director/supervisor.
              If a director/supervisor is appointed after the submission of the Form A1, then the director/supervisor must submit a duly signed written confirmation and undertaking referred to in this sub-rule as soon as he is appointed. The reference to the Application Proof referred to in rule 9.11(1) above in the confirmation and undertaking shall be read as a reference to the relevant draft listing document that contains the biographical details of such director/supervisor;
              (3c) where the Application Proof contains an accountants' report, an advanced draft of any statement of adjustments relating to the accountants' report;
              (4) in the case of the listing of depositary receipts, a draft deposit agreement and a specimen certificate for the depositary receipts;
              (5) in the case of the listing of depositary receipts, a legal opinion from legal advisers in the jurisdiction which governs the deposit agreement confirming:—
              (a) that the deposit agreement (taken by itself or together with any deed poll conferring certain rights on holders of depositary receipts) creates valid and binding rights and obligations between the issuer, depositary and the holders of the depositary receipts in accordance with its terms; and
              (b) addressing any other matters as the Exchange may have previously requested.
              (6)–(8) [Repealed 2 November 2009]
              (9) [Repealed 1 January 2009]
              (10)
              (a) where the Application Proof contains a profit forecast (see rules 11.16 to 11.19), a final or an advanced draft of the board's profit forecast memorandum covering the same period of the profit forecast contained in the Application Proof and cash flow forecast memorandum covering at least 12 months from the expected date of publication of the listing document with principal assumptions, accounting policies and calculations for the forecasts;
              (b) where the Application Proof does not contain a profit forecast, a final or an advanced draft of the board's profit forecast memorandum covering the period up to the forthcoming financial year end date after the date of listing and cash flow forecast memorandum covering at least 12 months from the expected date of publication of the listing document with principal assumptions, accounting policies and calculations for the forecasts;
              (11)–(17) [Repealed 2 November 2009]
              (17a) a certified copy of the new applicant's certificate of incorporation or equivalent document;
              (17b) where the Application Proof is required to contain a statement by the directors as to the sufficiency of working capital, an advanced draft of a letter from its sponsor confirming that it is satisfied that the sufficiency of working capital statement in the Application Proof has been made by the directors after due and careful enquiry;
              (17c) any document as may be required by the Exchange in support of the application for listing;

              At least 4 clear business days before the expected hearing date

              (18) such number of copies of the final proof of the listing document as required by the Exchange together with 2 CD-ROMs containing the same proof of listing document as the Exchange may require;
              (19) [Repealed 1 October 2013]
              (20) a confirmation from the new applicant's legal advisers that the new applicant's articles of association conform with the relevant parts of Appendices 3 and 13, and on the whole, are not inconsistent with the Exchange Listing Rules and the laws of the place where the new applicant is incorporated or otherwise established;
              (21) in the case of the listing of depositary receipts, a certified copy of the signed deposit agreement;
              (22) unless previously provided, all executed requests for waiver from the requirements of the Exchange Listing Rules and the provisions of the Companies (Winding Up and Miscellaneous Provisions) Ordinance;
              (23) [Repealed 1 October 2013]

              Before bulk-printing of the listing document

              (24) a final proof of the formal notice, where applicable;
              (25) a final proof of any application form (including any excess or preferential application form) to subscribe or purchase the securities for which listing is sought;
              (26) [Repealed 1 October 2013]
              (27) in the case of a new applicant under Chapters 20 and 21, 3 copies of the listing agreement in the form prescribed and provided by the Exchange, each duly signed for and on behalf of the new applicant;
              (28) where the listing document is required to contain a sufficiency of working capital statement by the directors, a final letter from its sponsor confirming that it is satisfied that the statement in the listing document as to the sufficiency of working capital has been made by the directors after due and careful enquiry and that persons or institutions providing finance have stated in writing that such facilities exist;
              (28a) a final copy of all draft documents which have been submitted to the Exchange in support of the application for listing;

              As soon as practicable after the hearing of the application by the Listing Committee but on or before the date of issue of the listing document

              (29)
              (a) a copy of each of the English and the Chinese language version of the listing document dated and signed by every person who is named therein as a director or proposed director of the new applicant or by his agent authorised in writing and by the secretary and the relevant application form (including any excess or preferential application form) to subscribe or purchase the securities for which listing is sought;
              (b) a copy of the formal notice, where applicable; and
              (c) where any document or application form referred to in (a) above is signed by an agent, a certified copy of the authorisation or the power of attorney for such signature;
              (30) a copy of the written notification issued by HKSCC stating the securities will be Eligible Securities;
              (31) every written undertaking and confirmation from the new applicant, its shareholders and/or other relevant parties to the Exchange referred to in the listing document;
              (32) the original signed sponsor declaration(s) required by rule 3A.13 in the form in Appendix 19;

              In case of a listing document which constitutes a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance, by 11 a.m. on the intended date of authorisation of the prospectus

              (33)
              (a) an application for authorisation for registration of the prospectus under section 38D(3) or section 342C(3) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (as the case may be);
              (b) 2 printed copies of the prospectus, duly signed in accordance with section 38D(3) or section 342C(3) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (as the case may be) and having endorsed on or attached to the documents stipulated by the relevant section; and
              (c) in respect of every Chinese translation of the prospectus, a certificate issued by the translator certifying that the Chinese translation of the English version of the prospectus is true and accurate or in respect of an English translation of the prospectus, a certificate issued by the translator certifying that the English translation of the Chinese version of the prospectus is true and accurate; and in either case, a certificate issued by a competent officer of the sponsor certifying that the translator is competent to give translations on prospectus documents;

              As soon as practicable after the issue of the listing document but before dealings commence as a condition for granting listing approval

              (34)
              (a) a certified copy of the resolution(s) of the new applicant in general meeting (if any) authorising the issue of all securities for which listing is sought; and
              (b) a certified copy of the resolution(s) of the board of directors or other governing body or any other person to whom it has properly delegated these powers (together, in such cases, with a certified copy of the power of attorney or resolution delegating the powers) authorising the issue and allotment of such securities, the making of the application for listing in Form A1 in Appendix 5, and where applicable, the making of all necessary arrangements enabling such securities to be admitted into CCASS, and the signing of the listing agreement, and approving and authorising the issue of the listing document;
              (35) in the case of a placing of securities:—
              (a) a copy of the placing letter and separate marketing statements in Form D in Appendix 5 signed by each of: (i) the lead broker; (ii) any distributors; and (iii) any Exchange Participant referred to in paragraph 9 of Appendix 6; and
              (b) a list from each placing broker setting out the names, addresses and identity card or passport numbers (where individuals) and the names, addresses and registration numbers (where companies) of all its placees, the names and addresses of the beneficial owners (in the case of nominee companies) and the amounts taken up by each of its placees. Such lists may be supplied directly to the Exchange by each placing broker in order to maintain confidentiality;
              (36) a declaration substantially as in Form E in Appendix 5, duly signed by the sponsor;
              (37) a declaration substantially as in Form F in Appendix 5, duly signed by a director and the secretary of the new applicant together with any annual listing fee which is payable and which has not previously been paid (see Appendix 8); and
              (38) a written declaration and undertaking, in Form B/H/I in Appendix 5, duly signed by each director/supervisor and proposed director/supervisor of the new applicant.

            • 9.12 [Repealed]

              [Repealed 2 November 2009]

            • 9.13 [Repealed]

              [Repealed 2 November 2009]

            • 9.14 [Repealed]

              (1)
              (a) [Repealed 2 November 2009]
              (b) [Repealed 2 November 2009]
              (c) [Repealed 1 September 2008]
              (d) [Repealed 2 November 2009]
              (2)–(3) [Repealed 2 November 2009]
              (4) [Repealed 1 September 2008]
              (5) [Repealed 1 September 2008]
              (6)–(8) [Repealed 2 November 2009]

            • 9.15 [Repealed]

              [Repealed 2 November 2009]

            • 9.16 [Repealed]

              (1) [Repealed 25 June 2007]
              (2) [Repealed 2 November 2009]
              (3) [Repealed 25 June 2007]
              (4) [Repealed 25 June 2007]
              (5) [Repealed 25 June 2007]
              (6)–(13) [Repealed 2 November 2009]

          • Documentary Requirements — Applications by Listed Issuers

            • 9.17

              Rules 9.18 to 9.23 set out the documentary requirements for applications for the listing of equity securities by listed issuers.

          • At the time of application for listing

            • 9.18

              A listed issuer applying for the listing of equity securities must submit to the Exchange a listing application in the form set out in Form C1 in Appendix 5, signed by a duly authorised officer of the issuer, together with payment of the subsequent issue fee (see Appendix 8). The application must be submitted:

              (1) if it is required to be supported by a listing document, at least 10 clear business days before the date on which the issuer proposes to bulk print the listing document; and
              (2) if it is not required to be supported by a listing document, at least 4 clear business days before the proposed date for issuing the securities.

            • 9.19

              The following documents, as applicable, must be lodged with the Exchange together with the listing application:—

              (1) such number of copies of drafts or proofs of the listing document as the Exchange may require, marked in the margin to indicate where the relevant paragraphs from Chapter 11 and/or Part B/F of Appendix 1 and/or the Companies (Winding Up and Miscellaneous Provisions) Ordinance have been met;
              (2) if the listing document contains an accountants' report, a draft of any statement of adjustments relating to the accountants' report;
              (3) if the listing document contains a profit forecast (see rules 11.16 to 11.19), a draft of the board's profit forecast memorandum with principal assumptions, accounting policies and calculations for the forecast; and
              (4) for issue of new warrants to existing warrant holders, a legal opinion, from a lawyer of the relevant jurisdiction, confirming that the warrant proposal complies with the relevant provisions of the issuer's constitutive documents and the terms of the existing warrant instrument (see paragraph 4(f) of Practice Note 4).

          • Before bulk-printing of the listing document

            • 9.20

              The following documents must be submitted to the Exchange before bulk-printing of the listing document:—

              (1) if the listing document contains a statement as to the sufficiency of working capital, a letter from the issuer's financial advisers or auditors, confirming that:
              (a) the statement has been made by the directors after due and careful enquiry; and
              (b) persons or institutions providing finance have stated in writing that such facilities exist; and
              (2) if the vendor of securities being marketed has not paid in full for those securities at the date of the offer:—
              (a) a certified copy of an irrevocable authority given by the vendor to the receiving bankers for the offer authorising the receiving bankers to apply the proceeds of the offer to discharge the outstanding debt; and
              (b) a certified copy of the receiving bankers' acknowledgement of this authority and an agreement to act on it.

          • On or before the date of issue of the listing document

            • 9.21

              The following documents must be submitted to the Exchange on or before the date of issue of the listing document:—

              (1) every written undertaking from the listed issuer, its shareholders and/or other relevant parties to the Exchange referred to in the listing document; and
              (2) for listing of a new class of securities, a copy of the written notification issued by HKSCC stating that the securities will be Eligible Securities.

          • In case of a listing document constituting a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance

            • 9.22

              If the listing document constitutes a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance, the following documents must be submitted to the Exchange:—

              (1) at least 14 days before the proposed date of registration of the prospectus by the Registrar of Companies, notice of the proposed date of registration of the prospectus (see rule 11A.09);
              (2) by 11 a.m. on the intended date of authorisation for registration of the prospectus,
              (a) an application for authorisation for registration of the prospectus under section 38D(3) or section 342C(3) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (as the case may be);
              (b) two printed copies of the prospectus, duly signed in accordance with section 38D(3) or section 342C(3) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (as the case may be) and having endorsed thereon or annexed thereto the documents required under the relevant section;
              (c) in respect of every Chinese translation of the prospectus,
              (i) a certificate issued by the translator certifying that the Chinese translation of the English version of the prospectus is true and accurate; and
              (ii) a certificate issued by the issuer certifying that the translator is competent to have given the certificate referred to in (i) above; and
              (d) any power of attorney or other authority under which the prospectus is signed, together with a certified copy thereof; and
              (3) as soon as after the registration of the prospectus, a copy of the letter from the Registrar of Companies confirming the registration (see rule 2.07C(1)(b)(ii)).

          • Before dealings commence

            • 9.23

              The following documents must be submitted to the Exchange before dealings commence:—

              (1) a certified copy of the resolution(s) of the board of directors or other governing body or any other person to whom it has properly delegated these powers (together, in such cases, with a certified copy of the power of attorney or resolution delegating the powers) authorising the issue and allotment of such securities, the making of the application for listing in the form set out in Form C1 in Appendix 5, and where applicable, the making of all necessary arrangements enabling such securities to be admitted into CCASS, and approving and authorising the issue of the listing document;
              (2) in the case of the placing by a listed issuer of a class of securities new to listing:
              (a) a copy of the placing letter and separate marketing statements in the form set out in Form D in Appendix 5, signed by each of: (i) the lead broker; (ii) any distributors; and (iii) any Exchange Participant referred to in paragraph 9 of Appendix 6; and
              (b) a list from each placing broker setting out the names, addresses and identity cards or passport numbers (in the case of individuals) and the names, addresses and registration numbers (in the case of companies) of all its placees, the names and addresses of the beneficial owners (in the case of nominee companies) and the amounts taken up by each of its placees. Such lists may be supplied directly to the Exchange by each placing broker in order to maintain confidentiality.
              In the case of the placing by a listed issuer of a class of securities already listed, the Exchange may require the issuer to submit information on the placees for the purpose of establishing their independence (see also rule 13.28(7));
              (3) in the case of securities issued as consideration for shares in a listed company which are acquired under Division 4 of Part 13 of the Companies Ordinance, a certified copy of the notice given under that section;
              (4) if the listing document provides for a capital reduction, scheme of arrangement or similar proposal requiring the approval of the court, a certified copy of the court order and of any certificate of registration issued by the Registrar of Companies or of any equivalent document;
              (5) if required, a declaration from the security printers responsible for production of bearer documents of title in accordance with paragraph 25 of Part B of Appendix 2; and
              (6) a declaration substantially in the form set out in Form F in Appendix 5, signed by a director and the secretary of the issuer together with any annual listing fee which is payable and which has not previously been paid (see Appendix 8).

        • Chapter 9A Transfer of Listing from GEM to Main Board

          • Preliminary

            • 9A.01

              Application for a transfer of listing shall be approved by the Listing Committee as set out in rule 2A.05, subject to the relevant review powers.

          • Qualifications for transfer

            • 9A.02

              An issuer may apply for a transfer of listing of its securities from GEM to the Main Board if:

              (1) it meets all the qualifications for listing on the Main Board set out in the Exchange Listing Rules, subject to the exceptions set out in rule 9A.03;

              Note: In order to be listed on the Main Board, the applicant must continue to meet the qualifications referred to in rule 9A.02(1) up to the commencement of dealings in its securities on the Main Board.
              (2) once it complies with GEM rule 18.03 in respect of its financial results for the first full financial year commencing after the date of its initial listing; and
              (3) in the 12 months preceding the transfer application and until the commencement of dealings in its securities on the Main Board, it has not been the subject of any disciplinary investigation by the Exchange in relation to a serious breach or potential serious breach of any GEM Listing Rules or Exchange Listing Rules.

            • 9A.03

              For the purposes of rule 9A.02(1) and except where expressly required under this Chapter, the following listing qualifications and disclosure requirements do not apply to a transfer of listing from GEM to the Main Board:—

              (1) all requirements relating to application procedures, listing document and prospectus under Chapters 9, 11 and 11A;
              (2) all requirements under Chapter 3A relating to the appointment and obligations of a sponsor;

              Note: This includes ancillary provisions such as the listing applicant's obligation to assist the sponsor.
              (3) rule 8.06 relating to the latest financial period reported on by the reporting accountants.

            • 9A.04

              Where an applicant for transfer of listing under this chapter is an infrastructure company, a mineral company or an investment company to which any of rules 8.05B (1) and (2), Chapter 18 or Chapter 21 applies:

              (1) it must comply with all listing qualifications set out in rules 8.05B (1) and (2), Chapter 18 or Chapter 21 (as the case may be), with such modifications as the Exchange may determine;
              (2) it must disclose by way of a circular all information required under rule 8.05B(2), Chapter 18 or Chapter 21 (as the case may be) to be disclosed in a listing document, including any statement required to be made by professional adviser(s), with such modifications as the Exchange may determine; and
              (3) the circular must be issued, published and dispatched by the applicant in accordance with rules 2.07C and also distributed to its members and holders of its listed securities in the same manner as prescribed for the distribution of annual reports and accounts under rule 13.46 on the same day as the announcement required under rule 9A.08.

          • Application for transfer

            • 9A.05

              It is the intention of the Exchange, as far as possible, to base any decision to approve or reject a transfer application on the issuer's existing recent public disclosures. Where relevant information is not available or where circumstances otherwise demand, the Exchange may in addition request further information to be supplied by the issuer and/ or its management, where appropriate in the form of written confirmation. The Exchange may require such additional information to be disclosed. Issuers are reminded that these requirements are not exhaustive and that the Exchange may impose additional requirements in a particular case.

            • 9A.06

              An applicant for transfer of listing under this chapter shall submit to the Exchange the following documents:

              (1) a formal application for listing in the form set out in Form J in Appendix 5, signed by a duly authorised director of the issuer;
              (2) a declaration in the form set out in Form K in Appendix 5, signed by every director and supervisor (if any) of the issuer confirming and declaring compliance with all the requirements for a transfer of listing (save those disapplied under rule 9A.03)
              (3) a checklist prescribed by the Exchange from time to time duly completed and signed by every director and supervisor (if any) of the issuer;
              (4) an advanced draft public announcement, as required under rule 9A.08, to be published by the issuer in relation to the transfer of listing;
              (5) the initial listing fee payable under rule 9.03(1)(b) and paragraph 1(3) of Appendix 8;
              (6) the declaration and undertaking set out in rule 9.11(38) duly signed by each director/ supervisor and proposed director/supervisor;
              (7) where shareholders', board or regulatory approval is required for the transfer of listing (whether under the issuer's constitutive documents or applicable laws or regulations or otherwise), a copy of the relevant approval(s) or resolutions; and
              (8) a written confirmation, together with relevant supporting information, to the Exchange that, for the next 12 months from the date of publication of the announcement under rule 9A.08:
              (a) the working capital available for the group is sufficient for its present requirements, that is for at least the next 12 months from the date of publication of the announcement under rule 9A.08; and

              Note: In the case of a Mineral Company, it has available working capital to meet 125% of the group's working capital needs for at least the next 12 months, under Listing Rules 18.03(4) and 18.03(5).
              (b) the issuer's financial advisers or auditors are satisfied that this confirmation has been given after due and careful enquiry and that persons or institutions providing finance have stated in writing that the relevant financing facilities exist.

              Note: Supporting information for the purpose of rule 9A.06(8) typically includes cashflow forecast memoranda, profit forecasts and written statements from persons or institutions providing finance.

            • 9A.07

              An application for transfer from GEM to the Main Board will not be presented to the Listing Committee for approval until all the documents and fees required under rule 9A.06 have been duly received by the Exchange.

          • Announcement of transfer

            • 9A.08

              An announcement must be made in accordance with rule 2.07C as soon as reasonably practicable and in any event not later than one business day after the issuer has received from the Exchange formal in-principle approval for transfer of its listing to the Main Board and at least 5 clear business days before the intended date dealings in the issuer's shares on the Main Board are expected to commence.

            • 9A.09

              The announcement published under rule 9A.08 must contain at least the following information:—

              (1) on the front cover or on the top of the announcement a prominent and legible disclaimer statement as follows:—

              "Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.";
              (2) a statement of responsibility and confirmation on the part of the directors in the form set out in paragraph 2 of Appendix 1, Part A (where the issuer is to be listed under Chapter 21, the statement of responsibility must also be given by the persons set out in Exchange Listing Rule 21.10);
              (3) a statement confirming that all pre-conditions for a transfer of listing, from GEM to the Main Board have, insofar as applicable, been fulfilled in relation to the issuer and the securities of the issuer;
              (4) the reasons for the transfer of listing;
              (5) a statement that the following documents are available for viewing on the Exchange's website and the issuer's own website, giving details as to where on these websites such documents are to be found (to the fullest extent known at the time of publication of the announcement):—
              (a) the issuer's published directors' report and annual accounts for the latest financial year,
              (b) the issuer's latest half-year report or summary half-year report (if any) and (if more recent) the latest quarterly report,
              (c) the issuer's constitutional documents;
              (d) any prospectuses and circulars to shareholders issued by the issuer in the immediately preceding full financial year (if any); and
              (e) announcements and other corporate communications as required under the Exchange Listing Rules
              (6) a statement that approval has been granted by the Exchange for the issuer's securities to be listed on the Main Board and de-listed from GEM, together with the date on which dealings will commence on the Main Board and terminate on GEM;
              (7) the issuer's respective stock codes on the Main Board and GEM;
              (8) a statement that subject to continued compliance with the stock admission requirements of HKSCC, the relevant securities will continue to be accepted as eligible securities by HKSCC for deposit, clearance and settlement in the Central Clearing and Settlement System ("CCASS") once dealings in the relevant securities on the Main Board commence, and that all activities under CCASS are subject to the General Rules of the CCASS and CCASS Operational Procedures in effect from time to time;
              (9) if applicable, a statement that the listing of any options, warrants or similar rights or convertible equity securities issued by the issuer will also be transferred to the Main Board pursuant to rule 9A.10, accompanied by information on the nature of the shares offered by way of conversion, exchange or subscription, the rights attaching thereto, the conditions of and procedures for conversion, exchange or subscription and details of the circumstances in which they may be amended;
              (10) if applicable, the information required under rule 8.10(1) and (2) to be disclosed in a listing document, in relation to any competing or potentially competing business of a controlling shareholder or director of the applicant;
              (11) the name of each director of the issuer as required under rule 2.14; and
              (12) such other information as directed by the Exchange to be included in the announcement.

          • Effect of transfer

            • 9A.10

              Upon successful transfer of listing of an issuer's equity securities from GEM to the Main Board, the listing on GEM of any options, warrants or similar rights or convertible equity securities in the same issuer will normally be automatically transferred to the Main Board.

            • 9A.11

              An application for a transfer of listing must normally relate to all classes of securities (if more than one) already listed on GEM, including all further securities of the relevant classes issued or proposed to be issued.

            • 9A.12

              Unless otherwise directed by the Exchange, an issuer that successfully transfers from GEM to the Main Board under this Chapter need not re-comply with the continuing obligations under Chapter 3, 3A, 4, 13, 14, 14A or 17 to the extent:—

              (1) of any continuing obligation under an Exchange Listing Rule which is equivalent or comparable to a continuing obligation under a GEM Listing Rule, where the Exchange has previously granted a waiver to the issuer in respect of such obligation and there has been no change in the relevant facts or circumstances; or
              (2) that any such obligation has ceased by virtue of shareholders' approvals or independent shareholders' approvals (as applicable) having been obtained by the issuer while it was listed on GEM for the relevant transaction(s) or corporate activity(ies).

              The effect of the waivers or shareholders' approvals shall continue for the purpose of continuing obligations until its original expiry date since grant, notwithstanding the transfer from GEM to the Main Board.

            • 9A.13

              The continuous requirement relating to the appointment of a Compliance Adviser for the period specified in GEM rule 6A.19 will survive an issuer's transfer to the Main Board. Where the transfer takes effect before the expiry of the requirement under GEM rule 6A.19, this GEM requirement will continue for any remaining term notwithstanding that the issuer had been transferred to and listed on the Main Board. The requirement under rule 3A.19 is not applicable in the case of a listed issuer transferring from GEM to the Main Board.

        • Chapter 10 Restrictions on Purchase and Subscription

          • Restrictions on Preferential Treatment of Purchase and Subscription Applications

            • 10.01

              Normally no more than ten per cent. of any securities being marketed for which listing is sought may be offered to employees or past employees of the issuer or its subsidiaries or associated companies and their respective dependants or any trust, provident fund or pension scheme for the benefit of such persons on a preferential basis (including selection under a placing in accordance with the placing guidelines set out in Appendix 6). Any preferential treatment must be approved by the Exchange prior to the marketing and the issuer concerned may be called upon to supply particulars of such employees, past-employees and their respective dependants and the objects, beneficiaries or members of any trust, provident fund or pension scheme as well as the results of subscription by employees, past-employees, their respective dependants and any trust, provident fund or pension scheme for the benefit of such persons. The issuer must maintain records of such particulars for a period of not less than 12 months from the date of approval and make the same available for inspection by the Exchange during the said period.

            • 10.02

              The applications for securities offered under any preferential treatment scheme must be made on separate forms supplied by the issuer for this purpose in order to distinguish them from other applications.

          • Restrictions on Directors' Purchase and Subscription

            • 10.03

              Directors of the issuer and their close associates may only subscribe for or purchase any securities for which listing is sought which are being marketed by or on behalf of a new applicant, whether in their own names or through nominees if the following conditions are met:—

              (1) that no securities are offered to them on a preferential basis and no preferential treatment is given to them in the allocation of the securities; and
              (2) that the minimum prescribed percentage of public shareholders required by rule 8.08(1) is achieved.

          • Restrictions on Existing Shareholders' Purchase and Subscription

            • 10.04

              A person who is an existing shareholder of the issuer may only subscribe for or purchase any securities for which listing is sought which are being marketed by or on behalf of a new applicant either in his or its own name or through nominees if the conditions in rules 10.03(1) and (2) are fulfilled.

          • Restrictions and Notification Requirements on Issuers Purchasing their own Shares on a Stock Exchange

            • 10.05

              Subject to the provisions of the Code on Share Buy-backs, an issuer may purchase its shares on the Exchange or on another stock exchange recognised for this purpose by the Commission and the Exchange. All such purchases must be made in accordance with rule 10.06. Rules 10.06(1), 10.06(2)(f) and 10.06(3) apply only to issuers whose primary listing is on the Exchange while the rest of 10.06(2) and rules 10.06(4), (5) and (6) apply to all issuers. The Code on Share Buy-backs must be complied with by an issuer and its directors and any breach thereof by an issuer will be a deemed breach of the Exchange Listing Rules and the Exchange may in its absolute discretion take such action to penalise any breach of this paragraph or the listing agreement as it shall think appropriate. It is for the issuer to satisfy itself that a proposed purchase of shares does not contravene the Code on Share Buy-backs.

            • 10.06

              (1)
              (a) An issuer whose primary listing is on the Exchange may only purchase shares on the Exchange, either directly or indirectly, if:—
              (i) the shares proposed to be purchased by the issuer are fully-paid up;
              (ii) the issuer has previously sent to its shareholders an Explanatory Statement complying with the provisions of rule 10.06(1)(b); and
              (iii) its shareholders have given a specific approval or a general mandate to its directors to make the purchase(s), by way of an ordinary resolution which complies with rule 10.06(1)(c) and which has been passed at a General Meeting of the issuer duly convened and held;
              (b) the issuer must send to its shareholders an Explanatory Statement (at the same time as the notice of the relevant shareholders' meeting) containing all the information reasonably necessary to enable those shareholders to make an informed decision on whether to vote for or against the ordinary resolution to approve the purchase by the issuer of shares including the information set out below:—
              (i) a statement of the total number and description of the shares which the issuer proposes to purchase;
              (ii) a statement by the directors of the reasons for the proposed purchase of shares;
              (iii) a statement by the directors as to the proposed source of funds for making the proposed purchase, which shall be funds legally available for such purposes in accordance with the issuer's constitutive documents and the laws of the jurisdiction in which the issuer is incorporated or otherwise established;
              (iv) a statement as to any material adverse impact on the working capital or gearing position of the issuer (as compared with the position disclosed in its most recent published audited accounts) in the event that the proposed purchases were to be carried out in full at any time during the proposed purchase period, or an appropriate negative statement;
              (v) a statement of the name of any directors, and to the best of the knowledge of the directors having made all reasonable enquiries, any close associates of the directors, who have a present intention, in the event that the proposal is approved by shareholders, to sell shares to the issuer, or an appropriate negative statement;
              (vi) a statement that the directors have undertaken to the Exchange to exercise the power of the issuer to make purchases pursuant to the proposed resolution in accordance with the Exchange Listing Rules and the laws of the jurisdiction in which the issuer is incorporated or otherwise established;
              (vii) a statement as to the consequences of any purchases which will arise under the Takeovers Code of which the directors are aware, if any;
              (viii) a statement giving details of any purchases by the issuer of shares made in the previous six months (whether on the Exchange or otherwise), giving the date of each purchase and the purchase price per share or the highest and lowest prices paid for such purchases, where relevant;
              (ix) a statement as to whether or not any core connected persons of the issuer have notified the issuer that they have a present intention to sell shares to the issuer or have undertaken not to sell any of the shares held by them to the issuer, in the event that the issuer is authorised to make purchases of shares;
              (x) a statement giving the highest and lowest prices at which the relevant shares have traded on the Exchange during each of the previous twelve months; and
              (xi) a statement on the front page as follows:

              "Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this document, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss however arising from or in reliance upon the whole or any part of the contents of this document."
              At the same time as the Explanatory Statement is sent to shareholders of the issuer, the issuer should submit to the Exchange (a) a confirmation from the issuer that the Explanatory Statement contains the information required under this rule 10.06(1)(b) and that neither the Explanatory Statement nor the proposed share repurchase has unusual features; and (b) the undertaking from its directors to the Exchange according to rule 10.06(1)(b)(vi);
              (c) the ordinary resolution proposed to shareholders to give the directors of the issuer a specific approval or general mandate to purchase shares must include the following:—
              (i) the total number and description of the shares which the issuer is authorised to purchase, provided that the number of shares which the issuer is authorised to purchase on the Exchange or on another stock exchange recognised for this purpose by the Commission and the Exchange under the Code on Share Buy-backs, may not exceed 10 per cent. of the number of issued shares of the issuer and the total number of warrants to subscribe for or purchase shares (or other relevant class of securities) authorised to be so purchased may not exceed 10 per cent. of the warrants of the issuer (or such other relevant class of securities, as the case may be), in each case as at the date of the resolution granting the general mandate; and

              Note: If the issuer conducts a share consolidation or subdivision after the repurchase mandate has been approved in general meeting, the maximum number of shares that may be repurchased under the mandate as a percentage of the total number of issued shares at the date immediately before and after such consolidation or subdivision shall be the same.
              (ii) the dates on which the authority conferred by the resolution will commence and determine. Such authority may only continue in force until:—
              (A) the conclusion of the first annual general meeting of the issuer following the passing of the resolution at which time it shall lapse unless, by ordinary resolution passed at that meeting, the authority is renewed, either unconditionally or subject to conditions; or
              (B) revoked or varied by ordinary resolution of the shareholders in general meeting,
              whichever occurs first; and
              (d) the issuer must report the outcome of the General Meeting called to consider the proposed purchases to the Exchange immediately following the meeting.
              (2) Dealing Restrictions
              (a) An issuer shall not purchase its shares on the Exchange if the purchase price is higher by 5% or more than the average closing market price for the 5 preceding trading days on which its shares were traded on the Exchange;
              (b) an issuer shall not purchase its shares on the Exchange for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Exchange from time to time;
              (c) an issuer shall not knowingly purchase its shares from a core connected person and a core connected person shall not knowingly sell shares to the issuer, on the Exchange;
              (d) an issuer shall procure that any broker appointed by the issuer to effect the purchase of its shares shall disclose to the Exchange such information with respect to purchases made on behalf of the issuer as the Exchange may request;
              (e) an issuer shall not purchase its shares on the Exchange at any time after inside information has come to its knowledge until the information is made publicly available. In particular, during the period of one month immediately preceding the earlier of:
              (i) the date of the board meeting (as such date is first notified to the Exchange in accordance with the Listing Rules) for the approval of the issuer's results for any year, half-year, quarterly or any other interim period (whether or not required under the Listing Rules); and
              (ii) the deadline for the issuer to announce its results for any year or half-year under the Listing Rules, or quarterly or any other interim period (whether or not required under the Listing Rules),
              and ending on the date of the results announcement, the issuer may not purchase its shares on the Exchange, unless the circumstances are exceptional;
              (f) an issuer whose primary listing is on the Exchange may not purchase its shares on the Exchange if that purchase would result in the number of listed securities which are in the hands of the public falling below the relevant prescribed minimum percentage for that issuer (as determined by the Exchange at the time of listing under rule 8.08); and
              (g) the Exchange may waive all or part of the above restrictions if, in the opinion of the Exchange, there are exceptional circumstances (such as, but without limitation, political or economic events having a material adverse effect on the price of shares of the issuer or issuers listed on the Exchange generally) justifying the waiver of such restrictions. A waiver may be granted either with respect to a fixed amount of securities of an issuer or generally or on such conditions as the Exchange shall specify and may be expressed to continue for a stated period of time or until further notice.
              (3) Subsequent Issues

              An issuer whose primary listing is on the Exchange may not make a new issue of shares or announce a proposed new issue of shares for a period of 30 days after any purchase by it of shares, whether on the Exchange or otherwise (other than an issue of securities pursuant to the exercise of warrants, share options or similar instruments requiring the issuer to issue securities, which were outstanding prior to that purchase of its own securities), without the prior approval of the Exchange.
              (4) Reporting Requirements

              An issuer shall:—
              (a) submit for publication to the Exchange through HKEx-EPS not later than 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the business day following any day on which the issuer makes a purchase of shares (whether on the Exchange or otherwise), the total number of shares purchased by the issuer the previous day, the purchase price per share or the highest and lowest prices paid for such purchases, where relevant, and shall confirm that those purchases which were made on the Exchange were made in accordance with the Exchange Listing Rules and if the issuer's primary listing is on the Exchange, that there have been no material changes to the particulars contained in the Explanatory Statement. In respect of purchases made on another stock exchange, the issuer's report must confirm that those purchases were made in accordance with the domestic rules applying to purchases on that other stock exchange. Such reports shall be made on a return in such form and containing such information as the Exchange may from time to time prescribe. In the event that no shares are purchased on any particular day then no return need be made to the Exchange. The issuer should make arrangements with its brokers to ensure that they provide to the issuer in a timely fashion the necessary information to enable the issuer to make the report to the Exchange; and
              (b) include in its annual report and accounts a monthly breakdown of purchases of shares made during the financial year under review showing the number of shares purchased each month (whether on the Exchange or otherwise) and the purchase price per share or the highest and lowest price paid for all such purchases, where relevant, and the aggregate price paid by the issuer for such purchases. The directors' report shall contain reference to the purchases made during the year and the directors reasons for making such purchases.
              (5) Status of Purchased shares

              The listing of all shares which are purchased by an issuer (whether on the Exchange or otherwise) shall be automatically cancelled upon purchase and the issuer must apply for listing of any further issues of that type of shares in the normal way. The issuer shall ensure that the documents of title of purchased shares are cancelled and destroyed as soon as reasonably practicable following settlement of any such purchase.
              (6) General
              (a) The Exchange reserves the right to prohibit an issuer from making purchases of shares on the Exchange (even if that issuer's primary listing is on another stock exchange) if the Exchange considers that the issuer has committed a breach of any of the Exchange Listing Rules which apply to that issuer. In the event that the Exchange does so prohibit such purchases no Exchange Participant will carry out any such purchases on behalf of the issuer until such prohibition is lifted;
              (b) the Authorised Representatives of the issuer shall respond promptly to any request for information that the Exchange may address to the issuer concerning the purchase of shares, at any time; and
              (c) for the purposes of rules 10.05, 10.06, 19.16 and 19.43 "shares" shall mean shares of all classes and securities which carry a right to subscribe or purchase shares, of the issuer provided that the Exchange may waive the requirements of those rules in respect of any fixed participation shares which are, in the opinion of the Exchange, more analogous to debt securities than equity securities. References to purchases of shares include purchases by agents or nominees on behalf of the issuer or subsidiary of the issuer, as the case may be.

          • Restrictions on disposal of shares by controlling shareholders following a new listing

            • 10.07

              (1) A person or group of persons shown by the listing document issued at the time of the issuer's application for listing to be controlling shareholders of the issuer shall not and shall procure that the relevant registered holder(s) shall not:—
              (a) in the period commencing on the date by reference to which disclosure of the shareholding of the controlling shareholders is made in the listing document and ending on the date which is 6 months from the date on which dealings in the securities of a new applicant commence on the Exchange, dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights, interests or encumbrances in respect of, any of those securities of the issuer in respect of which he is or they are shown by that listing document to be the beneficial owner(s); or
              (b) in the period of 6 months commencing on the date on which the period referred to in rule 10.07(1)(a) expires, dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights, interests or encumbrances in respect of, any of the securities referred to in rule 10.07(1) (a) if, immediately following such disposal or upon the exercise or enforcement of such options, rights, interests or encumbrances, that person or group of persons would cease to be a controlling shareholder.
              Any offer for sale contained in a listing document shall not be subject to such restrictions.
              (2) For the purpose of this rule, a person is treated as the beneficial owner of securities if he has the ultimate beneficial ownership or control of the securities, whether through a chain of companies or otherwise.

              Note:
              (1) Controlling shareholder(s) is/are free to purchase additional securities and dispose of securities thus purchased in the relevant period, subject to compliance with the requirements of rule 8.08 to maintain an open market in the securities and a sufficient public float.
              (2) Nothing in this rule shall prevent a controlling shareholder from using securities of the issuer beneficially owned by him as security (including a charge or a pledge) in favour of an authorised institution (as defined in the Banking Ordinance) for a bona fide commercial loan.
              (3) Controlling shareholder(s) of a new applicant must undertake to the issuer and the Exchange that, within the period commencing on the date by reference to which disclosure of the shareholding of the controlling shareholder(s) is made in the listing document and ending on the date which is 12 months from the date on which dealings in the securities of a new applicant commence on the Exchange, he/they will:—
              (i) when he/they pledge(s)/charge(s) any securities beneficially owned by him/them in favour of an authorised institution pursuant to Note (2) to rule 10.07(2), immediately inform the issuer of such pledge/charge together with the number of securities so pledged/charged; and
              (ii) when he/they receive(s) indications, either verbal or written, from the pledgee/chargee that any of the pledged/charged securities will be disposed of, immediately inform the issuer of such indications.
              The issuer must inform the Exchange as soon as it has been informed of matters referred to in rule 10.07 (2) Note 3 (i) and (ii) by a controlling shareholder and disclose such matters by way of an announcement which is published in accordance with rule 2.07C as soon as possible.
              (3) Any share lending arrangement entered into by a controlling shareholder pursuant to an agreement in relation to the public offering of equity securities to facilitate settlement of over-allocations shall not be subject to the restrictions of rule 10.07(1) provided the following requirements are complied with:
              (a) the share lending arrangement is fully described in the initial listing public offering document and must be for the sole purpose of covering any short position prior to the exercise of the underwriter's over-allotment option in the initial public offering placing;
              (b) the maximum number of shares to be borrowed from the controlling shareholder by the underwriter is the maximum number of shares that may be issued upon full exercise of the over-allotment option;
              (c) the same number of shares so borrowed is returned to the controlling shareholder or its nominee (as the case may be) within 3 business days after the last day on which the over-allotment option may be exercised or, if earlier, the date on which the over-allotment option is exercised in full;
              (d) borrowing of shares pursuant to the share lending arrangement will be effected in compliance with applicable listing rules, laws and other regulatory requirements; and
              (e) no payments will be made to the controlling shareholder by the underwriter in relation to the share lending arrangement.
              (4) The provisions of 10.07(1)(a) and (b) shall not apply to an issuer that has successfully transferred its listing from GEM to the Main Board pursuant to Chapter 9A.

          • No further issues of securities within 6 months of listing

            • 10.08

              No further shares or securities convertible into equity securities of a listed issuer (whether or not of a class already listed) may be issued or form the subject of any agreement to such an issue within 6 months from the date on which securities of the listed issuer first commence dealing on the Exchange (whether or not such issue of shares or securities will be completed within 6 months from the commencement of dealing), except for:

              (1) the issue of shares, the listing of which has been approved by the Exchange, pursuant to a share option scheme under Chapter 17;
              (2) the exercise of conversion rights attaching to warrants issued as part of the initial public offering;
              (3) any capitalisation issue, capital reduction or consolidation or sub-division of shares;
              (4) the issue of shares or securities pursuant to an agreement entered into before the commencement of dealing, the material terms of which have been disclosed in the listing document issued in connection with the initial public offering; and
              (5) the issue of shares or securities to be traded on the Main Board by a listed issuer that has successfully transferred its listing from GEM to the Main Board pursuant to Chapter 9A.

          • Restrictions on multiple applications

            • 10.09

              (1) Where securities are offered to the public for subscription or purchase, issuers, their directors, sponsors and underwriters must take reasonable steps to ensure that multiple or suspected multiple applications are identified and rejected.
              (2) In this rule "multiple applications" means circumstances where more than one application is made by the same person; where a person applies for more than 100% of the securities on offer or where a person applies for more than 100% of the shares available in any pool into which the securities on offer are divided in accordance with Practice Note 18. For the purpose of these rules the shares available in any pool is the initial allocation of shares into the pool prior to the operation of any clawback mechanism required by Practice Note 18.
              (3) Issuers, their directors, sponsors and underwriters must ensure that it is a term and condition of the offer of the securities (disclosed as such in the listing document and the relevant application form) that by completing and delivering an application form, each applicant warrants that:—
              (i) (if the application is made for his own benefit) no other application is being made for his benefit by him or by anyone applying as his agent or by any other person;
              (ii) (if the application is made by him as agent for the benefit of another person) no other application is being made by him as agent for or for the benefit of that person or by that person or by any other person as agent for that person;
              (iii) if he signs the application form as agent for someone else, he has due authority to do so on behalf of that other person.
              The application form shall include a warning as follows:—

              "Warning:—

              Only one application may be made for the benefit of any person."

              and a declaration and representation as follows:—

              "I/we hereby declare that this is the only application made and the only application intended by me/us to be made, to benefit me/us or the person for whose benefit I am/we are applying. I/we understand that this declaration/representation will be relied upon by the issuer in deciding whether or not to make any allotment of shares in response to this application."

              The application form shall also contain a stipulation to the effect that an application made by an unlisted company which does not carry on any business other than dealing in shares and in respect of which a person exercises statutory control shall be deemed to be an application made for the benefit of that person.

              Note: For the purpose of rule 10.09 (1), having taken reasonable steps as required by that rule, issuers, their directors, sponsors and underwriters will be entitled to rely on the declaration/representations made by an applicant.

        • Chapter 11 Listing Documents

          • Preliminary

            • 11.01

              This Chapter sets out the Exchange's requirements for the contents of listing documents relating to equity securities. Issuers are reminded that a listing document which is a prospectus within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance must also comply with and be registered in accordance with the Companies (Winding Up and Miscellaneous Provisions) Ordinance. Applicants should note that they are required to confirm in their application that all requisite information has been included in the listing document or will be included before the final version is submitted for review (see Form C1 of Appendix 5).

            • 11.02

              New applicants are reminded that the final proof of the listing document must be lodged with the Exchange at least four clear business days before the date of hearing of the application for listing (see rule 9.11(18)) and that no material amendment to the final proof listing document will be allowed without the consent of the Exchange.

            • 11.02A

              The Exchange shall be authorised by new applicants and listed issuers to file their "applications" (as defined in section 2 of the Statutory Rules) and those corporate disclosure materials within the meaning of sections 7(1) and (2) of the Statutory Rules received by the Exchange with the Commission pursuant to sections 5(2) and 7(3) of the Statutory Rules respectively and new applicants and listed issuers shall be deemed to have agreed to the above by filing such applications and corporate disclosure materials with the Exchange. The authorisation aforementioned shall not be altered or revoked in any way unless prior written approval has been obtained from the Exchange and the Exchange shall have the absolute discretion to grant such approval. In addition, the Exchange may require and new applicants and listed issuers shall execute such documents in favour of the Exchange perfecting the above authorisation as the Exchange may require. Applications and relevant corporate disclosure materials shall be filed with the Exchange in such manner and number of copies as the Exchange may from time to time prescribe.

          • Definition

            • 11.03

              A listing document is defined in rule 1.01 as a prospectus, a circular and any equivalent document (including a scheme of arrangement and introduction document) issued or proposed to be issued in connection with an application of listing. Issuers are recommended to consult the Exchange at the earliest opportunity if they are in any doubt as to whether a particular document constitutes a listing document as so defined.

          • When Required

            • 11.04

              The methods of listing required by these Exchange Listing Rules to be supported by a listing document are:—

              (1) offers for subscription;
              (2) offers for sale;
              (3) placings by or on behalf of a new applicant or by or on behalf of a listed issuer of securities of a class new to listing;
              (4) introductions;
              (5) rights issues;
              (6) open offers;
              (7) capitalisation issues (including the bonus issue of warrants);
              (8) an exchange or a substitution of securities; and
              (9) any deemed new listing under the Exchange Listing Rules.

            • 11.05

              Other methods of listing are not required by these Exchange Listing Rules to be supported by a listing document, but if a listing document is otherwise required or issued, it must comply with the relevant requirements of this Chapter.

          • Contents

            • 11.06

              Subject to rule 11.09, listing documents must contain all of the specific items of information which are set out in either Part A, B, E or F of Appendix 1 (as the case may be). In those cases where listing is sought for securities of an issuer no part of whose share capital is already listed the items of information specified in Part A or E (as the case may be) must be included; in those cases where listing is sought for securities of an issuer some part of whose share capital is already listed the items of information specified in Part B or F (as the case may be) must be included.

            • 11.07

              In addition to these detailed requirements all listing documents issued by a new applicant (otherwise than on an introduction in the circumstances set out in rule 7.14(3)) or by a listed issuer (otherwise than in connection with a capitalisation issue, including a bonus issue of warrants, or an exchange or substitution of securities) must, as an overriding principle, contain such particulars and information which, according to the particular nature of the issuer and the securities for which listing is sought, is necessary to enable an investor to make an informed assessment of the activities, assets and liabilities, financial position, management and prospects of the issuer and of its profits and losses and of the rights attaching to such securities.

            • 11.08

              Special requirements for listing documents issued by mineral companies, overseas issuers, PRC issuers and investment companies are set out in Chapters 18, 19, 19A and 21.

            • 11.09

              The following items of information may be omitted in the following specific cases:—

              (1) rights issues The following paragraphs of Part B of Appendix 1 : 8, 24, 26(1), 26(3), 26(4), 26(5), 37 and 43(4)

              The following paragraphs of Part F of Appendix 1: 8, 20, 22(1), 22(3), 22(4), 22(5), 33, 66(4)
              (2) open offers As for rights issues
              (3) capitalisation issues The following paragraphs of Part B of Appendix 1 : 2 to 5, 6(2) and (3), 7, 8, 11, 12, 13, 15, 18 to 20, 22 to 43

              The following paragraphs of Part F of Appendix 1: 2 to 5, 6(2) and (3), 7, 8, 39, 40, 41, 43, 46 to 48, 18 to 36, 64 to 66.
              (4) exchange or substitution As for capitalisation issues
              (5) bonus issues of warrants The following paragraphs of Part B of Appendix 1 : 2 to 5, 6(2) and (3), 7, 8, 11, 12, 13, 15, 18, 19, 22 to 43

              The following paragraphs of Part F of Appendix 1: 2 to 5, 6(2) and (3), 7, 8, 39, 40, 41, 43, 46, 47, 18 to 36, 64 to 66.
              (6) Placings by or on behalf of a listed issuer of securities of a class already listed where a prospectus or other listing documents is otherwise required or issued As for rights issues
              (7) Listing documents supporting an introduction in the circumstances set out in rule 7.14(3) where the consolidated assets and liabilities of the issuer are substantially the same as the consolidated assets and liabilities of the listed issuer or issuers whose securities have been exchanged The following paragraphs of Part A of Appendix 1 : 8(1), 21, 33, 35 and 37, provided that the information required by paragraph 31(3) of Part B of Appendix 1 is included.

              The following paragraphs of Part E of Appendix 1: 8(1), 55, 33, 35 and 37, provided that the information required by paragraph 27(3) of Part F of Appendix 1 is included.

              Note: see also rules 19.05(6) and 19.10(5).

            • 11.10

              Negative statements are required only where so indicated in Appendix 1.

            • 11.11

              The Exchange may require disclosure of such additional or alternative items of information as it considers appropriate in any particular case. Conversely, it may be prepared to permit the omission or modification of items of information to suit the circumstances of a particular case. Consequently, issuers are encouraged to seek informal and confidential guidance from the Exchange at the earliest opportunity.

          • Responsibility

            • 11.12

              Issuers are reminded that each of their directors, including any proposed director who is named as such in the listing document, is required to accept responsibility for the information which the listing document contains and that a statement to that effect is required to be incorporated in the listing document except where this requirement is excluded by virtue of rule 11.09.

          • Subsequent Events

            • 11.13

              If at any time after the issue of the listing document or a supplementary listing document as provided for by this rule and before the commencement of dealings in any securities, the issuer becomes aware that:—

              (1) there has been a significant change affecting any matter contained in the listing document; or
              (2) a significant new matter has arisen, the inclusion of information in respect of which would have been required to be in the listing document if it had arisen before the listing document was issued,

              the issuer shall, as soon as practicable, submit to the Exchange for its review and, once the Exchange has confirmed that it has no further comments thereon, issue a supplementary listing document giving details of the change or new matter, unless the Exchange agrees otherwise.

              For this purpose "significant" means significant for the purpose of making an informed assessment of the matters mentioned in rule 11.07 above.

          • Language

            • 11.14

              Every listing document must be in the English language and be accompanied by a Chinese translation except that, in the case of a new applicant, the English language version of the listing document may be distributed separately from its Chinese translation (and vice-versa) provided that both are available at each place where, and for so long as, the distribution of such documents takes place.

          • Illustrations

            • 11.15

              A listing document may include illustrations of a pictorial or graphic nature provided that such illustrations are not misleading or likely to mislead in the form and context in which they are included.

          • Profit Forecasts

            • 11.16

              A listing document (other than one supporting a capitalisation issue) must not contain reference (general or particular) to future profits or contain dividend forecasts based on an assumed future level of profits unless supported by a formal profit forecast. Dividend forecasts not based on assumed future profits are not subject to this rule.

            • 11.17

              The issuer must determine in advance, with its financial adviser or sponsor in the case of a new applicant, whether to include a profit forecast in a listing document. As required by paragraph 34(2) of Part A, paragraph 34(2) of Part E, and paragraph 29(2) of Part B and paragraph 25(2) of Part F of Appendix 1, where a profit forecast appears in any listing document (other than one supporting a capitalisation issue), it must be clear, unambiguous and presented in an explicit manner and the principal assumptions, including commercial assumptions, upon which it is based, must be stated and such profit forecast must be prepared on a basis that is consistent with the accounting policies normally adopted by the issuer. The accounting policies and calculations for the forecast must be reviewed and reported on by the reporting accountants and their report must be set out. The financial adviser or sponsor must report in addition that they have satisfied themselves that the forecast has been made by the directors after due and careful enquiry, and such report must be set out.

              A "profit forecast" for this purpose means any forecast of profits or losses, however worded, and includes any statement which explicitly or implicitly quantifies the anticipated level of future profits or losses, either expressly or by reference to previous profits or losses or any other benchmark or point of reference. It also includes any profit estimate, being any estimate of profits or losses for a financial period which has expired but for which the results have not yet been audited or published. Any valuation of assets (except for property interests (as defined in rule 5.01(3)) or businesses acquired by an issuer based on discounted cash flows or projections of profits, earnings or cash flows is regarded as a profit forecast.

            • 11.18

              A profit forecast appearing in a listing document (other than one supporting a capitalisation issue) should normally cover a period which is coterminous with the issuer's financial year-end. If, exceptionally the profit forecast period ends at a half year-end the Exchange will require an undertaking from the issuer that the interim report for that half year will be audited. Profit forecast periods not ending on the financial year end or half year-end will not be permitted.

            • 11.19

              The assumptions upon which any profit forecast appearing in a listing document (other than one supporting a capitalisation issue) are based must provide useful information to investors to help them in forming a view as to the reasonableness and reliability of the forecast. Such assumptions should draw the investors' attention to, and where possible quantify, those uncertain factors which could materially disturb the ultimate achievement of the forecast. The assumptions should be specific rather than general, definite rather than vague. All embracing assumptions and those relating to the general accuracy of the estimates made in the profit forecast should be avoided. Furthermore it will not normally be acceptable for assumptions to relate to matters which the directors, by virtue of their particular knowledge and experience in the business, are best able to take a view on or are able to exercise control over since such matters should be reflected directly in the profit forecast itself.

          • Disclaimer

            • 11.20

              All listing documents must contain on the front cover or inside front cover of the listing document a prominent and legible disclaimer statement as follows:—

              "Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this document, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this document."

        • Chapter 11A Prospectuses

          • Preliminary

            • 11A.01

              Issuers are reminded that a listing document which is a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance must both comply with the Exchange Listing Rules and, where required, comply with and be registered in accordance with the Companies (Winding Up and Miscellaneous Provisions) Ordinance. The Exchange Listing Rules are entirely independent of and without prejudice to the provisions of the Companies (Winding Up and Miscellaneous Provisions) Ordinance relating to prospectuses. Accordingly, compliance with the Exchange Listing Rules does not guarantee compliance with the Companies (Winding Up and Miscellaneous Provisions) Ordinance nor does it guarantee that such prospectus will be authorised by the Exchange for registration by the Registrar of Companies.

            • 11A.02

              This Chapter discusses the Exchange's role in respect of its authorisation of a prospectus for registration by the Registrar of Companies and sets out some procedural requirements which must be complied with in respect of a prospectus which is to be authorised by the Exchange.

          • Transfer of Functions

            • 11A.03

              The Commission's functions under sections 38B(2A) (b), 38D(3) and (5) and 342C(3) and (5) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, to the extent that they relate to any prospectus which is concerned with any shares or debentures of a company that have been approved for listing on the Exchange, and the power to charge and retain the fees which would have been payable to the Commission in respect of any such prospectus under the Commission's fees rules, have been transferred to the Exchange by order of the Chief Executive in Council pursuant to section 25 of the Securities and Futures Ordinance (the "Transfer Order").

            • 11A.04

              Under the terms of the Transfer Order the Exchange shall vet every prospectus which relates to shares and debentures which have been approved for listing on the Exchange and shall have the authority to authorise the registration of such a prospectus by the Registrar of Companies under the provisions of the Companies (Winding Up and Miscellaneous Provisions) Ordinance.

          • Compliance with Companies (Winding Up and Miscellaneous Provisions) Ordinance

            • 11A.05

              To ensure compliance, issuers are urged to seek advice from their legal advisers. Issuers are reminded that compliance with the Companies (Winding Up and Miscellaneous Provisions) Ordinance remains their primary responsibility and that they will not be absolved from any liability by virtue only of the submission of a prospectus to the Exchange for vetting or the issue by the Exchange of a certificate authorising registration.

          • Certificates of Exemption

            • 11A.06

              The Commission's power to grant certificates of exemption under the Companies (Winding Up and Miscellaneous Provisions) Ordinance has not been transferred to the Exchange.

          • Abridged prospectuses

            • 11A.07

              The Commission's powers under section 38B(2A)(b) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance to authorise in any particular case the form and manner of publication of any extract from or abridged version of a prospectus, have been transferred to the Exchange in so far as they relate to shares or debentures which have been approved for listing on the Exchange.

          • Procedural Requirements

            • 11A.08

              If the Exchange is satisfied that the prospectus delivered to it pursuant to rule 9.11(33) or 9.22(2) should be authorised for registration pursuant to the Companies (Winding Up and Miscellaneous Provisions) Ordinance, it will issue a certificate under section 38D(5) or section 342C(5) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (as the case may be). It is the responsibility of the issuer to deliver the prospectus and any ancillary documents to the Companies Registry for registration pursuant to section 38D(7) or section 342C(7) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (as the case may be).

            • 11A.09

              Every listed issuer must notify the Exchange at least 14 days in advance of the date on which it is proposed to register a prospectus. The Exchange may promulgate from time to time procedures to be followed in the submission of prospectuses for vetting.

            • 11A.10

              The Exchange will review a prospectus for compliance with the Exchange Listing Rules concurrently with the review of the prospectus for compliance with the relevant provisions of the Companies (Winding Up and Miscellaneous Provisions) Ordinance. The Exchange will not authorise a prospectus for registration by the Registrar of Companies until it is satisfied that it has no further comments on such prospectus in respect of the Companies (Winding Up and Miscellaneous Provisions) Ordinance requirements and is prepared to grant a listing for the securities to which such prospectus relates.

              Note: The issue of the certificate of authorisation by the Exchange does not constitute a form of confirmation that the prospectus complies with the requirements of the Companies (Winding Up and Miscellaneous Provisions) Ordinance. Nor does the issue of the certificate constitute registration of a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance. Issuers must ensure that a copy of the prospectus, complying with the requirements of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, has been registered by the Registrar of Companies before it is issued. Under no circumstances should the certificate of authorisation issued by the Exchange be relied upon as evidence either of compliance with the provisions of the Companies (Winding Up and Miscellaneous Provisions) Ordinance or of registration.

        • Chapter 12 Publication Requirements

          • Preliminary

            • 12.01

              Subject to rule 9.07, no listing document may be issued until the Exchange has confirmed to the issuer that it has no further comments.

            • 12.01A

              A new applicant must publish its Application Proof on the Exchange's website in accordance with rule 2.07C and Practice Note 22.

            • 12.01B

              A new applicant must publish its Post Hearing Information Pack on the Exchange's website in accordance with rule 2.07C and Practice Note 22.

          • On Issue

            • 12.02

              In the following cases, a formal notice stating the information set out in rule 12.04 must be published in accordance with rule 2.07C on the date of issue of the listing document:—

              (1) an offer for subscription or an offer for sale;
              (2) a placing by or on behalf of a new applicant where 25 per cent. or more of the amount placed is made available directly to the general public; and
              (3) a placing by or on behalf of a listed issuer of securities of a class new to listing where 25 per cent. or more of the amount placed is made available directly to the general public.

            • 12.03

              In the following cases, a formal notice stating the information set out in rule 12.04 must be published in accordance with rule 2.07C not less than two clear business days before dealings commence:—

              (1) a placing by or on behalf of a new applicant which does not fall within rule 12.02(2);
              (2) a placing by or on behalf of a listed issuer of securities of a class new to listing which does not fall within rule 12.02(3);
              (3) an introduction by or on behalf of a new applicant of any class of securities;
              (4) an introduction by or on behalf of a listed issuer of securities of a class new to listing; and
              (5) an issue by a listed issuer of securities of a class new to listing which does not fall within any of rules 12.02 or (1) to (4) above.

            • 12.04

              Where a formal notice is published in the newspaper, whether pursuant to rule 2.07C or otherwise, it must be not less than 12 centimetres by 16 centimetres (4 inches by 6 inches approximately) in size and must state at least the following:—

              (1) the name and country of incorporation or other establishment of the issuer;
              (2) the amount and title of the securities for which listing is sought;
              (3) the address(es) at which copies of the listing document (if any) are available to the public;

              Note: Where the issuer intends to rely on the Class Exemption Notice to make a Mixed Media Offer referred to in rule 12.11A(1), rule 12.11A(2) replaces this sub-rule.
              (4) the date of publication of the notice;
              (5) in the case of a placing, the names of the lead broker and, if applicable, any distributor(s);
              (6) a statement that application has been made to the Exchange for listing of and permission to deal in the securities;
              (7) a statement that the formal notice appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities;
              (8) in the cases set out in rule 12.02 a statement that applications will only be considered on the basis of the listing document;
              (9) the date upon which dealings in the securities are expected to commence; and
              (10) the name and address of the sponsor (if applicable).

            • 12.05

              Model forms of formal notices for offers for subscription or sale, placings and introductions are set out in Appendix 11 for the guidance of issuers. Issuers are reminded that where a prospectus has been registered with the Registrar of Companies pursuant to the Companies (Winding Up and Miscellaneous Provisions) Ordinance, every formal notice must comply with Section 38B of that Ordinance.

            • 12.06

              In all cases where the listing document is published in the newspapers, it must be accompanied by a statement that copies of the listing document are available to the public at (a) stated address(es) for a reasonable period (being not less than the offer period) and sufficient copies of the listing document must be made available at such address(es) to meet public demand during that period.

            • 12.07

              In all cases where a formal notice is required (see rules 12.02 and 12.03), the issuer must make sufficient copies of the listing document available to the public, free of charge, at the address(es) referred to in rule 12.04(3) to satisfy public demand for a reasonable period (in the cases set out in rule 12.02, not being less than the offer period and, in every other case, not being less than 14 days) from the date on which the formal notice is published.

          • After Issue

            • 12.08

              In the case of an offer for subscription, offer for sale or open offer, an announcement of the results of the offer, the basis of allotment of the securities and, where relevant, the basis of any acceptance of excess applications must be published in accordance with rule 2.07C as soon as possible, but in any event, not later than the time that is 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the business day next after the allotment letters or other relevant documents of title are posted.

              Note: The announcement should include information regarding the spread of applications including the number of applications for each share band and the allocation basis for each such band.

            • 12.09

              In the case of an offer for subscription or an offer for sale by tender, an announcement of the striking price must be published in accordance with rule 2.07C as soon as possible, but in any event not later than the time that is 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the business day next after the allotment letters or other relevant documents of title are posted.

            • 12.10

              In the case of a rights issue, an announcement of the results of the issue and of the basis of any acceptance of excess applications must be published in accordance with rule 2.07C as soon as possible, but in any event not later than the time that is 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the business day next after the allotment letters or other relevant documents of title are posted.

          • Publication of printed listing document and on CD ROM

            • 12.11

              Listing documents published by a new applicant must include copies available in printed form. A new applicant may, to the extent permitted by law and its own constitutional documents, make additional copies available to the public on CD ROM (together with the relevant application form in electronic form on the same CD ROM) provided that, the new applicant must ensure that:

              (a) the CD ROM includes:
              (i) a confirmation that the contents of the listing document and relevant application form in electronic form and in printed form are identical; and
              (ii) a confirmation that the listing document and relevant application form are also available in printed form and the addresses of the locations where they are available; and
              (b) any supplemental listing documents or subsequent amendments to the listing document are also made available in both printed form and on CD ROM and the new applicant must also comply with (a) above with all references to "listing document" and "application form" being construed as references to the supplemental listing document and relevant application form or subsequent amendment to the listing document and relevant application form.

          • Publication of electronic form prospectus and printed application form

            • 12.11A

              (1) Where an issuer intends to rely on section 9A of the Companies (Exemption of Companies and Prospectuses from Compliance with Provisions) Notice (Cap.32L) ("Class Exemption Notice") and issue a printed application form for its equity securities with an electronic form prospectus displayed on certain websites ("Mixed Media Offer"), it must satisfy all the conditions in the Class Exemption Notice. Where the issuer publishes any announcement under the Class Exemption Notice, the announcement must be published in accordance with rule 2.07C. There is no need to clear the announcement with the Exchange.
              (2) Where the issuer intends to offer equity securities to the public relying on the Class Exemption Notice, the information required by rule 12.04(3) shall be replaced by the following information:
              (a) that the issuer intends to rely on the Class Exemption Notice and issue a printed application form for its equity securities without it being accompanied by a printed form prospectus relating to the offer;
              (b) that throughout the offer period, prospective investors may access and download the electronic form prospectus relating to the offer from either the issuer's website or the Exchange's website;
              (c) the address of each of the issuer's website and the Exchange's website, the place on the website where the electronic form prospectus may be accessed and how that prospectus may be accessed;
              (d) that throughout the offer period, copies of the printed form prospectus will be available for collection at specified locations, free of charge, upon request by any member of the public;
              (e) the particulars of the specified locations; and

              Note: "Specified locations" means:
              (1) In the case of a listed issuer, the depository counter of HKSCC, the designated branches of the receiving banks specified in the prospectus, if any, and the place of business of the issuer's approved share registrar in Hong Kong.
              (2) In the case of a new applicant, the depository counter of HKSCC, the designated branches of the receiving banks specified in the prospectus, if any, and the principal place of business of the sponsors acting in respect of the application for listing of the equity securities.
              (f) that throughout the offer period, at least 3 copies of the printed form prospectus will be available for inspection at every location where the printed application forms are distributed.

        • Chapter 13 Continuing Obligations

          • Preliminary

            • 13.01

              An issuer shall comply (and undertakes by its application for listing (Form A1 of Appendix 5), once any of its securities have been admitted to listing, to comply) with the Listing Rules in force from time to time.

            • 13.02 [Repealed]

              [Repealed 1 January 2013]

            • 13.03

              The continuing obligations in this Chapter are primarily to ensure the maintenance of a fair and orderly market in securities and that all users of the market have simultaneous access to the same information. Failure by an issuer to comply with a continuing obligation may result in the Exchange taking disciplinary action in addition to its power to suspend or cancel a listing.

            • 13.04

              An issuer's directors are collectively and individually responsible for ensuring the issuer's full compliance with the Listing Rules.

          • Disclosure

            • Introduction (13.05-13.08)

              • 13.05

                (1) The Exchange has a duty under section 21 of the Securities and Futures Ordinance to ensure, so far as reasonably practicable, an orderly, informed and fair market.
                (2) The Inside Information Provisions impose statutory obligations on listed issuers and their directors to disclose inside information as soon as reasonably practicable after the information has come to the listed issuers' knowledge, and gives the Commission the responsibility for enforcing those obligations. The Commission has issued Guidelines on Disclosure of Inside Information. The Exchange will not give guidance on the interpretation or operation of the SFO or the Guidelines.
                (3) Where the Exchange becomes aware of a possible breach of the Inside Information Provisions, it will refer it to the Commission. The Exchange will not itself take disciplinary action under the Listing Rules unless the Commission considers it not appropriate to pursue the matter under the SFO and the Exchange considers action under the Rules for a possible breach of the Rules appropriate.

              • 13.06

                (1) This Chapter identifies circumstances in which an issuer must disclose information to the public. These are not alternatives to, and do not in any way detract from, the statutory disclosure obligation found in the Inside Information Provisions.
                (2) The Exchange may require the issuer to make an announcement or halt trading in its listed securities where it considers it appropriate to preserve or ensure an orderly, informed and fair market.
                (3) The Exchange, in discharge of its duty under section 21 of the SFO, will monitor the market, make enquiries when it considers them appropriate or necessary, and may halt trading in an issuer's securities in accordance with the Listing Rules as required.

              • 13.06A

                An issuer and its directors must take all reasonable steps to maintain strict confidentiality of inside information until it is announced.

              • 13.06B

                An issuer must not divulge any information in such a way as to place in a privileged dealing position any person or class or category of persons. It must not release any information in such a way that Exchange transactions may be entered into at prices which do not reflect the latest available information.

              • 13.07

                An issuer and its directors must seek to ensure that dealings do not take place between parties one of whom does not have inside information which the other possesses.

              • 13.08

                To maintain high standards of disclosure, the Exchange may require an issuer to announce further information, and impose additional requirements on it, when the Exchange considers that circumstances so justify. However, the Exchange will allow the issuer to make representations before imposing any requirements on it which are not imposed on issuers generally. The issuer must comply with the additional requirements failing which the Exchange may itself publish the information available to it. Conversely, the Exchange may waive, modify or not require compliance with any specific obligations in this Chapter in a particular case, but may require the issuer to enter into an agreement or undertaking as a condition of any dispensation.

            • General obligation of disclosure (13.09)

              • 13.09

                (1) Without prejudice to rule 13.10, where in the view of the Exchange there is or there is likely to be a false market in an issuer's securities, the issuer must, as soon as reasonably practicable after consultation with the Exchange, announce the information necessary to avoid a false market in its securities.

                Notes:
                1. This obligation exists whether or not the Exchange makes enquiries under rule 13.10.
                2. If an issuer believes that there is likely to be a false market in its listed securities, it must contact the Exchange as soon as reasonably practicable.
                (2)
                (a) Where an issuer is required to disclose inside information under the Inside Information Provisions, it must also simultaneously announce the information.
                (b) An issuer must simultaneously copy to the Exchange any application to the Commission for a waiver from disclosure under the Inside Information Provisions, and promptly upon being notified of the Commission's decision copy the Exchange with the Commission's decision.

            • Response to enquiries (13.10)

              • 13.10

                Where the Exchange makes enquiries concerning unusual movements in the price or trading volume of an issuer's listed securities, the possible development of a false market in its securities, or any other matters, the issuer must respond promptly as follows:

                (1) provide to the Exchange and, if requested by the Exchange, announce, any information relevant to the subject matter(s) of the enquiries which is available to it, so as to inform the market or to clarify the situation; or
                (2) if, and only if, the directors of the issuer, having made such enquiry with respect to the issuer as may be reasonable in the circumstances, are not aware of any matter or development that is or may be relevant to the unusual trading movement of its listed securities, or information necessary to avoid a false market, or any inside information which needs to be disclosed under the Inside Information Provisions, and if requested by the Exchange, make an announcement containing a statement to that effect (see note 1 below).

                Notes:
                1. The form of the announcement referred to in rule 13.10(2) is as follows:—

                "This announcement is made at the request of The Stock Exchange of Hong Kong Limited.

                We have noted [the recent increases/decreases in the price [or trading volume] of the [shares/ warrants] of the Company] or [We refer to the subject matter of the Exchange's enquiry]. Having made such enquiry with respect to the Company as is reasonable in the circumstances, we confirm that we are not aware of [any reasons for these price [or volume] movements] or of any information which must be announced to avoid a false market in the Company's securities or of any inside information that needs to be disclosed under Part XIVA of the Securities and Futures Ordinance.

                This announcement is made by the order of the Company. The Company's Board of Directors collectively and individually accepts responsibility for the accuracy of this announcement."
                2. An issuer does not need to disclose inside information under the Rules if disclosure of the information is exempted under the Inside Information Provisions.
                3. The Exchange reserves the right to direct a trading halt of an issuer's securities if an announcement under rule 13.10(1) or 13.10(2) cannot be made promptly.

            • Trading halt or trading suspension (13.10A)

              • 13.10A

                Without prejudice to the Exchange's ability to direct the halt, suspension and resumption of trading in an issuer's listed securities, an issuer must, as soon as reasonably practicable, apply for a trading halt or a trading suspension in any of the following circumstances where an announcement cannot be made promptly:

                (1) it has information which must be disclosed under rule 13.09; or
                (2) it reasonably believes that there is inside information which must be disclosed under the Inside Information Provisions; or
                (3) circumstances exist where it reasonably believes or it is reasonably likely that confidentiality may have been lost in respect of inside information which:
                (a) is the subject of an application to the Commission for a waiver; or
                (b) falls within any of the exceptions to the obligation to disclose inside information under the Inside Information Provisions in section 307D(2) of the SFO.

                Note: An issuer does not need to disclose inside information under the Rules if disclosure of the information is exempted under the Inside Information Provisions.

            • Announce information disclosed to other stock exchanges (13.10B)

              • 13.10B

                An issuer must announce any information released to any other stock exchange on which its securities are listed at the same time as the information is released to that other exchange.

                Note: An issuer will need to announce overseas regulatory information released by its overseas listed subsidiary if the information is discloseable by the issuer under other rules.

          • Specific Matters Relevant to the Issuer's Business

            • 13.11

              (1) Rules 13.12 to 13.19 set out specific instances that give rise to a disclosure obligation on an issuer's part.

              Note: Transactions and financing arrangements of the sort referred to in rules 13.12 to 13.19 may also be subject to Chapters 14 and/or 14A.
              (2) For the purposes of rules 13.12 to 13.19,
              (a) the expression "affiliated company" refers to a company which, in accordance with Hong Kong Financial Reporting Standards, is recorded using the equity method of accounting in an entity's financial statements. This includes associated companies and jointly controlled entities as defined in those standards;
              (b) [Repealed 1 March 2006];
              (c) the expression "relevant advance to an entity" refers to the aggregate of amounts due from and all guarantees given on behalf of:
              (i) an entity;
              (ii) the entity's controlling shareholder;
              (iii) the entity's subsidiaries; and
              (iv) the entity's affiliated companies.
              (d) [Repealed 1 January 2013]
              (3) [Repealed 1 January 2013]
              (4) No disclosure is necessary under rules 13.12 to 13.19 where the indebtedness or financial assistance arises from a transaction which was approved by shareholders provided that information equivalent to that specified in rules 13.15 or 13.16, as applicable, was included in the circular to shareholders of the issuer.
              (5) [Repealed 1 January 2013]

            • Situations for disclosure (13.12)

              • 13.12

                The issues set out in rules 13.13 to 13.19 should be viewed on a group basis, including those arising either from a direct relationship or indirectly through subsidiaries and affiliated companies.

            • Advance to an entity (13.13-13.15A)

              • 13.13

                Where the relevant advance to an entity exceeds 8% under the assets ratio defined under rule 14.07(1), the issuer must announce the information in rule 13.15 as soon as reasonably practicable. For the avoidance of doubt, an advance to a subsidiary of the issuer will not be regarded as an advance to an entity.

              • 13.14

                Where the relevant advance to an entity increases from that previously disclosed under rule 13.13, 13.14, or 13.20 and the amount of the increase since the previous disclosure is 3% or more under the assets ratio defined under rule 14.07(1), the issuer must announce the information in rule 13.15 as soon as reasonably practicable.

              • 13.15

                Under rule 13.13 or 13.14, issuers must announce details of the relevant advance to an entity, including details of the balances, the nature of events or transactions giving rise to the amounts, the identity of the debtor group, interest rate, repayment terms and collateral.

              • 13.15A

                For the purpose of rules 13.13 and 13.14, any trade receivable is not regarded as a relevant advance to an entity if:

                (1) it arose in the issuer's ordinary and usual course of business (other than as a result of the provision of financial assistance); and
                (2) the transaction from which the trade receivable arose was on normal commercial terms.

            • Financial assistance and guarantees to affiliated companies of an issuer (13.16)

              • 13.16

                Where the financial assistance to affiliated companies of an issuer, and guarantees given for facilities granted to affiliated companies of an issuer, together in aggregate exceeds 8% under the assets ratio defined under rule 14.07(1), the issuer must announce as soon as reasonably practicable the following information:

                (1) analysis by company of the amount of financial assistance given to, committed capital injection to, and guarantees given for facilities granted to, affiliated companies;
                (2) terms of the financial assistance, including interest rate, method of repayment, maturity date, and the security therefor, if any;
                (3) source of funding for the committed capital injection; and
                (4) banking facilities utilised by affiliated companies which are guaranteed by the issuer.

            • Pledging of shares by the controlling shareholder (13.17)

              • 13.17

                Where the issuer's controlling shareholder has pledged all or part of its interest in the issuer's shares to secure the issuer's debts or to secure guarantees or other support of its obligations, the issuer must announce the following information as soon as reasonably practicable:

                (1) the number and class of shares being pledged;
                (2) the amounts of debts, guarantees or other support for which the pledge is made; and
                (3) any other details that are considered necessary for an understanding of the arrangements.

            • Loan agreements with covenants relating to specific performance of the controlling shareholder (13.18)

              • 13.18

                Where an issuer (or any of its subsidiaries) enters into a loan agreement that includes a condition imposing specific performance obligations on any controlling shareholder (e.g. a requirement to maintain a specified minimum holding in the share capital of the issuer) and breach of such an obligation will cause a default in respect of loans that are significant to the issuer's operations, the issuer must announce the following information as soon as reasonably practicable:

                (1) the aggregate level of the facilities that may be affected by such breach;
                (2) the life of the facility; and
                (3) the specific performance obligation imposed on any controlling shareholder.

            • Breach of loan agreement by an issuer (13.19)

              • 13.19

                When an issuer breaches the terms of its loan agreements for loans that are significant to its operations, such that the lenders may demand their immediate repayment, and where the lenders have not issued a waiver in respect of the breach, the issuer must announce such information as soon as reasonably practicable.

            • Continuing disclosure requirements (13.20-13.22)

              • 13.20

                Where the circumstances giving rise to a disclosure under rule 13.13 continue to exist at the issuer's interim period end or annual financial year end, the information specified under rule 13.15, as at the interim period end or year end, shall be included in the interim or annual report.

              • 13.21

                Where an obligation arises under rules 13.17, 13.18 or 13.19, the disclosures required by these rules should be included in subsequent interim and annual reports for so long as circumstances giving rise to the obligation continue to exist.

              • 13.22

                Where the circumstances giving rise to a disclosure under rule 13.16 continue to exist at the issuer's interim period end or annual financial year end, its interim or annual report must include a combined balance sheet of affiliated companies as at the latest practicable date. The combined balance sheet of affiliated companies should include significant balance sheet classifications and state the issuer's attributable interest in the affiliated companies. If it is not practicable to prepare the combined balance sheet of affiliated companies, the Exchange on the issuer's application may consider accepting, as an alternative, a statement of the indebtedness, contingent liabilities and capital commitments as at the end of the period reported on by affiliated companies.

            • Notifiable transactions, connected transactions, takeovers and share repurchases (13.23)

              • 13.23

                (1) An issuer must announce details of acquisitions and realisations of assets and other transactions required by Chapters 14 and 14A and, where applicable, must circularise holders of its listed securities with their details and obtain their approval of them.
                (2) The issuer shall comply with the Takeovers Code and the Code on Share Buy-backs.

                Note: Where the consideration under an offer includes securities for which listing is being or is to be sought, the offer document(s) will constitute a listing document.

            • Sufficient operations (13.24-13.24A)

              • 13.24

                An issuer shall carry out, directly or indirectly, a sufficient level of operations or have tangible assets of sufficient value and/or intangible assets for which a sufficient potential value can be demonstrated to the Exchange to warrant the continued listing of the issuer's securities.

              • 13.24A

                An issuer must, after trading in its listed securities has been suspended, publish periodic announcements of its developments.

            • Material matters which impact on profit forecasts (13.24B)

              • 13.24B

                (1) If, during the profit forecast period, an event occurs which, had it been known when the profit forecast was made, would have caused any of the assumptions upon which the forecast is based to have been materially different, the issuer must promptly announce the event. In the announcement, the issuer must also indicate its view of the likely impact of that event on the profit forecast already made.
                (2)
                (a) If profit or loss generated by some activity outside the issuer's ordinary and usual course of business which was not disclosed as anticipated in the document containing the profit forecast, materially contributes to or reduces the profits for the period to which the profit forecast relates, the issuer must announce this information, including an indication of the level to which the unusual activity has contributed to or reduced the profit.
                (b) The issuer must announce the information under rule 13.24B(2)(a) as soon as it becomes aware that it is likely that the contribution to or reduction in the profits made or to be made by the profit or loss generated or to be generated will be material.

            • Winding-up and liquidation (13.25)

              • 13.25

                (1) An issuer shall inform the Exchange of the happening of any of the following events as soon as it comes to its attention:—
                (a) the appointment of a receiver or manager either by any court having jurisdiction or under the terms of a debenture or any application to any court having jurisdiction for the appointment of a receiver or manager, or equivalent action in the country of incorporation or other establishment, in respect of the business or any part of the business of the issuer or the property of the issuer, its holding company or any subsidiary falling under rule 13.25(2);
                (b) the presentation of any winding-up petition, or equivalent application in the country of incorporation or other establishment, or the making of any winding-up order or the appointment of a provisional liquidator, or equivalent action in the country of incorporation or other establishment, against or in respect of the issuer, its holding company or any subsidiary falling under rule 13.25(2);
                (c) the passing of any resolution by the issuer, its holding company or any subsidiary falling under rule 13.25(2) that it be wound up by way of members' or creditors' voluntary winding-up, or equivalent action in the country of incorporation or other establishment;
                (d) the entry into possession of or the sale by any mortgagee of a portion of the issuer's assets where the aggregate value of the total assets or the aggregate amount of profits or revenue attributable to such assets represents more than 5% under any of the percentage ratios defined under rule 14.04(9) ; or
                (e) the making of any final judgment, declaration or order by any court or tribunal of competent jurisdiction whether on appeal or at first instance which is not subject to any or further appeal, which may adversely affect the issuer's enjoyment of any portion of its assets where the aggregate value of the total assets or the aggregate amount of profits or revenue attributable to such assets represents more than 5% under any of the percentage ratios defined under rule 14.04(9).
                (2) Rules 13.25(1)(a), (b) and (c) will apply to a subsidiary of the issuer if the value of that subsidiary's total assets, profits or revenue represents 5% or more under any of the percentage ratios defined under rule 14.04(9). For the purpose of this rule 13.25(2), 100% of that subsidiary's total assets, profits or revenue (as the case may be) or, where that subsidiary itself has subsidiaries, the consolidated total assets, profits or revenue (as the case may be) of that subsidiary is to be compared to the total assets, profits or revenue (as the case may be) shown in the issuer's latest published audited consolidated financial statements irrespective of the interest held in the subsidiary.

                Notes: [Repealed 1 January 2013]

          • General Matters Relevant to the Issuer's Securities

            • Changes in issued shares (13.25A)

              • 13.25A

                (1) In addition and without prejudice to specific requirements contained elsewhere in the Exchange Listing Rules, an issuer must, whenever there is a change in its issued shares as a result of or in connection with any of the events referred to in rule 13.25A(2), submit through HKEx-EPS, or such other means as the Exchange may from time to time prescribe, for publication on the Exchange's website a return in such form and containing such information as the Exchange may from time to time prescribe by not later than 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the business day next following the relevant event.
                (2) The events referred to in rule 13.25A(1) are as follows:
                (a) any of the following:
                (i) placing;
                (ii) consideration issue;
                (iii) open offer;
                (iv) rights issue;
                (v) bonus issue;
                (vi) scrip dividend;
                (vii) repurchase of shares or other securities;
                (viii) exercise of an option under the issuer's share option scheme by any of its directors;
                (ix) exercise of an option other than under the issuer's share option scheme by any of its directors;
                (x) capital reorganisation; or
                (xi) change in issued shares not falling within any of the categories referred to in rule 13.25A(2)(a)(i) to (x) or rule 13.25A(2)(b); and
                (b) subject to rule 13.25A(3), any of the following:
                (i) exercise of an option under a share option scheme other than by a director of the issuer;
                (ii) exercise of an option other than under a share option scheme not by a director of the issuer;
                (iii) exercise of a warrant;
                (iv) conversion of convertible securities; or
                (v) redemption of shares or other securities.
                (3) The disclosure obligation for an event in rule 13.25A(2)(b) only arises where:
                (a) the event, either individually or when aggregated with any other events described in that rule which have occurred since the listed issuer published its last monthly return under rule 13.25B or last return under this rule 13.25A (whichever is the later), results in a change of 5% or more of the listed issuer's issued shares; or
                (b) an event in rule 13.25A(2)(a) has occurred and the event in rule 13.25A(2)(b) has not yet been disclosed in either a monthly return published under rule 13.25B or a return published under this rule 13.25A.
                (4) For the purposes of rule 13.25A(3), the percentage change in the listed issuer's issued shares is to be calculated by reference to the listed issuer's total number of issued shares as it was immediately before the earliest relevant event which has not been disclosed in a monthly return published under rule 13.25B or a return published under this rule 13.25A.

            • Monthly return (13.25B)

              • 13.25B

                A listed issuer shall, by no later than 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the fifth business day next following the end of each calendar month, submit through HKEx-EPS, or such other means as the Exchange may from time to time prescribe, for publication on the Exchange's website a monthly return in relation to movements in the listed issuer's equity securities, debt securities and any other securitised instruments, as applicable, during the period to which the monthly return relates, in such form and containing such information as the Exchange may from time to time prescribe (irrespective of whether there has been any change in the information provided in its previous monthly return). Such information includes, among other things, the number as at the close of such period of equity securities, debt securities and any other securitised instruments, as applicable, issued and which may be issued pursuant to options, warrants, convertible securities or any other agreements or arrangements.

            • Subsequent listing (13.26)

              • 13.26

                (1) An issuer shall, prior to their issue, apply for the listing of any further securities which are of the same class as securities already listed and shall not issue such securities unless approval for the listing of those securities has been granted by the Exchange.
                (2) A PRC issuer shall not apply for the listing of any of its foreign shares on a PRC stock exchange unless the Exchange is satisfied that the relative rights of the holders of overseas listed foreign shares are adequately protected.

            • Changes in the terms of convertible securities (13.27)

              • 13.27

                An issuer shall, if the issue of new securities by it or the purchase by it of its listed securities will result in a change in the terms of conversion of any of its convertible securities or in the terms of the exercise of any of its options, warrants or similar rights, publish an announcement in accordance with rule 2.07C as to the effect of any such change wherever practicable, prior to the new issue and, if not so practicable, as soon as possible thereafter.

            • Issue of securities (13.28-13.29)

              • 13.28

                Where the directors agree to issue securities for cash in accordance with rule 13.36(1) (a) or 13.36(2), an issuer shall publish an announcement in accordance with rule 2.07C as soon as possible, but in any event not later than the time that is 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the next business day, containing the following information:—

                (1) the name of the issuer;
                (2) the number, class and aggregate nominal value of the securities agreed to be issued;

                Note: If the issue involves (i) securities convertible into shares of the issuer or (ii) options, warrants or similar rights to subscribe for shares or such convertible securities, the announcement should also contain:
                (a) the conversion/subscription price and a summary of the provisions for adjustments of such price and/or number of shares to be issued and all other material terms of the convertible securities or warrants; and
                (b) the maximum number of shares that could be issued upon exercise of the conversion/subscription rights.
                (3) the total funds to be raised and the proposed use of the proceeds;
                (4) the issue price of each security and the basis for determining the same;
                (5) the net price to the issuer of each security;
                (6) the reasons for making the issue;
                (7) the names of the allottees, if less than six in number and, in the case of six or more allottees, a brief generic description of them. The Exchange reserves the right to require submission of such further information (on an electronic spreadsheet or such other format as it may request) on the allottees as it may consider necessary for the purpose of establishing their independence, including without limitation details of beneficial ownership;
                (8) the market price of the securities concerned on a named date, being the date on which the terms of the issue were fixed;
                (9) the total funds raised and a detailed breakdown and description of the funds raised on any issue of equity securities in the 12 months immediately preceding the announcement of the proposed issue of securities, the use of such proceeds, the intended use of any amount not yet utilised and how the issuer has dealt with such amount;
                (10) where applicable, the name of the underwriter/placing agent and the principal terms of the underwriting/placing arrangements;
                (11) a statement whether the issue is subject to shareholders' approval;
                (12) where the securities are issued under a general mandate granted to the directors by the shareholders in accordance with rule 13.36(2)(b), details of the mandate;
                (13) where the securities are issued by way of a rights issue or an open offer, the information set out in paragraph 18 of Appendix 1, Part B;
                (14) conditions to which the issue is subject or a negative statement if applicable; and
                (15) any other material information with regard to the issue (including any restrictions on the ability of the issuer to issue further securities or any restrictions on the ability of the allottees to dispose of shares issued to them or any restrictions on the ability of existing shareholders to dispose of their securities arising in connection with the allotment).

                Notes:
                (1) This rule does not apply to a grant of options or issue of securities under a share option scheme which complies with Chapter 17. For these, the issuer must follow the announcement requirement under rule 17.06A.
                (2) For any exercise of these options, the issuer must follow the disclosure obligations under rules 13.25A and 13.25B.

              • 13.29

                Where the securities are issued for cash under the authority of a general mandate granted to the directors by the shareholders in accordance with rule 13.36(2)(b) and at a discount of 20% or more to the benchmarked price set out in rule 13.36(5), the issuer shall publish an announcement in accordance with rule 2.07C as soon as possible, but in any event not later than the time that is 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the business day immediately following the day on which the relevant agreement involving the proposed issue of securities is signed. The announcement must disclose, among other things, the following information:

                (1) where there are less than 10 allottees, the name of each allottee (or, if applicable, the name of its beneficial owners) and a confirmation of its independence from the issuer; and
                (2) where there are 10 or more allottees, the name of each allottee (or, if applicable, the name of its beneficial owners) subscribing 5% or more of the securities issued and a generic description of all other allottees, and a confirmation of their independence from the issuer. When calculating the 5% limit, the number of securities subscribed by each allottee, its holding company and any of their subsidiaries must be aggregated.

            • Basis of allotment (13.30)

              • 13.30

                An issuer shall inform the Exchange of the basis of allotment of securities offered to the public for subscription or sale or an open offer and of the results of any rights issue and, if applicable, of the basis of any acceptance of excess applications, not later than the morning of the business day next after the allotment letters or other relevant documents of title are posted.

                Note: The Exchange should also be informed of any extension of time granted for the currency of temporary documents of title.

            • Purchase of securities (13.31)

              • 13.31

                (1) An issuer shall inform the Exchange as soon as possible after any purchase, sale, drawing or redemption by the issuer, or any member of the group, of its listed securities (whether on the Exchange or otherwise) and the issuer hereby authorises the Exchange to disseminate such information to such persons and in such manner as the Exchange may think fit.
                (2) A PRC issuer shall not issue any redeemable shares unless the Exchange is satisfied that the relative rights of the holders of overseas listed foreign shares are adequately protected.

                Notes:
                1. Purchases by the issuer of its own securities (whether on the Exchange or otherwise) must be notified to the Exchange by not later than 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the business day following dealing. The information given should include the number of securities purchased and the purchase price per security or the highest and lowest prices paid, where relevant.
                2. Issuers may only purchase their own securities on the Exchange in accordance with the provisions of rule 10.06 (which is, in the case of an overseas issuer, subject to rule 19.43 if the issuer's primary listing is or is to be on another stock exchange; and in the case of a PRC issuer, amended by the provisions of Chapter 19A).

            • Minimum prescribed public holdings and other listings (13.32-13.35)

              • 13.32

                (1) Issuers shall maintain the minimum percentage of listed securities as prescribed by rule 8.08 at all times in public hands. An issuer shall inform the Exchange immediately:—
                (a) if it becomes aware that the number of listed securities which are in the hands of the public has fallen below the relevant prescribed minimum percentage; and
                (b) if any part of the securities of the issuer or any of its subsidiaries becomes listed or dealt in on any other stock exchange, stating which stock exchange.
                (2) Once the issuer becomes aware that the number of listed securities in the hands of the public has fallen below the relevant prescribed minimum percentage the issuer shall take steps to ensure compliance at the earliest possible moment.

                Notes:
                (1) The prescribed minimum percentage is determined by the Exchange at the time of listing under rule 8.08(1).
                (2) The lower percentage of securities in public hands that the Exchange may at its discretion grant to eligible issuers under rule 8.08(1)(d) may only be granted at the time of listing and will not be open for application post listing notwithstanding an issuer may after listing attain a market capitalisation of over HK$10,000,000,000.
                (3) If the percentage falls below the minimum, the Exchange reserves the right to require suspension of trading in an issuer's securities until appropriate steps have been taken to restore the minimum percentage of securities in public hands. In this connection, the Exchange will normally require suspension of trading in an issuer's securities where the percentage of its public float falls below 15% (or 10% in the case of an issuer that has been granted a lower percentage of public float under rule 8.08(1)(d) at the time of listing).
                (4) Where the percentage has fallen below the minimum, the Exchange may refrain from suspension if it is satisfied that there remains an open market in the securities and either:
                (a) the shortfall in the prescribed percentage arose purely from an increased or newly acquired holding of the listed securities by a person who is, or after such acquisition becomes, a core connected person only because he is a substantial shareholder of the issuer and/or any of its subsidiaries. Such substantial shareholder must not be a controlling shareholder or single largest shareholder of the issuer. He must also be independent of the issuer, directors and any other substantial shareholders of the issuer and must not be a director of the issuer. If the substantial shareholder has any representative on the board of directors of the issuer, he must demonstrate that such representation is on a non-executive basis. In general, the Exchange would expect this to apply to holdings of the listed securities by institutional investors with a wide spread of investments other than in the listed securities concerned. Holdings of the listed securities by venture capital funds which have been involved in the management of the issuer before and/or after listing would not qualify. It is the responsibility of the issuer to provide sufficient information to the Exchange to demonstrate the independence of such substantial shareholder and to inform the Exchange of any change in circumstances which would affect his independence as soon as it becomes aware of such change; or
                (b) the issuer and the controlling shareholder(s) or single largest shareholder undertake to the Exchange to take appropriate steps to ensure restoration of the minimum percentage of securities to public hands within a specified period which is acceptable to the Exchange.
                (5) At any time when the percentage of securities in public hands is less than the required minimum, and the Exchange has permitted trading in the securities to continue, the Exchange will monitor closely all trading in the securities to ensure that a false market does not develop and may suspend the securities if there is any unusual price movement.

              • 13.33

                Notwithstanding the requirement that the prescribed minimum percentage of securities must at all times remain in public hands, the Exchange may consider granting a temporary waiver to an issuer which is the subject of a general offer under the Takeovers Code (including a privatisation offer), for a reasonable period after the close of the general offer to restore the percentage. The issuer must restore the minimum percentage of securities in public hands immediately after the expiration of the waiver, if granted.

              • 13.34

                Where the Exchange has reason to believe that there is a lack of genuine open market in the securities of an issuer, or that the securities of an issuer may be concentrated in the hands of a few shareholders to the detriment or without the knowledge of the investing public, the issuer must forthwith upon request by the Exchange:

                (a) publish an announcement in accordance with rule 2.07C to inform the public that its securities may not have a genuine market or its shareholding may have been concentrated in the hands of a few shareholders; and remind the public to exercise caution when dealing in its securities; and
                (b) conduct an investigation under section 329 of the Securities and Futures Ordinance and publish an announcement in accordance with rule 2.07C containing the findings of the investigation.

              • 13.35

                An issuer shall include in its annual report a statement of sufficiency of public float. The statement should be based on information that is publicly available to the issuer and within the knowledge of its directors as at the latest practicable date prior to the issue of the annual report.

            • Pre-emptive rights (13.36)

              • 13.36

                (1)
                (a) Except in the circumstances mentioned in rule 13.36(2), the directors of the issuer (other than a PRC issuer, to which the provisions of rule 19A.38 apply) shall obtain the consent of shareholders in general meeting prior to allotting, issuing or granting:—
                (i) shares;
                (ii) securities convertible into shares; or
                (iii) options, warrants or similar rights to subscribe for any shares or such convertible securities.

                Note: Importance is attached to the principle that a shareholder should be able to protect his proportion of the total equity by having the opportunity to subscribe for any new issue of equity securities. Accordingly, unless shareholders otherwise permit, all issues of equity securities by the issuer must be offered to the existing shareholders (and, where appropriate, to holders of other equity securities of the issuer entitled to be offered them) pro rata to their existing holdings, and only to the extent that the securities offered are not taken up by such persons may they be allotted or issued to other persons or otherwise than pro rata to their existing holdings. This principle may be waived by the shareholders themselves on a general basis, but only within the limits of rules 13.36(2) and (3).
                (b) Notwithstanding rule 13.36(2)(b), the directors of the issuer (other than a PRC issuer, to which the provisions of rule 19A.38 apply) shall obtain the consent of the shareholders in general meeting prior to allotting any voting shares if such allotment would effectively alter the control of the issuer.
                (2) No such consent as is referred to in rule 13.36(1)(a) shall be required:—
                (a) for the allotment, issue or grant of such securities pursuant to an offer made to the shareholders of the issuer which excludes for that purpose any shareholder that is resident in a place outside Hong Kong provided the directors of the issuer consider such exclusion to be necessary or expedient on account either of the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place and, where appropriate, to holders of other equity securities of the issuer entitled to be offered them, pro rata (apart from fractional entitlements) to their existing holdings; or

                Notes:
                1. The issuer must make enquiry regarding the legal restrictions under the laws of the relevant place and the requirements of the relevant regulatory body or stock exchange and may only exclude such overseas shareholders on the basis that, having made such enquiry, it would be necessary or expedient to do so.
                2. If any shareholders that are resident outside Hong Kong are excluded from an offer of securities pursuant to rule 13.36(2)(a), the issuer shall include an explanation for the exclusion in the relevant circular or document containing the offer of securities. Issuers shall ensure that the circular or offer document is delivered to such shareholders for their information subject to compliance with the relevant local laws, regulations and requirements.
                (b) if, but only to the extent that, the existing shareholders of the issuer have by ordinary resolution in general meeting given a general mandate to the directors of the issuer, either unconditionally or subject to such terms and conditions as may be specified in the resolution, to allot or issue such securities or to grant any offers, agreements or options which would or might require securities to be issued, allotted or disposed of, whether during the continuance of such mandate or thereafter, subject to a restriction that the aggregate number of securities allotted or agreed to be allotted must not exceed the aggregate of (i) 20% of the number of issued shares of the issuer as at the date of the resolution granting the general mandate (or in the case of a scheme of arrangement involving an introduction in the circumstances set out in rule 7.14(3), 20% of the number of issued shares of an overseas issuer following the implementation of such scheme) and (ii) the number of such securities repurchased by the issuer itself since the granting of the general mandate (up to a maximum number equivalent to 10% of the number of issued shares of the issuer as at the date of the resolution granting the repurchase mandate), provided that the existing shareholders of the issuer have by a separate ordinary resolution in general meeting given a general mandate to the directors of the issuer to add such repurchased securities to the 20% general mandate.

                Notes:
                1. Other than where independent shareholders' approval has been obtained, an issue of securities to a connected person pursuant to a general mandate given under rule 13.36(2)(b) is only permitted in the circumstances set out in rule 14A.92.
                2. An overseas issuer does not have to comply with rule 13.36 if its primary listing is or is to be on another stock exchange and it is not subject to any other statutory or other requirement giving pre-emptive rights to shareholders over further issues of share capital.
                3. If the issuer conducts a share consolidation or subdivision after the issue mandate has been approved in general meeting, the maximum number of securities that may be issued under the mandate as a percentage of the total number of issued shares at the date immediately before and after such consolidation or subdivision shall be the same.
                (3) A general mandate given under rule 13.36(2) shall only continue in force until:—
                (a) the conclusion of the first annual general meeting of the issuer following the passing of the resolution at which time it shall lapse unless, by ordinary resolution passed at that meeting, the mandate is renewed, either unconditionally or subject to conditions; or
                (b) revoked or varied by ordinary resolution of the shareholders in general meeting,
                whichever occurs first.
                (4) Where the issuer has obtained a general mandate from its shareholders pursuant to rule 13.36(2)(b), any refreshments of the general mandate before the next annual general meeting shall be subject to the following provisions:
                (a) any controlling shareholders and their associates or, where there are no controlling shareholders, directors (excluding independent non-executive directors) and the chief executive of the issuer and their respective associates shall abstain from voting in favour;
                (b) the Exchange reserves the right to require the following parties to abstain from voting in favour of the relevant resolution at the general meeting:
                (i) any parties who were controlling shareholders of the issuer at the time the decision to seek a refreshment of the mandate was made or approved by the board, and their associates; or
                (ii) where there were no such controlling shareholders, directors (excluding independent non-executive directors) and the chief executive of the issuer at the time the decision to seek a refreshment of the mandate was made or approved by the board, and their respective associates;
                (c) the issuer must comply with the requirements set out in rules 13.39(6) and (7), 13.40, 13.41 and 13.42;
                (d) the relevant circular to shareholders must contain information relating to the issuer's history of refreshments of mandate since the last annual general meeting, the amount of proceeds raised from the utilisation of such mandate, the use of such proceeds, the intended use of any amount not yet utilised and how the issuer has dealt with such amount. The circular must also contain information required under rule 2.17; and
                (e) where the issuer offers or issues securities to its shareholders pro rata to their existing holdings (including where overseas shareholders are excluded for legal or regulatory reasons), it will not be necessary for the issuer to comply with rules 13.36(4)(a), (b) or (c) in order for it to refresh its general mandate immediately thereafter such that the amount in percentage terms of the unused part of the general mandate upon refreshment is the same as the unused part of the general mandate immediately before the issue of securities. In such cases, it need only obtain approval from its shareholders and comply with rule 13.36(4)(d).
                (5) In the case of a placing of securities for cash consideration, the issuer may not issue any securities pursuant to a general mandate given under rule 13.36 (2)(b) if the relevant price represents a discount of 20% or more to the benchmarked price of the securities, such benchmarked price being the higher of:
                (a) the closing price on the date of the relevant placing agreement or other agreement involving the proposed issue of securities under the general mandate; and
                (b) the average closing price in the 5 trading days immediately prior to the earlier of:
                (i) the date of announcement of the placing or the proposed transaction or arrangement involving the proposed issue of securities under the general mandate;
                (ii) the date of the placing agreement or other agreement involving the proposed issue of securities under the general mandate; and
                (iii) the date on which the placing or subscription price is fixed,
                unless the issuer can satisfy the Exchange that it is in a serious financial position and that the only way it can be saved is by an urgent rescue operation which involves the issue of new securities at a price representing a discount of 20% or more to the benchmarked price of the securities or that there are other exceptional circumstances. The issuer shall provide the Exchange with detailed information on the allottees to be issued with securities under the general mandate.

          • Meetings

            • Notice of AGM (13.37)

              • 13.37

                An issuer shall ensure that notice of every annual general meeting is published in accordance with rule 2.07C (see also rules 13.71 to 13.73). Where it is published in the newspapers, whether pursuant to rule 2.07C or otherwise, such notice must be of a size of not less than 8 centimetres by 10 centimetres (three inches by four inches approximately).

            • Proxy forms (13.38)

              • 13.38

                An issuer shall send with the notice convening a meeting of holders of listed securities to all persons entitled to vote at the meeting proxy forms, with provision for two-way voting on all resolutions intended to be proposed thereat.

                Notes:

                1. The object of the requirement relating to proxy forms is to ensure that holders have adequate opportunity to express their views on all resolutions intended to be proposed such as the adoption of the annual accounts and reelection of directors (and, in the case of a PRC issuer, supervisors).
                2. Provided two-way proxy forms are made available, the printing and postal arrangements are matters entirely at the discretion of the issuer. The proxy form must state that if it is returned without an indication as to how the proxy shall vote on any particular matter the proxy will exercise his discretion as to whether he votes and if so how. The proxy form must state that a shareholder is entitled to appoint a proxy of his own choice and must provide a space for the name of such proxy.
                3. The proxy form must be submitted for publication on the Exchange's website in accordance with rule 2.07C.

            • Meetings of Shareholders (13.39-13.42)

              • 13.39

                (1) An issuer proposing to solicit proxies or votes in connection with any general meeting of the issuer may only use for such purpose previously published information which remains accurate and is not misleading at the time it is quoted.
                (2) Shareholders must not be put under pressure to vote or abstain from voting at any general meeting and, where their votes are solicited, must be encouraged to consult their professional advisers.
                (3) [Repealed 1 January 2009]
                (4) Any vote of shareholders at a general meeting must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. The issuer must announce the results of the poll in the manner prescribed under rule 13.39(5).

                Note: Procedural and administrative matters are those that:
                (1) are not on the agenda of the general meeting or in any supplementary circular to members; and
                (2) which relate to the chairman's duties to maintain the orderly conduct of the meeting and/or allow the business of the meeting to be properly and effectively dealt with, whilst allowing all shareholders a reasonable opportunity to express their views.
                (5) The issuer must announce the meeting's poll results as soon as possible, but in any event at least 30 minutes before the earlier of either the commencement of the morning trading session or any pre-opening session on the business day after the meeting.

                The poll results announcement must include the number of:
                (a) shares entitling the holder to attend and vote on a resolution at the meeting;
                (b) shares entitling the holder to attend and abstain from voting in favour as set out in rule 13.40;
                (c) shares of holders that are required under the Listing Rules to abstain from voting;
                (d) shares actually voted for a resolution; and
                (e) shares actually voted against a resolution.
                The issuer must appoint its auditors, share registrar or external accountants who are qualified to serve as its auditors as scrutineer for the vote-taking and state the identity of the scrutineer in the announcement. The issuer must state in the announcement whether or not any parties that have stated their intention in the circular to vote against the relevant resolution or to abstain have done so at the general meeting.
                (6) In relation to any transactions that are subject to independent shareholders' approval pursuant to the Exchange Listing Rules or spin-off proposals that are subject to approval of the shareholders of the issuer pursuant to paragraph 3 (e) of Practice Note 15 of the Exchange Listing Rules,
                (a) the issuer shall establish an independent board committee (which shall consist only of independent non-executive directors) to advise shareholders as to whether the terms of the relevant transaction or arrangement are fair and reasonable and whether such a transaction or arrangement is in the interests of the issuer and its shareholders as a whole and to advise shareholders on how to vote, taking into account the recommendations of the independent financial adviser appointed under rule 13.39(6)(b);
                (b) the issuer shall appoint an independent financial adviser acceptable to the Exchange to make recommendations to the independent board committee and the shareholders as to whether the terms of the relevant transaction or arrangement are fair and reasonable and whether such a transaction or arrangement is in the interests of the issuer and its shareholders as a whole and to advise shareholders on how to vote; and
                (c) the independent board committee shall not consist of any independent nonexecutive directors who have a material interest in the relevant transaction or arrangement. The independent board committee may consist of only one independent non-executive director if all other independent non-executive directors have a material interest in the relevant transaction or arrangement. If all the independent non-executive directors have a material interest in the relevant transaction or arrangement, no independent board committee can be formed. In that event, the independent financial adviser shall make its recommendation to the shareholders only in the manner prescribed under rule 13.39(7)(b).
                (7) In relation to any transactions that are subject to independent shareholders' approval pursuant to the Exchange Listing Rules or spin-off proposals that are subject to approval of the shareholders of the issuer pursuant to paragraph 3 (e) of Practice Note 15 of the Exchange Listing Rules, the circular to shareholders must contain at least:
                (a) if applicable, a separate letter from the independent board committee advising shareholders as to whether the terms of the relevant transaction or arrangement are fair and reasonable and whether such a transaction or arrangement is in the interests of the issuer and its shareholders as a whole and advising shareholders on how to vote, taking into account the recommendations of the independent financial adviser; and
                (b) a separate letter from the independent financial adviser containing its recommendation to the independent board committee and shareholders (or, if applicable, to the shareholders only) as to whether the terms of the relevant transaction or arrangement are fair and reasonable and whether such a transaction or arrangement is in the interests of the issuer and its shareholders as a whole and advising shareholders on how to vote. Such letter must set out the reasons for and the key assumptions made and factors taken into consideration in forming that opinion.
                (8) For any connected transactions, the requirements relating to the opinion and recommendation of the independent board committee and the independent financial adviser are set out in Chapter 14A.

                Note: "Independent shareholders" under paragraphs (6) and (7) of this rule 13.39 means any shareholders other than controlling shareholders of the issuer and their associates or, where there are no controlling shareholders, any shareholders other than directors (excluding independent non-executive directors) and the chief executive of the issuer and their respective associates.

              • 13.40

                Parties that are required to abstain from voting in favour at the general meeting pursuant to rules 6.12(1), 6.13, 7.19(6)(a), 7.19(7), 7.19(8), 7.24(5)(a), 7.24(6), 7.24(7), 13.36(4)(a), 13.36(4)(b),14.90(2), 14.91(1) and 17.04(1) may vote against the resolution at the general meeting of the issuer provided that their intention to do so has been stated in the relevant listing document or circular to shareholders. Any such party may change his mind as to whether to abstain or vote against the resolution, in which case the issuer must, if it becomes aware of the change before the date of the general meeting, immediately despatch a circular to its shareholders or publish an announcement in accordance with rule 2.07C notifying its shareholders of the change and, if known, the reason for such change. Where the circular is despatched or the announcement is published less than 10 business days before the date originally scheduled for the general meeting, the meeting must be adjourned before considering the relevant resolution to a date that is at least 10 business days from the date of despatch or publication by the chairman or, if that is not permitted by the issuer's constitutional documents, by resolution to that effect.

              • 13.41

                Where under rules 13.40 or 13.73, a meeting is required to be adjourned by resolution, all shareholders are permitted to vote on that resolution. Any shareholders who would have been required to abstain from voting on any resolution that was to be proposed shall vote in favour of the resolution to adjourn the meeting.

              • 13.42

                The issuer must have an appropriate procedure in place to record that any parties that must abstain or have stated their intention to vote against the relevant resolution in the listing document, circular or announcement have done so at the general meeting.

            • Board meetings (13.43)

              • 13.43

                An issuer shall inform the Exchange and publish an announcement in accordance with rule 2.07C at least seven clear business days in advance of the date fixed for any board meeting at which the declaration, recommendation or payment of a dividend is expected to be decided or at which any announcement of the profits or losses for any year, half-year or other period is to be approved for publication.

            • Voting of directors at board meetings (13.44)

              • 13.44

                Subject to the exceptions set out in paragraphs (1), (2), (4) and (5) of Note 1 to Appendix 3, a director of the issuer shall not vote on any board resolution approving any contract or arrangement or any other proposal in which he or any of his close associates has a material interest nor shall he be counted in the quorum present at the meeting.

                Note: The references to "close associate" shall be changed to "associate" where the transaction or arrangement is a connected transaction under Chapter 14A.

            • After board meetings (13.45)

              • 13.45

                An issuer shall inform and announce immediately after approval by or on behalf of the board of:—

                (1) any decision to declare, recommend or pay any dividend or to make any other distribution on its listed securities, including the rate and amount of the dividend or distribution and the expected payment date;
                (2) any decision not to declare, recommend or pay any dividend which would otherwise have been expected to have been declared, recommended or paid in due course;
                (3) any preliminary announcement of profits or losses for any year, half-year or other period;

                Notes:
                1. The timing of board meetings is a matter for the convenience and judgement of individual boards, but decisions on dividends and results should be announced either between 12:00 noon and 12:30 p.m. or after the market closes at 4:30 p.m. on a normal business day. On the eves of Christmas, New Year and the Lunar New Year when there is no afternoon trading session, the announcements should be published after the market closes at 12:30 p.m.. The directors are reminded that it is their direct responsibility to ensure that such information is kept strictly confidential until it is announced.
                2. Note 1 above is also applicable to a preliminary announcement of results for a full year. As soon as possible after draft accounts have been agreed with the auditors, those accounts, adjusted to reflect any dividend decision, should be approved as the basis of a preliminary announcement of results for the full year.
                3. If there is any change to the expected payment date previously disclosed under rule 13.45(1) or this note, the issuer should announce this fact and the new expected payment date as soon as practicable.
                (4) any proposed change in the capital structure, including any redemption of its listed securities; and

                Note: Once a decision has been made to submit any such proposal to the board, no dealings in any of the relevant securities should be effected by or on behalf of the issuer or any of its subsidiaries until the proposal has been announced or abandoned.
                (5) any decision to change the general character or nature of the business of the issuer or group.

                Note: In discharging the obligations in rule 13.45, regard should be had to rule 13.79, and in particular to the Exchange's requirements from time to time in respect of the communication of information of an urgent nature.

          • Disclosure of Financial Information

            • Distribution of annual report and accounts (13.46)

              • 13.46

                (1) In the case of an issuer (other than an overseas issuer and a PRC issuer):—
                (a) Such issuer shall send to
                (i) every member of the issuer; and
                (ii) every other holder of its listed securities (not being bearer securities),
                a copy of either (A) its annual report including its annual accounts and, where the issuer prepares consolidated financial statements referred to in section 379(2) of the Companies Ordinance, the consolidated financial statements, together with a copy of the auditors' report thereon, or (B) its summary financial report not less than 21 days before the date of the issuer's annual general meeting and in any event not more than four months after the end of the financial year to which they relate. The issuer may send a copy of its summary financial report to a member and a holder of its listed securities in place of a copy of its annual report and accounts, provided that it complies with the relevant provisions set out in sections 437 to 446 of the Companies Ordinance and in the Companies (Summary Financial Reports) Regulation.
                (b) Nothing in rule 13.46(1)(a) shall require an issuer to send any of the documents referred to therein to:—
                (i) a person of whose address the issuer is unaware; or
                (ii) more than one of the joint holders of any of its listed securities.

                Notes:
                1. The directors' report, auditors' report, annual accounts and, where applicable, summary financial report must be in the English language and must be accompanied by a Chinese translation. In respect of overseas members, it shall be sufficient for the issuer to mail an English language version of either (i) its directors' report, auditors' report and annual accounts or (ii) its summary financial report if such documents contain a prominent statement in both English and Chinese to the effect that a Chinese translation is available from the issuer, on request.
                2. Sections 429 and 431 of the Companies Ordinance require the directors of a Hong Kong issuer to lay the issuer's annual financial statements before its members at its annual general meeting within the period of 6 months after the end of the financial year or accounting reference period to which the annual financial statements relate.
                3. If an issuer has significant interests outside Hong Kong it may apply for an extension of the six-month period. However, attention is drawn to section 431 of the Companies Ordinance which requires any extension of the time limit to be approved by the Court of First Instance.
                4. [Repealed 1 January 2011]
                (2) In the case of an overseas issuer or a PRC issuer:—
                (a) Such issuer shall send to:—
                (i) every member of the issuer; and
                (ii) every other holder of its listed securities (not being bearer securities),
                a copy of either (A) its annual report including its annual accounts and, where the issuer prepares group accounts, its group accounts, together with a copy of the auditors' report thereon or (B) its summary financial report, not less than 21 days before the date of the issuer's annual general meeting and in any event not more than four months after the end of the financial year to which they relate. The issuer may send a copy of its summary financial report to a member and a holder of its listed securities in place of a copy of its annual report and accounts, provided that it complies with provisions no less onerous than the relevant provisions set out in sections 437 to 446 of the Companies Ordinance and in the Companies (Summary Financial Reports) Regulation for listed issuers incorporated in Hong Kong.
                (b) An issuer should lay its annual financial statements before its members at its annual general meeting within the period of 6 months after the end of the financial year or accounting reference period to which the annual financial statements relate.
                (c) Nothing in rule 13.46(2)(a) shall require an issuer to send any of the documents referred to therein to:—
                (i) a person of whose address the issuer is unaware; or
                (ii) more than one of the joint holders of any of its listed securities.

                Notes:
                1. If an issuer's primary listing is or is to be on the Exchange the annual report, annual accounts, auditors' report and, where applicable, summary financial report must be in the English language and must be accompanied by a Chinese translation. In respect of overseas members, it shall be sufficient for the issuer to mail an English language version of its annual report, annual accounts, auditors' report and, where applicable, summary financial report if such documents contain a prominent statement in both English and Chinese to the effect that a Chinese translation is available from the issuer, on request. If the issuer's primary listing is or is to be on another stock exchange such documents must be in the English language or be accompanied by a certified English translation.
                2. If an issuer has significant interests outside Hong Kong it may apply for an extension of the six month period.
                3. [Repealed 1 January 2011]

            • Annual Reports (13.47)

              • 13.47

                An issuer's annual report must comply with the provisions set out in Appendix 16 in relation to annual reports. The issuer's summary financial report must comply with the provisions set out in the Companies (Summary Financial Reports) Regulation.

                Note: Issuers' attention is drawn to paragraphs 6 to 34A and 50 inclusive of Appendix 16.

            • Interim Reports (13.48)

              • 13.48

                (1) In respect of the first six months of each financial year of an issuer unless that financial year is of six months or less, the issuer shall send to the persons listed in rule 13.46(1), either (i) an interim report, or (ii) a summary interim report not later than three months after the end of that period of six months. The issuer may send a copy of its summary interim report to a member and a holder of its listed securities in place of a copy of its interim report, provided that such summary interim report complies with the relevant provisions of the Companies (Summary Financial Reports) Regulation governing summary financial reports.
                (2) The interim report must comply with the provisions set out in Appendix 16 in relation to interim reports. The summary interim report must comply with the provisions set out in Appendix 16 in relation to summary interim reports.

                Note: Issuers' attention is drawn to paragraphs 37 to 44 and 51 inclusive of Appendix 16.
                (3) [Repealed 1 January 2011]

            • Preliminary Announcements of Results — Full Financial Year (13.49)

              • 13.49

                (1) An issuer shall publish in accordance with rule 2.07C its preliminary results in respect of each financial year as soon as possible, but in any event not later than the time that is 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the next business day after approval by or on behalf of the board. The issuer must publish such results not later than three months after the end of the financial year.
                (2) The preliminary announcement shall be based on the issuer's financial statements for the financial year which shall have been agreed with the auditors.
                (3)
                (i) Where an issuer is unable to make an announcement of its preliminary results based on its financial statements in accordance with rules 13.49(1) and 13.49(2), it must make an announcement not later than three months after the end of the financial year.

                The announcement must contain at least the following information:—
                (a) a full explanation for its inability to make an announcement based on financial statements which have been agreed with the auditors. Where there are uncertainties arising from the lack of supporting evidence or relating to the valuation of assets or liabilities, sufficient information to allow investors to determine the significance of the assets or liabilities;
                (b) the expected date of announcement of the financial results for the financial year which shall have been agreed with the auditors; and
                (c) so far as the information is available, results for the financial year based on financial results which have yet to be agreed with the auditors. Where possible, those results must have been reviewed by the issuer's audit committee. In the event that the audit committee disagreed with an accounting treatment which had been adopted or the particulars published in accordance with rule 13.49(3)(i)(a), full details of such disagreement.
                (ii) Where an issuer makes an announcement in accordance with rule 13.49(3)(i), then:
                (a) the issuer will be required to comply with the requirements set out in rule 13.49(2), as soon as the financial results for the financial year have been agreed with the auditors; and
                (b) where the financial results for the financial year which have been agreed by the auditors differ materially from the financial results published by the issuer in accordance with rule 13.49(3)(i)(c), full particulars of, and reasons for, the difference must be set out in the preliminary announcement of such agreed results.
                (4) The preliminary announcement of results (made in accordance with rule 13.49(2) or 13.49(3)) must comply with the provisions set out in Appendix 16 in relation to preliminary announcements of results for the full financial year.

                Note: Issuers' attention is drawn to paragraphs 45 and 45A of Appendix 16.
                (5) [Repealed 25 June 2007]

                Preliminary Announcements of Results — First Half of The Financial Year
                (6) The issuer shall publish in accordance with rule 2.07C a preliminary announcement in respect of its results for the first six months of each financial year, unless that financial year is of six months or less, as soon as possible, but in any event not later than the time that is 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the next business day after approval by or on behalf of the board. The issuer must publish such results not later than two months after the end of that period of six months.

                In circumstances where the issuer is unable to make such an announcement, the issuer must make an announcement within the required time referred to above. The announcement must contain:—
                (i) a full explanation for its inability to make an announcement based on unaudited financial statements; and
                (ii) the expected date of announcement of the unaudited results for the first half of the financial year.
                (7) The preliminary announcement of interim results must comply with the provisions set out in Appendix 16 in relation to preliminary announcements of interim results.

                Note: Issuers' attention is drawn to paragraph 46 of Appendix 16.
                (8) [Repealed 25 June 2007]

            • Suspension on Failure to Publish Timely Financial Information (13.50)

              • 13.50

                Without prejudice to the generality of rules 13.46, 13.47, 13.48 and 13.49, the Exchange will normally require suspension of trading in an issuer's securities if an issuer fails to publish periodic financial information in accordance with the Exchange Listing Rules. The suspension will normally remain in force until the issuer publishes an announcement in accordance with rule 2.07C containing the requisite financial information.

          • Notification

            • Changes (13.51)

              • 13.51

                An issuer must publish an announcement as soon as practicable in regard to:—

                (1) any proposed alteration of the issuer's memorandum or articles of association or equivalent documents, and in the case of a PRC issuer, any proposed request by the PRC issuer to a PRC competent authority to waive or otherwise modify any provision of the Regulations.

                The circular for any such amendments proposed by the issuer must contain an explanation of the effect of the proposed amendments and the full terms of the proposed amendments. At the same time as the circular is despatched to shareholders of the issuer, the issuer should submit to the Exchange (a) a letter addressed to the issuer from its legal advisers confirming that the proposed amendments conform with the requirements of the Exchange Listing Rules, where applicable, and the laws of the place where it is incorporated or otherwise established; and (b) a confirmation from the issuer that there is nothing unusual about the proposed amendments for a company listed in Hong Kong;

                Notes:
                1. Changes to the relevant parts of the articles of association or equivalent documents must conform with the requirements of Appendix 3 and, if relevant, Appendix 13.
                2. An issuer shall not at any time permit or cause any amendment to be made to its memorandum or articles of association or bye-laws which would cause the same to cease to comply with the provisions of Appendix 3 or Section 1 of Part A or Part B (where appropriate) of Appendix 13.
                (2) any changes in its directorate or supervisory committee, and shall procure that each new director or supervisor or member of its governing body shall sign and lodge with the Exchange as soon as practicable after their appointment a declaration and undertaking in the form set out in Form B,H or I, where applicable in Appendix 5.

                Where a new director, supervisor or chief executive is appointed or the resignation, re-designation, retirement or removal of a director, supervisor or chief executive takes effect, the issuer must announce the change as soon as practicable and include the following details of any newly appointed or re-designated director, supervisor or chief executive in the announcement:—
                (a) the full name (which should normally be the same as that stated in the declaration and undertaking of the director or supervisor in the form set out in Form B, H or I in Appendix 5) and age;
                (b) positions held with the issuer and other members of the issuer's group;
                (c) experience including (i) other directorships held in the last three years in public companies the securities of which are listed on any securities market in Hong Kong or overseas, and (ii) other major appointments and professional qualifications;
                (d) length or proposed length of service with the issuer;
                (e) relationships with any directors, senior management or substantial or controlling shareholders of the issuer;
                (f) his interests in shares of the issuer within the meaning of Part XV of the Securities and Futures Ordinance;
                (g) amount of the director's, supervisor's or chief executive's emoluments and the basis of determining the director's, supervisor's or chief executive's emoluments (including any bonus payments, whether fixed or discretionary in nature, irrespective of whether the director, supervisor or chief executive has or does not have a service contract) and how much of these emoluments are covered by a service contract;
                (h) full particulars of any public sanctions made against him by statutory or regulatory authorities;
                (i) where he has at any time been adjudged bankrupt or insolvent, the Court by which he was adjudged bankrupt or insolvent and, if discharged, the date and conditions on which he was granted his discharge;
                (j) where he has at any time been a party to a deed of arrangement or entered into any other form of arrangement or composition with his creditors, full particulars of the deed of arrangement or the arrangement or composition with his creditors;
                (k) full particulars of any unsatisfied judgments or court orders of continuing effect against him;
                (l) where any enterprise, company or unincorporated business enterprise has been dissolved or put into liquidation (otherwise than by a members' voluntary winding up when the company, in the case of a Hong Kong company, was solvent) or bankruptcy or been the object of an analogous proceeding, or entered into any form of arrangement or composition with creditors, or had a receiver, trustee or similar officer appointed over it (i) during the period when he was one of its directors or, in the case of an enterprise, a company or an unincorporated business enterprise established in the PRC, during the period when he was one of its directors, supervisors or managers, or (ii) within 12 months after his ceasing to act as one of its directors, supervisors or managers, as the case may be, full particulars, including the name of the enterprise, company or unincorporated business enterprise, its place of incorporation or establishment, the nature of its business, the nature of the proceeding involved, the date of commencement of the proceeding and the amounts involved together with an indication of the outcome or current position of the proceeding;
                (m) subject to the provisions of the Rehabilitation of Offenders Ordinance or comparable legislation of other jurisdictions, full particulars of any conviction for any offence (including details of each such offence, the court by which he was convicted, the date of conviction and the penalty imposed):
                (i) involving fraud, dishonesty or corruption;
                (ii) under the Companies Ordinance, the Companies (Winding Up and Miscellaneous Provisions) Ordinance, the Bankruptcy Ordinance, the Banking Ordinance, the Securities and Futures Ordinance, the repealed Protection of Investors Ordinance, the repealed Securities Ordinance, the repealed Securities (Disclosure of Interests) Ordinance, the Commodity Exchanges (Prohibition) Ordinance, the repealed Securities and Futures Commission Ordinance, the repealed Commodities Trading Ordinance, the repealed Stock Exchanges Unification Ordinance, the repealed Securities and Futures (Clearing Houses) Ordinance, the repealed Exchanges and Clearing Houses (Merger) Ordinance, the repealed Securities (Insider Dealing) Ordinance, the repealed Leveraged Foreign Exchange Trading Ordinance or any Ordinance relating to taxation, and any comparable legislation of other jurisdictions; or
                (iii) in respect of which he has, within the past 10 years, been sentenced as an adult to a period of imprisonment of six months or more, including suspended or commuted sentences;
                (n) full particulars where:
                (i) he has been identified as an insider dealer under Parts XIII or XIV of the Securities and Futures Ordinance or the repealed Securities (Insider Dealing) Ordinance at any time;
                (ii) any enterprise, company or unincorporated business enterprise with which he was or is connected (as defined in Parts XIII or XIV of the Securities and Futures Ordinance or the repealed Securities (Insider Dealing) Ordinance) or any enterprise, company or unincorporated business enterprise for which he acts or has acted as an officer, supervisor or manager has been identified as an insider dealer under Parts XIII or XIV of the Securities and Futures Ordinance or the repealed Securities (Insider Dealing) Ordinance at any time during the period when he was connected and/or acted as an officer, supervisor or manager;
                (iii) he has been found guilty of or been involved in insider dealing, or been held by any Court or competent authority to have breached any securities or financial markets laws, rules or regulations including any rules and regulations of any securities regulatory authority, stock exchange or futures exchange at any time;
                (iv) any enterprise, company or unincorporated business enterprise in which he was or is a controlling shareholder (as defined in the Listing Rules) or was or is a supervisor, manager, director or officer or has been found guilty of or been involved in insider dealing, or been held by any Court or competent authority to have breached any securities or financial markets laws, rules or regulations including any rules and regulations of any securities regulatory authority, stock exchange or futures exchange at any time during the period when he was a controlling shareholder, supervisor, manager, director or officer; or
                (v) he has been found by the Market Misconduct Tribunal, any Court or competent authority to have breached an obligation under the Inside Information Provisions, or where any issuer of which he was or is a controlling shareholder (as defined in the Listing Rules) or was or is a supervisor, manager, director, chief executive or officer has been found by the Market Misconduct Tribunal, any Court or competent authority to have breached an obligation under the Inside Information Provisions at any time during the period when he was a controlling shareholder, supervisor, manager, director, chief executive or officer;
                (o) where he has been adjudged by a Court or arbitral body civilly liable for any fraud, breach of duty or other misconduct by him involving dishonesty, full particulars of the judgement;
                (p) where any enterprise, company, partnership or unincorporated business enterprise of which he was or is a partner, director, supervisor or manager has had its business registration or licence revoked at any time during the period when he was one of its partners, directors, supervisors or managers, full particulars of such revocation, including the date upon which such registration or licence was revoked, the reasons for the revocation, the outcome and current position;
                (q) where he has at any time been disqualified from holding, or deemed unfit to hold, the position of director, supervisor or manager of an enterprise, a company or an unincorporated business enterprise, or from being involved in the management or conduct of the affairs of any enterprise, company or unincorporated business enterprise, pursuant to any applicable law, rule or regulation or by any competent authority, full particulars of such disqualification or ruling;
                (r) except where such disclosure is prohibited by law, full particulars of any investigation by any judicial, regulatory or governmental authority to which he is subject, including the investigating body, the nature of the investigation and the matters under investigation;
                (s) where he has at any time been refused admission to membership of any professional body or been censured or disciplined by any such body to which he belongs or belonged or been disqualified from membership in any such body or has at any time held a practising certificate or any other form of professional certificate or licence subject to special conditions, full particulars of such refusal, censure, disciplinary action, disqualification or special conditions;
                (t) where he is now or has at any time been a member of a triad or other illegal society, full particulars;
                (u) except where such disclosure is prohibited by law, where he is currently subject to (i) any investigation, hearing or proceeding brought or instituted by any securities regulatory authority, including the Hong Kong Takeovers Panel or any other securities regulatory commission or panel, or (ii) any judicial proceeding in which violation of any securities law, rule or regulation is or was alleged, full particulars of such investigation, hearing or proceeding;
                (v) except where such disclosure is prohibited by law, where he is a defendant in any current criminal proceeding involving an offence which may be material to an evaluation of his character or integrity to be a director or supervisor of the issuer, full particulars of such proceeding;
                (w) any other matters that need to be brought to the attention of holders of securities of the issuer; and
                (x) where there is no information to be disclosed pursuant to any of the requirements of this rule 13.51(2), an appropriate negative statement to that effect.
                The issuer must also disclose in the announcement of resignation or removal of a director, supervisor or chief executive the reasons given by or to him for his resignation or removal (including, but not limited to, any information relating to his disagreement with the board and a statement whether or not there are any matters that need to be brought to the attention of holders of securities of the issuer).

                The issuer must notify the Exchange and publish an announcement on any important change in the holding of an executive office, including changes to any important functions or executive responsibilities of a director.
                (3) any change in the rights attaching to any class of listed securities and any change in the rights attaching to any shares into which any listed debt securities are convertible or exchangeable;
                (4) any change in its auditors or financial year end, the reason(s) for the change and any other matters that need to be brought to the attention of holders of securities of the issuer (including, but not limited to, information set out in the outgoing auditors' confirmation in relation to the change in auditors);

                Note: The issuer must state in the announcement whether the outgoing auditors have provided a confirmation that there are no matters that need to be brought to the attention of holders of securities of the issuer. If no such confirmation has been provided, the announcement must state the reason for this.
                (5) any change in its secretary, share registrar (including any change in overseas branch share registrar) or registered address or where applicable, agent for the service of process in Hong Kong or registered office or registered place of business in Hong Kong;

                Note: The new secretary must fulfil the requirements of rule 8.17.
                (6) any change in its Compliance Adviser; and

                Note: Refer to rule 3A.29.
                (7) any revision of interim reports, annual reports or summary financial reports, the reason leading to the revision of published financial reports, and the financial impacts, if any.

            • Inclusion of stock code in documents (13.51A)

              • 13.51A

                An issuer shall set out its stock code in a prominent position on the cover page or, where there is no cover page, the first page of all announcements, circulars and other documents published by it pursuant to these Exchange Listing Rules.

            • Provision of information in respect of and by directors, supervisors and chief executives (13.51B-13.51D)

              • 13.51B

                (1) Where, following implementation of this rule, there is a change in any of the information required to be disclosed pursuant to paragraphs (a) to (e) and (g) of rule 13.51(2) during the course of the director's, supervisor's or chief executive's term of office, the issuer must ensure that the change and the updated information regarding the director, supervisor or chief executive is set out in the next published annual or interim report of the listed issuer (whichever is the earlier).
                (2) Where, following implementation of this rule, there is a change in any of the information required to be disclosed pursuant to paragraphs (h) to (v) of rule 13.51(2) during the course of a director's, supervisor's or chief executive's term of office, the issuer must inform the Exchange and publish an announcement in accordance with rule 2.07C as soon as practicable setting out the updated information regarding the director, supervisor or chief executive and any other information concerning that change that needs to be brought to the attention of holders of the issuer's securities.
                (3) Without prejudice to the issuer's obligation to disclose financial information and biographical details of its directors, supervisors and chief executive(s) under Appendix 16, the disclosures required to be made by an issuer pursuant to paragraphs (1) and (2) are subject to the following exceptions and modifications:
                (a) for rule 13.51(2)(a), an issuer need not disclose the age of the director, supervisor or chief executive in its interim reports;
                (b) for rule 13.51(2)(d), an issuer need not disclose the length of service of a director, supervisor or chief executive;
                (c) for rule 13.51(2)(h), an issuer need not disclose any sanction imposed on it by the Exchange; and
                (d) for rule 13.51(2)(k), an issuer need not disclose the particulars of any unsatisfied judgments or court orders of continuing effect until the relevant judgment or court order becomes final.

              • 13.51C

                Directors, supervisors and chief executive(s) of an issuer must procure and/or assist the issuer to comply with rule 13.51(2) and rule 13.51B including, but not limited to, by immediately informing the issuer of the information referred to in paragraphs (a) to (x) of rule 13.51(2) and any change in the information referred to in paragraphs (a) to (w) of rule 13.51(2) which information concerns the director, supervisor or chief executive. In procuring and/or assisting the issuer in the publication of the information (whether in an announcement in accordance with rule 2.07C, or in an annual or interim report, as the case may be), the directors, supervisors and chief executive(s) concerned must accept responsibility for the accuracy of the information.

              • 13.51D

                The issuer must publish the procedures for shareholders to propose a person for election as a director on its website.

          • Announcements, Circulars and Other Documents

            • Review of documents (13.52-13.53)

              • 13.52

                Subject to rule 13.52A, where an issuer is obliged to publish any announcements, circulars or other documents for the purposes of the Exchange Listing Rules, the documents need not be submitted to the Exchange for review before they are issued unless the documents fall within rule 13.52(1) or (2).

                (1) The issuer shall submit to the Exchange copies of drafts of the following documents for review before they are issued:
                (a) listing document (including prospectus);
                (b) circular relating to cancellation or withdrawal of listing of listed securities;
                (c) circular relating to transaction or matter required under Chapter 14 of the Exchange Listing Rules;
                (d) circular relating to connected transaction (including continuing connected transaction) required under Chapter 14A of the Exchange Listing Rules;
                (e) circular to the issuer's shareholders seeking their approval of:
                (i) any transaction or arrangement under rule 13.36(1) or 13.39(7);
                (ii) any matter relating to share option scheme required under Chapter 17 of the Exchange Listing Rules; or
                (iii) [Repealed 1 October 2013]
                (iv) any warrant proposal under paragraph 4(c) of Practice Note 4 to the Exchange Listing Rules; or
                (f) circulars or offer documents issued by the issuer in connection with takeovers, mergers or offers.
                The issuer shall not issue such documents until the Exchange has confirmed that it has no further comments thereon.
                (2) The following transitional provisions apply to announcements set out in this rule and shall cease to have effect on such date as the Exchange may determine and promulgate.

                An issuer shall submit to the Exchange copies of drafts of the following announcements for review before they are issued:
                (a) announcement for any very substantial disposal, very substantial acquisition or reverse takeover under rules 14.34 and 14.35;
                (b) announcement for any transaction or arrangement under rules 14.89 to 14.91; or
                (c) announcement for any matter relating to a cash company under rules 14.82 and 14.83.
                The issuer shall not issue such announcements until the Exchange has confirmed that it has no further comments thereon.

                Notes:
                1. Four copies of each document are required, which should be submitted in sufficient time for review and, if necessary, re-submission prior to final printing.
                2. In the case of documents issued in connection with takeovers, mergers or offers covered by the Takeovers Code, the Exchange will pass its comments on the documents directly to the issuer and will at the same time provide a copy of such comments to the Commission.
                3. The Exchange reserves the right to require an issuer to issue a further announcement or document and/or take other remedial action, if the original document does not comply with the requirements of the Exchange Listing Rules.
                4. Where an announcement or advertisement of a new or further issue of securities contains a profit forecast, the provisions of rules 14.61 and 14.62 will apply.
                5. Any listing document, circular, announcement or notice issued by a listed issuer pursuant to the Exchange Listing Rules must contain on its front cover or inside front cover, or as a heading, a prominent and legible disclaimer statement as follows:—

                "Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this document, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this document."

              • 13.52A

                In addition to the specified requirements set out in rule 13.52, the Exchange has the right to request to review any announcements, circulars or other documents prior to publication in individual cases. In any such case, the Exchange will communicate to the issuer its direction to review the document prior to publication and the reasons for its decision. The issuer shall accordingly submit to the Exchange copies of drafts for review and shall not issue the document until the Exchange has confirmed that it has no further comments thereon.

              • 13.52B

                An issuer proposing to publish an announcement, circular or other document pursuant to the Exchange Listing Rules shall observe the following provisions:

                (1) Where the subject matter of the document may involve a change in or relate to or affect arrangements regarding trading in the issuer's listed securities (including a suspension or resumption of dealings, and a cancellation or withdrawal of listing), the issuer must consult the Exchange before the document is issued. The document must not include any reference to a specific date or specific timetable in respect of such matter which has not been agreed in advance with the Exchange.
                (2) If the issuer wishes to:
                (a) ascertain whether or to what extent any provisions in the Exchange Listing Rules apply to the document, or the transaction or matter to which it relates; or
                (b) request a modification or dispensation with any requirements of the Exchange Listing Rules in respect of the document, or the transaction or matter to which it relates,
                relevant details, including the reasons and circumstances that give rise to the issues concerned, must be submitted to the Exchange in sufficient time for its determination.

              • 13.53

                The issuer hereby authorises the Exchange to file "applications" (as defined in section 2 of the Statutory Rules) and those corporate disclosure materials within the meaning of sections 7(1) and (2) of the Statutory Rules received by the Exchange with the Commission pursuant to sections 5(2) and 7(3) of the Statutory Rules respectively. Applications and relevant corporate disclosure materials shall be filed with the Exchange in such manner and number of copies as the Exchange may from time to time prescribe. The authorisation aforementioned shall not be altered or revoked in any way unless prior written approval has been obtained from the Exchange and the Exchange shall have the absolute discretion to grant such approval. In addition, the issuer undertakes to execute such documents in favour of the Exchange perfecting the above authorisation as the Exchange may require.

            • Forwarding of documents, circulars, etc. (13.54)

              • 13.54

                An issuer (other than authorised Collective Investment Schemes) must, upon request by the Exchange, provide the requested number of certified copies of all resolutions of the issuer including resolutions concerning any of the matters in rule 13.36, except resolutions concerning any other routine business at an annual general meeting, within 15 days after they are passed.

            • Circulars to holders of securities (13.55)

              • 13.55

                (1) In the event of a circular being issued to the holders of any of the issuer's securities, the issuer shall issue a copy or summary of such circular to the holders of all its other securities (not being bearer securities) unless the contents of such circular are of no material concern to such other holders.

                Note: Where there is a class of listed securities in bearer form, it may be sufficient to publish an announcement in accordance with rule 2.07C referring to the circular and giving an address or addresses from which copies can be obtained.
                (2) All circulars sent to holders of the issuer's securities (and where an issuer's primary listing is or is to be on the Exchange, all circulars sent to holders of the issuer's securities on the Hong Kong register) must be in the English language and be accompanied by a Chinese translation. In respect of overseas members, it shall be sufficient for the issuer to mail an English language version of the circular if it contains a prominent statement in both English and Chinese to the effect that a Chinese translation of the circular is available from the issuer, on request. If the issuer's primary listing is or is to be on another stock exchange all circulars sent to holders of the issuer's securities must be in the English language or be accompanied by a certified translation.
                (3) [Repealed 1 January 2009]

            • Corporate Communications to Non Registered Holders of Securities (13.56)

              • 13.56

                An issuer shall, as soon as practicable following a request to HKSCC and at the expense of the issuer send to any Non Registered Holder (by means permitted by the Exchange Listing Rules) copies of any corporate communications.

                For the purposes of this rule, "Non Registered Holder" shall mean:—

                (i) such person or company whose listed securities are held in CCASS; and
                (ii) who has notified the issuer from time to time through HKSCC that such person or company wishes to receive corporate communications.

            • Increases in capital (13.57)

              • 13.57

                Where an increase in authorised capital is proposed, the directors must state in the explanatory circular or other document accompanying the notice of meeting whether they have any present intention of issuing any part of that capital.

          • Trading and Settlement

            • Certification of transfers (13.58)

              • 13.58

                An issuer shall:—

                (1) certify transfers against certificates or temporary documents and return them by the seventh day after the date of receipt; and
                (2) split and return renounceable documents by the third business day after the date of receipt.

                Note: Documents of title lodged for registration of probate should be returned with the minimum of delay, and, if possible, on the next business day following receipt.

            • Registration services (13.59)

              • 13.59

                (1) An issuer (or its registrar) must provide a standard securities registration service in accordance with rule 13.60(1). The issuer (or its registrar) may, but shall not be obliged to, provide an optional securities registration service in accordance with rule 13.60(2) and/or an expedited securities registration service in accordance with rule 13.60(3). The issuer (or its registrar) must also provide a bulk securities registration service in accordance with rule 13.60(4) and a certificate replacement service in accordance with rule 13.60(5). Subject to rule 13.59(2), the issuer shall ensure that where the issuer (or its registrar) charges a fee for registering transfers or cancelling, splitting, consolidating or issuing definitive certificates relating to the issuer's listed securities, such fee must not exceed, in total, the applicable amounts prescribed in rule 13.60.
                (2) The issuer shall ensure that where the issuer (or its registrar) charges a fee for registering other documents relating to or affecting the title to the issuer's listed securities (e.g. probate, letters of administration, certificates of death or marriage, powers of attorney or other instruments or memoranda and articles of association in respect of a new corporate holder) or for marking or noting documents, such fee must not exceed HK$5 per item per register:

                Note: "per item" shall be defined to mean each of such other documents submitted for registration.
                (3) It is the responsibility of an issuer whose registrar is in breach of any of the above provisions or the provisions of rules 13.58, 13.60 or 13.61 to report such breach to the Exchange as soon as it becomes aware of the breach and the Exchange reserves the right to communicate such information to the Commission.
                (4) Save as provided above or in rule 13.60 the issuer shall not and shall use all reasonable endeavour to ensure that neither its registrar nor other agents will charge holders or transferees any other fees for any dealings with them in connection with the transfer or transmission of its listed securities.

                Note: In the case of a PRC issuer, the requirements of rule 13.59 shall apply only to registration of its securities listed on the Exchange.

            • Issue of certificates, registration and other fees (13.60)

              • 13.60

                (1)
                (a) Standard securities registration service: An issuer shall (or shall procure that its registrar shall) issue definitive certificates arising out of a registration of transfer or the cancelling, splitting, consolidating or issuing (otherwise than pursuant to rule 13.60(5)) of certificates within:—
                (i) 10 business days of the date of expiration of any right of renunciation; or
                (ii) 10 business days of the receipt of properly executed transfer or other relevant documents or the relevant certificates.
                (b) The fee for registration pursuant to the standard securities registration service shall not exceed, in total, the higher of the following:—
                (i) HK$2.50 multiplied by the number of certificates issued; or
                (ii) HK$2.50 multiplied by the number of certificates cancelled.
                (2)
                (a) Optional securities registration service: The issuer (or its registrar) may, but shall not be obliged to, provide an optional securities registration service under which definitive certificates are required to be issued within:—
                (i) 6 business days of the date of expiration of any right of renunciation; or
                (ii) 6 business days of the receipt of properly executed transfer or other relevant documents or the relevant certificates.
                (b) The fee for registration pursuant to the optional securities registration service shall not exceed, in total, the higher of the following:—
                (i) HK$3.00 multiplied by the number of certificates issued; or
                (ii) HK$3.00 multiplied by the number of certificates cancelled.
                (c) If the issuer (or its registrar) fails to effect any registration within the period of 6 business days specified in rule 13.60(2)(a), the fee for such registration shall be that determined in accordance with rule 13.60(1)(b).
                (3)
                (a) Expedited securities registration service: The issuer (or its registrar) may, but shall not be obliged to, provide an expedited securities registration service under which definitive certificates are required to be issued within:—
                (i) 3 business days of the date of expiration of any right of renunciation; or
                (ii) 3 business days of the receipt of properly executed transfer or other relevant documents or the relevant certificates.
                (b) The fee for registration pursuant to the expedited securities registration service shall not exceed, in total, the higher of the following:
                (i) HK$20.00 multiplied by the number of certificates issued; or
                (ii) HK$20.00 multiplied by the number of certificates cancelled.
                (c) If the issuer (or its registrar) fails to effect any registration within the period of 3 business days specified in rule 13.60(3)(a), the registration shall be performed free of charge.
                (4)
                (a) Bulk securities registration service: The issuer shall (or shall procure that its registrar shall) provide a bulk securities registration service, for transfers of listed securities representing 2,000 or more board lots of the issuer's listed securities where the securities are being transferred from the name of a single holder into the name of another or the same single holder. Certificates shall be issued pursuant to the bulk securities registration service within 6 business days of the receipt of properly executed transfers or other relevant documents or the relevant certificates.
                (b) The fee for registration pursuant to the bulk securities registration service shall not exceed, in total, the higher of the following:—
                (i) HK$2.00 multiplied by the number of certificates issued; or
                (ii) HK$2.00 multiplied by the number of certificates cancelled.
                (5) Certificate replacement service: The issuer shall (or shall procure that its registrar shall) provide a certificate replacement service. The fee for replacing certificates:—
                (a) representing securities with a market value of HK$200,000 or less (at the time the request for replacement is made) for a person named on the register shall not exceed HK$200.00, plus the costs incurred by the issuer (or its registrar) in publishing the required public notice; or
                (b) either:
                (i) representing securities with a market value of more than HK$200,000 (at the time the request for replacement is made); or
                (ii) for a person not named on the register (irrespective of the market value of the securities concerned);
                shall not exceed HK$400.00, plus the costs incurred by the issuer (or its registrar) in publishing the required public notice.
                (6) For the purposes of this rule 13.60 only:—
                (a) the expression "business day" shall exclude Saturdays, Sundays and public holidays in Hong Kong; and
                (b) in computing any period of business days, such period shall be inclusive of the business day on which the relevant transfers, certificates or other documents were received (or, if such documents were not received on a business day, the business day next following their receipt) and of the business day on which the relevant certificates were delivered or otherwise made available.

                Note: In the case of a PRC issuer, the requirements of rule 13.60 shall apply only to registration of its securities listed on the Exchange.
                (7) References in rules 13.59 and 13.60 to the issuer's registrar providing a service, or to the issuer procuring that its registrar shall provide a service, shall not relieve the issuer of any obligations in respect of any acts or omissions of its registrar.

            • Designated accounts (13.61)

              • 13.61

                An issuer shall, if requested by holders of securities, arrange for designated accounts.

            • Registration arrangements (13.62)

              • 13.62

                In connection with rules 13.58, 13.59, 13.60 and 13.61 if the issuer does not maintain its own registration department, appropriate arrangements must be made with the registrars to ensure compliance with the provisions of such rules.

            • Bearer warrants (13.63)

              • 13.63

                Where share warrants to bearer have been issued or the articles of association or equivalent documents of the issuer authorise the issue of share warrants to bearer but none have yet been issued, the issuer shall:—

                (1) issue such warrants in exchange for registered share certificates (and vice versa) within 14 days of the deposit of the share certificates (or warrants); and
                (2) certify transfers against the deposit of warrants within 14 days of receipt.

            • Trading limits (13.64)

              • 13.64

                Where the market price of the securities of the issuer approaches the extremities of HK$0.01 or HK$9,995.00, the Exchange reserves the right to require the issuer either to change the trading method or to proceed with a consolidation or splitting of its securities.

            • Change in Board Lot Size (13.65)

              • 13.65

                In the event of any amendment to an issuer's capital structure (such as a consolidation of shares) or any amendment to the board lot size, the Exchange reserves the right to request that adequate arrangements are made to enable resulting odd lot holders either to dispose of their odd lots or to round them up to a board lot. It may be appropriate for the issuer to appoint a broker as its agent to match the sales and purchases of odd lots or for the major shareholder itself or by its agent to stand in the market to buy or sell odd lot securities. The particular circumstances of an issuer may dictate the method by which odd lot holders are to be accommodated and issuers are urged to consult the Exchange at the earliest opportunity to agree the appropriate trading method.

            • Closure of books and record date (13.66)

              • 13.66

                (1) An issuer must announce any closure of its transfer books or register of members in respect of securities listed in Hong Kong at least six business days before the closure for a rights issue, or 10 business days before the closure in other cases. In cases where there is an alteration of book closing dates, the issuer must, at least five business days before the announced closure or the new closure, whichever is earlier, notify the Exchange in writing and make a further announcement. If, however, there are exceptional circumstances (e.g. a typhoon) that render the giving of the notification to the Exchange and publication of the announcement impossible, the issuer must comply with the requirements as soon as practicable. Where the issuer decides on a record date without book closure, these requirements apply to the record date.
                (2) An issuer must ensure that the last day for trading in the securities with entitlements falls at least one business day after the general meeting, if the entitlements require the approval of shareholders in the general meeting or are contingent on a transaction that is subject to the approval of shareholders in the general meeting. This rule shall not apply where the issuer announces the timetable of an entitlement on or before 19 June 2011.

                Notes:
                1. See Practice Note 8 for emergency share registration arrangements during a typhoon and/or a black rainstorm warning.
                2. In addition, for a rights issue, the issuer must provide at least two trading days for trading in the securities with entitlements (i.e. before the ex-date) after publication of the book closure. If trading on the Exchange is interrupted due to a typhoon and/or a black rainstorm warning, the book-close date will be automatically postponed, where necessary, to provide at least two trading days (during neither of which trading is interrupted) for trading of the securities with entitlements during the notice period. In these circumstances the issuer must publish an announcement on the revised timetable.
                3. For the purposes of rule 13.66(2),
                •   the record date (when there is no book closure) or the last registration date (when there is a book closure) must be at least three business days after the general meeting; and
                •   if the issuer fails to publish the result of the poll conducted in the general meeting in the manner prescribed under rule 13.39(5), it must ensure there is at least one trading day for trading in the securities with entitlements after publication of the results of the poll. The issuer must publish an announcement on any revised timetable.

          • General

            • Directors' dealings (13.67)

              • 13.67

                An issuer shall adopt rules governing dealings by directors in listed securities of the issuer on terms no less exacting than those of the Model Code set out in Appendix 10 issued by the Exchange. The Model Code sets out the standard which the Exchange requires the issuer and its directors to meet and any breach of such required standard will be a breach of the Exchange Listing Rules. The issuer may adopt its own code on terms no less exacting than those set out in the Model Code. Any breach of its own code will not be a breach of the Exchange Listing Rules unless it is also a breach of the required standard under the Model Code.

            • Directors' service contracts (13.68-13.69)

              • 13.68

                An issuer shall obtain the prior approval of its shareholders of the issuer in a general meeting (at which the relevant director and his associates shall not vote on the matter) for any service contract to be granted by the issuer or any of its subsidiaries to any director or proposed director of the issuer or to any director or proposed director of any of its subsidiaries which:

                (a) is for a duration that may exceed three years; or
                (b) in order to entitle the issuer to terminate the contract, expressly requires the issuer to give a period of notice of more than one year or to pay compensation or make other payments equivalent to more than one year's emoluments.

                The remuneration committee of the issuer (if any and provided that such committee has a majority of independent non-executive directors) or an independent board committee shall form a view in respect of service contracts that require shareholders' approval and advise shareholders (other than shareholders who are directors with a material interest in the service contracts and their associates) as to whether the terms are fair and reasonable, advise whether such contracts are in the interests of the issuer and its shareholders as a whole and advise shareholders on how to vote. An independent non-executive director who has a material interest in any such contracts shall not sit on the independent board committee.

                Note: A contract is relevant whether or not reduced to writing. A service contract is relevant whether granted by the issuer or any of its subsidiaries. A service contract not for a fixed period is to be regarded as running at least until the earliest date on which it can lawfully be determined by the employing company without payment of compensation (other than statutory compensation). Where an arrangement exists under which a director can require the issuer or any of its subsidiaries to enter into a further service contract with him, the arrangement will be regarded as a provision for extending the period of his existing service contract and taken into account in determining its duration.

              • 13.69

                Directors' service contracts entered into by the issuer or any of its subsidiaries in accordance with the Exchange Listing Rules on or before 31 January, 2004 are exempt from the shareholders' approval requirement under rule 13.68. Upon any variation as to duration or payment on termination or any other material terms of the directors' service contracts or renewal of any such directors' service contracts, the issuer must comply in full with the requirements set out in rule 13.68 in respect of the service contracts effected after such variation or renewal. Pursuant to paragraph 14A of Appendix 16, the issuer must include particulars of any service contracts that are exempt under this rule in its annual reports during the term of any such service contracts.

            • Nomination of directors (13.70)

              • 13.70

                The issuer shall publish an announcement in accordance with rule 2.07C or issue a supplementary circular upon receipt of a notice from a shareholder to propose a person for election as a director at the general meeting where such notice is received by the issuer after publication of the notice of meeting. The issuer shall include particulars of the proposed director in the announcement or supplementary circular.

                Note: The issuer must assess whether or not it is necessary to adjourn the meeting of the election to give shareholders at least 10 business days to consider the relevant information disclosed in the announcement or supplementary circular.

            • Notices (13.71-13.74)

              • 13.71

                An issuer shall send notices to all holders of its listed securities whether or not their registered address is in Hong Kong.

              • 13.72

                Any notice to be given by an issuer under this Chapter shall be in writing and any notice to the holder of a bearer security may be given by being published in accordance with rule 2.07C.

              • 13.73

                In addition to any direction of the court, the issuer shall ensure that notice of every meeting of its shareholders or its creditors concerning the issuer (e.g. for winding up petitions, schemes of arrangement or capital reduction) is published in accordance with rule 2.07C. The issuer shall despatch a circular to its shareholders at the same time as (or before) the issuer gives notice of the general meeting to approve the transaction referred to in the circular. The issuer shall provide its shareholders with any material information on the subject matter to be considered at a general meeting that comes to the directors' attention after the circular is issued. The issuer must provide the information either in a supplementary circular or by way of an announcement in accordance with rule 2.07C not less than 10 business days before the date of the relevant general meeting to consider the subject matter. The meeting must be adjourned before considering the relevant resolution to ensure compliance with this 10 business day requirement by the chairman or, if that is not permitted by the issuer's constitutional documents, by resolution to that effect (see also rule 13.41).

                Note: The issuer must assess the scale of revisions or updating required and materiality of the new information, revisions or updating required that has come to its attention since publication of the circular when deciding whether to issue a revised or supplementary circular or to publish an announcement in accordance with rule 2.07C. Where the revisions or updating required are significant, the issuer must consider carefully whether it would be better to publish a revised or supplementary circular rather than provide particulars of the changes in an announcement. The issuer should not overwhelm or confuse investors with lengthy announcements describing changes to information contained in the original circular.

              • 13.74

                The issuer shall also disclose the details required under rule 13.51(2) of any directors proposed to be re-elected or proposed new director in the notice or accompanying circular to its shareholders of the relevant general meeting, if such re-election or appointment is subject to shareholders' approval at that relevant general meeting (including, but not limited to, an annual general meeting).

            • Equality of treatment (13.75)

              • 13.75

                An issuer shall ensure equality of treatment for all holders of securities of the same class who are in the same position (except, in the case of a PRC issuer, to the extent otherwise provided in the PRC issuer's articles of association).

            • Use of Airmail (13.76)

              • 13.76

                Where this Chapter requires anything to be sent by any person in Hong Kong to any person outside Hong Kong and vice versa, such thing shall be sent, where practicable, by airmail or an equivalent service that is no slower.

            • Directors' contact information (13.77-13.78)

              • 13.77

                An issuer shall inform the Exchange as soon as reasonably practicable of any change(s) in the contact information, including address(es) and telephone number(s), of its directors (and, in the case of a PRC issuer, supervisors).

              • 13.78

                If and when requested by the Exchange, an issuer shall use its best endeavours to assist the Exchange to locate the whereabouts of any director (or, in the case of a PRC issuer, supervisor) who has since resigned from his directorship in the issuer.

            • Communication with the Exchange (13.79)

              • 13.79

                References in this Chapter, Chapter 14 and Chapter 14A to informing the Exchange mean delivery of the relevant information to the Exchange in the manner determined by the Exchange from time to time and promulgated by way of a practice note to the Exchange Listing Rules.

            • Independent financial advisers (13.80-13.87)

              • 13.80

                An independent financial adviser appointed under rule 13.39(6)(b), rule 14A.44 or rule 19.05(6)(a)(iii) must take all reasonable steps to satisfy itself that:

                (1) it has a reasonable basis for making the statements required by rule 14A.45; and
                (2) without limiting the generality of paragraph (1) above, there is no reason to believe any of the following information is not true or omits a material fact:
                (a) any information relied on by the independent financial adviser in forming its opinion; or
                (b) any information relied on by any third party expert on whose opinion or advice the independent financial adviser relies in forming its opinion.

                Notes:

                1. For the purposes of this rule, the Exchange expects that the reasonable steps an independent financial adviser will typically perform will include the following:
                (a) obtaining all information and documents of the issuer relevant to an assessment of the fairness and reasonableness of the terms of the transaction, for example, if the transaction involves the purchase or sale of products or services, information and documents showing the prices at which the issuer buys and sells such products and services to independent third parties;
                (b) researching the relevant market and other conditions and trends relevant to the pricing of the transaction;
                (c) reviewing the fairness, reasonableness and completeness of any assumptions or projections relevant to the transaction;
                (d) without limiting the generality of paragraph (c) above, in relation to any third party expert providing an opinion or valuation relevant to the transaction:
                (i) interviewing the expert including as to its expertise and any current or prior relationships with the issuer, other parties to the transaction, and core connected persons of either the issuer or another party to the transaction;
                (ii) reviewing the terms of engagement (having particular regard to the scope of work, whether the scope of work is appropriate to the opinion required to be given and any limitations on the scope of work which might adversely impact on the degree of assurance given by the expert's report, opinion or statement); and
                (iii) where the independent financial adviser is aware the issuer or another party to the transaction has made formal or informal representations to the expert, assessing whether the representations are in accordance with the independent financial adviser's knowledge; and
                (e) if there have been any relevant alternative offers made (for example, offers made recently for the same asset), then reviewing and assessing such alternative offers and the reasons given, if any, by the management for rejecting these offers.
                2. The Exchange expects the independent financial adviser will ensure the letter referred to at rule 14A.45 takes account of the following principles:
                (a) the source for any fact which is material to an argument should be clearly stated, including sufficient detail to enable the significance of the fact to be assessed; however, if the fact has been included in a document recently sent to shareholders, an appropriate cross reference may instead be made;
                (b) a quotation (for example, from a newspaper or a stockbroker circular) should not be used out of context and details of the origin should be included. Since quotations will necessarily carry the implication that they are endorsed by the independent financial adviser, quotations should not be used unless the independent financial adviser has corroborated or substantiated them;
                (c) pictorial representations, charts, graphs and diagrams should be presented without distortion and, when relevant, should be to scale; and
                (d) any comparables referred to in a document must be a fair and representative sample. The bases for compiling such comparables must be clearly stated in the document.

              • 13.81

                The issuer must:

                (1) afford any independent financial adviser it appoints pursuant to rule 13.39(6)(b), rule 14A.44 or rule 19.05(6)(a)(iii) full access at all times to all persons, premises and documents relevant to the independent financial adviser's performance of its duties as set out in the Exchange Listing Rules. In particular, terms of engagement with experts retained to perform services related to the transaction should contain clauses entitling the independent financial adviser access to:
                (a) any such expert;
                (b) the expert's reports, draft reports (both written and oral), and terms of engagement;
                (c) information provided to or relied on by the expert;
                (d) information provided by the expert to the Exchange or Commission; and
                (e) all other correspondence exchanged between the issuer or its agents and the expert or between the expert, the issuer and the Exchange or Commission;
                Note: The Exchange expects that access to documents for the purposes of this rule would include the right to take copies of the documents without charge.
                (2) keep the independent financial adviser it appoints informed of any material change to any information previously given to or accessed by the independent financial adviser pursuant to paragraph (1) above; and
                (3) provide to or procure for the independent financial adviser all necessary consents to the provision of the information referred to in paragraphs (1) and (2) above to the independent financial adviser.

              • 13.82

                An independent financial adviser must be appropriately licensed by the Commission and must discharge its responsibilities with due care and skill.

              • 13.83

                An independent financial adviser must perform its duties with impartiality.

              • 13.84

                An independent financial adviser must be independent from any issuer for whom it acts. An independent financial adviser is not independent if any of the following circumstances exist as at the time of making the declaration required by rule 13.85(1):

                (1) the IFA group and any director or close associate of a director of the independent financial adviser holds, directly or indirectly, in aggregate more than 5% of the number of issued shares of the issuer, another party to the transaction, or a close associate or core connected person of the issuer or another party to the transaction;
                (1A) in the case of a connected transaction, the independent financial adviser holds more than 5% of the number of issued shares of an associate of another party to the transaction;
                (2) any member of the IFA group or any director or close associate of a director of the independent financial adviser is a close associate or core connected person of the issuer or another party to the transaction;
                (2A) in the case of a connected transaction, the independent financial adviser is an associate of another party to the transaction;
                (3) any of the following exceeds 10% of the total assets shown in the latest consolidated financial statements of the independent financial adviser's ultimate holding company or, where there is no ultimate holding company, the independent financial adviser:
                (a) the aggregate of:
                (i) amounts due to the IFA group from:
                (A) the issuer;
                (B) its subsidiaries;
                (C) its controlling shareholder; and
                (D) any close associates of its controlling shareholder; and
                (ii) all guarantees given by the IFA group on behalf of:
                (A) the issuer;
                (B) its subsidiaries;
                (C) its controlling shareholder; and
                (D) any close associates of its controlling shareholder;
                (b) the aggregate of:
                (i) amounts due from the IFA group to:
                (A) the issuer;
                (B) its subsidiaries; and
                (C) its controlling shareholder; and
                (ii) all guarantees given on behalf of the IFA group by:
                (A) the issuer;
                (B) its subsidiaries; and
                (C) its controlling shareholder;
                (c) the aggregate of:
                (i) amounts due from the IFA group to any of the following (referred to in this rule as "the Other Parties"):
                (A) another party to the transaction;
                (B) any holding company of another party to the transaction;
                (C) any subsidiary of any holding company of another party to the transaction;
                (D) any controlling shareholder of:
                (1) another party to the transaction; or
                (2) any holding company of another party to the transaction; and
                (E) any close associate of any controlling shareholder referred to in paragraph (D) above; and
                (ii) all guarantees given by any of the Other Parties on behalf of the IFA group; and
                (d) the aggregate of:
                (i) amounts due to the IFA group from any of the Other Parties; and
                (ii) all guarantees given by the IFA group on behalf of any of the Other Parties;
                (4) any of the following has a current business relationship with the issuer or another party to the transaction, or a director, subsidiary, holding company or substantial shareholder of the issuer or another party to the transaction, which would be reasonably considered to affect the independent financial adviser's independence in performing its duties as set out in the Exchange Listing Rules, or might reasonably give rise to a perception that the independent financial adviser's independence would be so affected, except where that relationship arises under the independent financial adviser's appointment to provide the advice:
                (a) any member of the IFA group;
                (b) an employee of the independent financial adviser who is directly engaged in providing the advice to the issuer;
                (c) a close associate of an employee of the independent financial adviser who is directly engaged in providing the advice to the issuer;
                (d) a director of any member of the IFA group; or
                (e) a close associate of a director of any member of the IFA group;
                (5) within 2 years prior to making the declaration pursuant to rule 13.85(1):
                (a) a member of the IFA group has served as a financial adviser to:
                (i) the issuer or its subsidiaries;
                (ii) another party to the transaction or its subsidiaries; or
                (iii) a core connected person of the issuer or another party to the transaction; or
                (b) without limiting paragraph (a), an employee or a director of the independent financial adviser who is directly engaged in providing the subject advice to the issuer:
                (i) was employed by or was a director of another firm that served as a financial adviser to any of the entities referred to at paragraphs (a)(i) to (a) (iii) above; and
                (ii) in that capacity, was directly engaged in the provision of financial advice to the issuer or another party to the transaction;
                (6) the independent financial adviser or a member of the IFA group is the issuer's auditor or reporting accountant.

                Notes:
                1. In addition to it being a breach of the Exchange Listing Rules, if it comes to the Exchange's attention that an independent financial adviser is not independent, the Exchange will not accept documents produced by that independent financial adviser for any purpose required under the Exchange Listing Rules in relation to the subject transaction.
                2. In calculating the percentage figure of shares that it holds or will hold for the purposes of sub-paragraphs (1), (2) and (4), an entity is not required to include an interest:
                (a) held by an investment entity on behalf of its discretionary clients;
                (b) held by a fund manager on a non-discretionary basis such as a managed account or managed fund;
                (c) held in a market-making capacity;
                (d) held in a custodial capacity;
                (e) in shares that would be disregarded for the purposes of Divisions 2 to 4 of Part XV of the Securities and Futures Ordinance under section 323 of that Ordinance; or
                (f) in shares held by a member of the entity's group that is an investment manager whose interest would not be aggregated with its holding company under section 316(2) of the Securities and Futures Ordinance by reason of the operation of section 316(5) of that Ordinance.
                For these purposes "investment manager" has the meaning given to it in section 316(7) of the Securities and Futures Ordinance.
                3. For the purposes of this rule, ultimate holding company means a holding company that itself does not have a holding company.

              • 13.85

                No later than the earlier of the independent financial adviser agreeing its terms of engagement with the issuer and the independent financial adviser commencing work as independent financial adviser to the issuer, the independent financial adviser must submit to the Exchange:

                (1) a declaration in the prescribed form set out in Appendix 21 to the effect that the independent financial adviser is independent, including a statement addressing each of the circumstances set out in rule 13.84; and
                (2) an undertaking, in the terms set out in Appendix 22 to:
                (a) comply with the Listing Rules; and
                (b) co-operate in any investigation conducted by the Listing Division and/or the Listing Committee of the Exchange, including answering promptly and openly any questions addressed to the independent financial adviser, promptly producing the originals or copies of any relevant documents and attending before any meeting or hearing at which the independent financial adviser is requested to appear.

              • 13.86

                Where an independent financial adviser or issuer becomes aware of a change in the circumstances set out in the declaration required by rule 13.85(1) during the period the independent financial adviser is engaged by the issuer, the independent financial adviser or issuer must notify the Exchange as soon as possible upon that change occurring.

              • 13.87

                Insofar as the Exchange Listing Rules impose a higher standard of conduct on independent financial advisers than that set out in the Commission's Corporate Finance Adviser Code of Conduct, the Code of Conduct, the Takeovers Code, the Share Buy-backs Code and all other relevant codes and guidelines applicable to them, the Exchange Listing Rules will prevail.

                Note: The Exchange also reminds independent financial advisers of their other statutory obligations including but not limited to those under the Securities and Futures Ordinance.

            • Appointment and removal of auditor prior to expiration of his term of office (13.88)

              • 13.88

                The issuer must at each annual general meeting appoint an auditor to hold office from the conclusion of that meeting until the next annual general meeting. The issuer must not remove its auditor before the end of the auditor's term of office without first obtaining shareholders' approval at a general meeting. An issuer must send a circular proposing the removal of the auditor to shareholders with any written representations from the auditor, not less than 10 business days before the general meeting. An issuer must allow the auditor to attend the general meeting and make written and/or verbal representations to shareholders at the general meeting.

            • Corporate Governance Code (13.89)

              • 13.89

                (1) The Corporate Governance Code in Appendix 14 sets out the principles of good corporate governance and two levels of recommendations: (a) code provisions; and (b) recommended best practices. Issuers are expected to comply with, but may choose to deviate from, the code provisions. The recommended best practices are for guidance only.

                Note: Issuers may also devise their own code on corporate governance practices on such terms as they may consider appropriate.
                (2) Issuers must state whether they have complied with the code provisions set out in the Corporate Governance Code for the relevant accounting period in their interim reports (and summary interim reports, if any) and annual reports (and summary financial reports, if any).

                Note: For the requirements governing preliminary results announcements, see paragraphs 45 and 46 of Appendix 16.
                (3) Where the issuer deviates from the code provisions, it must give considered reasons:
                (a) for annual reports (and summary financial reports), in the Corporate Governance Report under Appendix 14; and
                (b) for interim reports (and summary interim reports), either:
                (i) by giving considered reasons for each deviation; or
                (ii) to the extent that it is reasonable and appropriate, by referring to the Corporate Governance Report in the immediately preceding annual report, and providing details of any changes together with considered reasons for any deviation not reported in that annual report. The references must be clear and unambiguous and the interim report (or summary interim report) must not contain only a cross-reference without any discussion of the matter.
                (4) For the recommended best practices, issuers are encouraged, but are not required, to state whether they have complied with them and give considered reasons for any deviation.

            • Publication of issuers' constitutional documents (13.90)

              • 13.90

                An issuer must publish on its own website and on the Exchange's website, an up to date consolidated version of its memorandum and articles of association or equivalent constitutional document.

            • Environmental and Social Matters (13.91)

              • 13.91

                (1) The Environmental, Social and Governance ("ESG") Reporting Guide in Appendix 27 comprises two levels of disclosure obligations: (a) "comply or explain" provisions; and (b) recommended disclosures.
                (2) Issuers must state whether they have complied with the "comply or explain" provisions set out in the ESG Reporting Guide for the relevant financial year in their annual reports or in separate ESG reports.
                (3) Where the issuer deviates from the "comply or explain" provisions, it must give considered reasons in its ESG report.
                (4) Issuers are encouraged, but not required, to report on the recommended disclosures of the ESG Reporting Guide.
                (5) Issuers must publish their ESG reports on an annual basis and regarding the same period covered in their annual reports.
                Notes:
                (1) An ESG report may be presented as information in the issuer's annual report, in a separate report, or on the issuer's website. Where not presented in the issuer's annual report, the issuer should publish this information as close as possible to, and in any event no later than three months after, the publication of the issuer's annual report.
                (2) As regards "Subject Area A. Environmental" of the ESG Reporting Guide, the upgrade of the Key Performance Indicators to "comply or explain" will come into effect for issuers' financial years beginning on or after 1 January 2017.

        • Chapter 14 Notifiable Transactions

          • Preliminary

            • 14.01

              This Chapter deals with certain transactions, principally acquisitions and disposals, by a listed issuer. It describes how they are classified, the details that are required to be disclosed in respect of them and whether a circular and shareholders' approval are required. It also considers additional requirements in respect of takeovers and mergers.

            • 14.02

              If any transaction for the purposes of this Chapter is also a connected transaction for the purposes of Chapter 14A, the listed issuer will, in addition to complying with the provisions of this Chapter, have to comply with the provisions of Chapter 14A.

            • 14.03 [Repealed]

              [Repealed 1 January 2009]

          • Definitions

            • 14.04

              For the purposes of this Chapter:—

              (1) any reference to a "transaction" by a listed issuer:
              (a) includes the acquisition or disposal of assets, including deemed disposals as referred to in rule 14.29;
              (b) includes any transaction involving a listed issuer writing, accepting, transferring, exercising or terminating (in the manner described in rule 14.73) an option (as defined in rule 14.72) to acquire or dispose of assets or to subscribe for securities;
              (c) includes entering into or terminating finance leases where the financial effects of such leases have an impact on the balance sheet and/or profit and loss account of the listed issuer;
              (d) includes entering into or terminating operating leases which, by virtue of their size, nature or number, have a significant impact on the operations of the listed issuer. The Exchange will normally consider an operating lease or a transaction involving multiple operating leases to have a "significant impact" if such lease(s), by virtue of its/their total monetary value or the number of leases involved, represent(s) a 200% or more increase in the scale of the listed issuer's existing operations conducted through lease arrangements of such kind;
              (e) includes granting an indemnity or a guarantee or providing financial assistance by a listed issuer, other than by a listed issuer which:
              (i) is a banking company (as defined in rule 14A.06(3)) and provides the financial assistance (as defined in rule 14A.06(17)) in its ordinary and usual course of business (as referred to in rule 14.04(8));
              (ii) grants an indemnity or a guarantee, or provides financial assistance to its subsidiaries; or
              (iii) is a securities house and provides the financial assistance (as defined in rule 14A.06(17)) in its ordinary and usual course of business (as referred to in rule 14.04(8)) and upon normal commercial terms, either:
              (A) by way of securities margin financing (which means providing a financial accommodation in order to facilitate:
              (aa) the acquisition of securities listed on any stock market, whether a recognized stock market (as defined in Schedule 1 to the Securities and Futures Ordinance) or any other stock market outside Hong Kong; and
              (bb) (where applicable) the continued holding of those securities,

              whether or not those or other securities are pledged as security for the accommodation); or
              (B) for the purpose of a proposed acquisition of securities in accordance with the terms of a prospectus which is registered in Hong Kong and issued in respect of an initial public offering of equity securities to be listed in Hong Kong.

              Note: Such a transaction may nevertheless in some cases constitute a connected transaction under Chapter 14A. In such cases, the listed issuer will have to comply with the provisions of Chapter 14A.
              (f) includes entering into any arrangement or agreement involving the formation of a joint venture entity in any form, such as a partnership or a company, or any other form of joint arrangement, other than a joint venture where:
              (i) the joint venture is engaging in a single purpose project/transaction which is of a revenue nature in the ordinary and usual course of business of the issuer (see rule 14.04(1)(g));
              (ii) the joint venture arrangement is on an arm's length basis and on normal commercial terms; and
              (iii) the joint venture agreement contains clause(s) to the effect that the joint venture may not, without its partners' unanimous consent:
              (A) change the nature or scope of its business; or
              (B) enter into any transactions which are not on an arm's length basis; and
              (g) to the extent not expressly provided in rules 14.04(1)(a) to (f), excludes any transaction of a revenue nature in the ordinary and usual course of business (as referred to in rule 14.04(8)) of the listed issuer;

              Notes:
              1 To the extent not expressly provided in rules 14.04(1)(a) to (f), any transaction of a revenue nature in the ordinary and usual course of business of a listed issuer will be exempt from the requirements of this Chapter.
              2 Any transaction involving the acquisition and disposal of properties will generally not be considered to be of a revenue nature unless such transactions are carried out as one of the principal activities and in the ordinary and usual course of business of the listed issuer.
              3 Where a listed issuer, for the financial reporting purpose, has transferred an asset from the fixed asset account to the current asset account, a subsequent disposal of the asset by the listed issuer will not be exempt under rule 14.04(1)(g).
              4 In considering whether or not a transaction is of a revenue nature, a listed issuer must take into account the following factors:
              (a) whether previous transactions or recurring transactions that were of the same nature were treated as notifiable transactions;
              (b) the historical accounting treatment of its previous transactions that were of the same nature;
              (c) whether the accounting treatment is in accordance with generally acceptable accounting standards; and
              (d) whether the transaction is a revenue or capital transaction for tax purposes.
              These factors are included for guidance only and are not intended to be exhaustive. The Exchange may take into account other factors relevant to a particular transaction in assessing whether or not it is of a revenue nature. In cases of doubt, the listed issuer must consult the Exchange at an early stage.
              (2) "accounts" means:—
              (a) in respect of a listed issuer, and for the purpose of determining its total assets, profits or revenue figures pursuant to rule 14.07, the listed issuer's latest published audited accounts or, where consolidated accounts have been prepared, the listed issuer's latest published audited consolidated accounts; and
              (b) in the case of any other company, legal person, partnership, trust or business unit, its latest audited accounts or, where consolidated accounts have been prepared, its latest audited consolidated accounts or, where no audited accounts have been prepared, such other accounts as may be permitted by the Exchange in its discretion;
              (3) an "aircraft company" means a company or other entity whose non-cash assets consist solely or mainly of aircraft or interests in aircraft or interests in companies or entities whose non-cash assets consist solely or mainly of aircraft and whose income is mainly derived from those aircraft;
              (4) "assets" means both tangible and intangible assets and includes businesses, companies and securities, whether listed or not (unless otherwise stated);
              (5) "de minimis ratio" means the ratio determined in accordance with rules 14A.76, 14A.87(2) and 14A.87(3) (as the case may be);
              (6) a "listed issuer" means a company or other legal person whose securities are already listed on the Main Board , including a company whose shares are represented by listed depositary receipts, and unless the context otherwise requires, includes its subsidiaries;
              (7) a "notifiable transaction" means a transaction classified as a share transaction, discloseable transaction, major transaction, very substantial disposal, very substantial acquisition or reverse takeover under rule 14.06;
              (8) "ordinary and usual course of business" of an entity means the existing principal activities of the entity or an activity wholly necessary for the principal activities of the entity. In the context of financial assistance provided in the ordinary and usual course of business, this means financial assistance provided by a banking company only or by a securities house pursuant to rule 14.04(1)(e)(iii) only and, in the context of financial assistance not provided in the ordinary and usual course of business, it means financial assistance not provided by a banking company or by a securities house under rule 14.04(1)(e)(iii);
              (9) "percentage ratios" means the percentage ratios set out in rule 14.07, and "assets ratio", "profits ratio", "revenue ratio", "consideration ratio" and "equity capital ratio" shall bear the respective meanings set out in rule 14.07;
              (10) a "property company" means a company or other entity whose non-cash assets consist solely or mainly of properties or interests in properties or interests in companies or entities whose non-cash assets consist solely or mainly of properties and whose income is mainly derived from those properties;
              (10A) [Repealed 1 February 2011]
              (10B) "Qualified Issuer" means an issuer actively engaged in property development as a principal business activity. For determining whether property development is a principal activity of an issuer, consideration will be given to the following factors:
              (a) clear disclosure of property development activity as a current and continuing principal business activity in the Directors' Report of its latest published annual financial statements;
              (b) property development activity is reported as a separate and continuing segment (if not the only segment) in its latest published financial statements; and
              (c) its format for reporting segmental information and its latest published annual financial statements have fully complied with the requirements of relevant accounting standards adopted for the preparation of its annual financial statements on reporting of segment revenue and segment expense.
              (10C) "Qualified Property Acquisition" means an acquisition of land or property development project in Hong Kong from Government or Government-controlled entities through a public auction or tender; or an acquisition of governmental land in the Mainland from a PRC Governmental Body (as defined in rule 19A.04) through a tender (招標), auction (拍賣), or listing-for-sale (掛牌) governed by the PRC law (as defined in rule 19A.04);

              Note: The Exchange may relax this requirement to accept land acquired in other jurisdictions from governmental bodies through public auctions or tenders. Factors which the Exchange will consider include:
              (i) whether the government land is acquired through a competitive bidding process regulated by legislation and/or requirements in the relevant jurisdiction;
              (ii) whether the bidding process is fairly structured and established, and bidders have no discretion to change pre-established terms;
              (iii) whether acquiring government land through a bidding process is a common practice in that jurisdiction; and
              (iv) the problems faced by the issuer in complying with the notifiable transaction Rules for the land acquisition.
              (10D) [Repealed 1 February 2011]
              (10E) a "securities house" means a corporation which is licensed or registered under the Securities and Futures Ordinance for Type 1 (dealing in securities) or Type 8 (securities margin financing) regulated activity;
              (11) a "shipping company" means a company or other entity whose non-cash assets consist solely or mainly of vessels or interests in vessels or interests in companies or entities whose non-cash assets consist solely or mainly of vessels and whose income is mainly derived from those vessels; and
              (12) "total assets" means:—
              (a) in respect of a listed issuer, the total fixed assets, including intangible assets, plus the total current and non-current assets, as shown in its accounts or latest published interim report (whichever is more recent), subject to any adjustments or modifications arising by virtue of the provisions of rules 14.16, 14.18 and 14.19; and
              (b) in the case of any other company, legal person, partnership, trust or business unit, the total fixed assets, including intangible assets, plus the total current and non-current assets, as shown in its accounts, subject to any adjustments or modifications arising from any significant changes to its assets subsequent to the date of the balance sheet in the accounts.

              Note: Listed issuers must demonstrate to the satisfaction of the Exchange that any such adjustments or modifications to the accounts of the relevant company, legal person, partnership, trust or business unit are necessary and appropriate in order to reflect its latest financial position.

          • Classification and explanation of terms

            • 14.05

              A listed issuer considering a transaction must, at an early stage, consider whether the transaction falls into one of the classifications set out in rule 14.06. In this regard, the listed issuer must determine whether or not to consult its financial, legal or other professional advisers. Listed issuers or advisers which are in any doubt as to the application of the requirements in this Chapter should consult the Exchange at an early stage.

            • 14.06

              The transaction classification is made by using the percentage ratios set out in rule 14.07. The classifications are:—

              (1) share transaction — an acquisition of assets (excluding cash) by a listed issuer where the consideration includes securities for which listing will be sought and where all percentage ratios are less than 5%;
              (2) discloseable transaction — a transaction or a series of transactions (aggregated under rules 14.22 and 14.23) by a listed issuer where any percentage ratio is 5% or more, but less than 25%;
              (3) major transaction — a transaction or a series of transactions (aggregated under rules 14.22 and 14.23) by a listed issuer where any percentage ratio is 25% or more, but less than 100% for an acquisition or 75% for a disposal;
              (4) very substantial disposal — a disposal or a series of disposals (aggregated under rules 14.22 and 14.23) of assets (including deemed disposals referred to in rule 14.29) by a listed issuer where any percentage ratio is 75% or more;
              (5) very substantial acquisition — an acquisition or a series of acquisitions (aggregated under rules 14.22 and 14.23) of assets by a listed issuer where any percentage ratio is 100% or more; and
              (6) reverse takeover — an acquisition or a series of acquisitions of assets by a listed issuer which, in the opinion of the Exchange, constitutes, or is part of a transaction or arrangement or series of transactions or arrangements which constitute, an attempt to achieve a listing of the assets to be acquired and a means to circumvent the requirements for new applicants set out in Chapter 8 of the Exchange Listing Rules. A "reverse takeover" normally refers to:
              (a) an acquisition or a series of acquisitions (aggregated under rules 14.22 and 14.23) of assets constituting a very substantial acquisition where there is or which will result in a change in control (as defined in the Takeovers Code) of the listed issuer (other than at the level of its subsidiaries); or
              (b) acquisition(s) of assets from a person or a group of persons or any of his/their associates pursuant to an agreement, arrangement or understanding entered into by the listed issuer within 24 months of such person or group of persons gaining control (as defined in the Takeovers Code) of the listed issuer (other than at the level of its subsidiaries), where such gaining of control had not been regarded as a reverse takeover, which individually or together constitute(s) a very substantial acquisition. For the purpose of determining whether the acquisition(s) constitute(s) a very substantial acquisition, the lower of:
              (A) the latest published figures of the asset value, revenue and profits as shown in the listed issuer's accounts and the market value of the listed issuer at the time of the change in control, which must be adjusted in the manner set out in rules 14.16, 14.17, 14.18 and 14.19, as applicable, up to the time of the change in control; and
              (B) the latest published figures of the asset value, revenue and profits as shown in the listed issuer's accounts and the market value of the listed issuer at the time of the acquisition(s), which must be adjusted in the manner set out in rules 14.16, 14.17, 14.18 and 14.19, as applicable,
              is to be used as the denominator of the percentage ratios.

              Note: Rule 14.06(6) will apply irrespective of whether any general offer obligations under the Takeovers Code have been waived.

            • Percentage ratios (14.07-14.08)

              • 14.07

                The percentage ratios are the figures, expressed as percentages resulting from each of the following calculations:—

                (1) Assets ratio — the total assets which are the subject of the transaction divided by the total assets of the listed issuer (see in particular rules 14.09 to 14.12, 14.16, 14.18 and 14.19);
                (2) Profits ratio — the profits attributable to the assets which are the subject of the transaction divided by the profits of the listed issuer (see in particular rules 14.13 and 14.17);
                (3) Revenue ratio — the revenue attributable to the assets which are the subject of the transaction divided by the revenue of the listed issuer (see in particular rules 14.14 and 14.17);
                (4) Consideration ratio — the consideration divided by the total market capitalisation of the listed issuer. The total market capitalisation is the average closing price of the listed issuer's securities as stated in the Exchange's daily quotations sheets for the five business days immediately preceding the date of the transaction (see in particular rule 14.15); and
                (5) Equity capital ratio — the number of shares to be issued by the listed issuer as consideration divided by the total number of the listed issuer's issued shares immediately before the transaction.

                Notes:

                1. The numerator includes shares that may be issued upon conversion or exercise of any convertible securities or subscription rights to be issued or granted by the listed issuer as consideration.
                2. The listed issuer's debt capital (if any), including any preference shares, shall not be included in the calculation of the equity capital ratio.

                Listed issuers must consider all the percentage ratios to the extent applicable for classifying a transaction. In the case of an acquisition where the target entity uses accounting standards different from those of the listed issuer, the listed issuer must, where applicable, perform an appropriate and meaningful reconciliation of the relevant figures for the purpose of calculating the percentage ratios.

              • 14.08

                The table below summarises the classification and percentage ratios resulting from the calculations set out in rule 14.07. However, listed issuers should refer to the relevant rules for the specific requirements.

                Transaction type Assets ratio Consideration ratio Profits ratio Revenue ratio Equity capital ratio
                Share transaction less than 5% less than 5% less than 5% Less than 5% less than 5%
                Discloseable transaction 5% or more but less than 25% 5% or more but less than 25% 5% or more but less than 25% 5% or more but less than 25% 5% or more but less than 25%
                Major transaction — disposal 25% or more but less than 75% 25% or more but less than 75% 25% or more but less than 75% 25% or more but less than 75% Not applicable
                Major transaction — acquisition 25% or more but less than 100% 25% or more but less than 100% 25% or more but less than 100% 25% or more but less than 100% 25% or more but less than 100%
                Very substantial disposal 75% or more 75% or more 75% or more 75% or more Not applicable
                Very substantial acquisition 100% or more 100% or more 100% or more 100% or more 100% or more

                Note: The equity capital ratio relates only to an acquisition (and not a disposal) by a listed issuer issuing new equity capital.

            • Assets (14.09-14.12)

              • 14.09

                Where the asset being acquired or disposed of constitutes equity capital, the listed issuer must take into account the matters referred to in rules 14.25 to 14.32 when calculating the amount of total assets which are the subject of the transaction.

              • 14.10

                Where the equity capital to be acquired or disposed of by the listed issuer is listed on the Main Board or GEM, the total assets which are the subject of the transaction must be adjusted in the manner set out in rules 14.16, 14.18 and 14.19.

              • 14.11

                Where a listed issuer which is a property company, shipping company or aircraft company acquires or disposes of properties, vessels or aircraft respectively, the aggregate value (on an unencumbered basis) of the properties, vessels or aircraft (as the case may be) being acquired or realised will be compared with the total assets of the listed issuer which must be adjusted in the manner set out in rules 14.16, 14.18 and 14.19 or the latest published valuation (on an unencumbered basis) of the properties, vessels or aircraft (as the case may be) if such valuation is published after the issue of accounts of the listed issuer, where appropriate.

              • 14.12

                Where the transaction involves granting an indemnity or guarantee or providing financial assistance by a listed issuer, the assets ratio will be modified such that the total value of the indemnity, guarantee or financial assistance plus in each case any monetary advantage accruing to the entity benefiting from the transaction shall form the numerator of the assets ratio. The "monetary advantage" includes the difference between the actual value of consideration paid by the entity benefiting from the transaction and the fair value of consideration that would be paid by the entity if the indemnity, guarantee or financial assistance were provided by entities other than the listed issuer.

            • Profits (14.13)

              • 14.13

                Profits mean net profits after deducting all charges except taxation and before non-controlling interests (See also rule 14.17). In the case of an acquisition or disposal of assets (other than equity capital) through a non wholly-owned subsidiary, the profits attributable to the assets acquired or disposed of (and not the listed issuer's proportionate interest in such profits) will form the numerator for the purpose of the profits ratio.

            • Revenue (14.14)

              • 14.14

                "Revenue" normally means revenue arising from the principal activities of a company and does not include those items of revenue and gains that arise incidentally. In the case of any acquisition or disposal of assets (other than equity capital) through a non wholly-owned subsidiary, the revenue attributable to the assets being acquired or realised (and not the listed issuer's proportionate interest in such revenue) will form the numerator for the purpose of the revenue ratio (See also rule 14.17).

            • Consideration (14.15)

              • 14.15

                When calculating the consideration ratio:—

                (1) the value of the consideration shall be the fair value of the consideration determined at the date of the agreement of the transaction in accordance with applicable accounting standards adopted for the preparation of the listed issuer's annual financial statements. Normally, the fair value of the consideration should be the same as the fair value of the asset which is the subject of the transaction. Where there is a significant disparity between the fair value of the consideration and the fair value of the asset, the listed issuer must use the higher of the fair value of the consideration and the fair value of the asset as the numerator of the consideration ratio;
                (2) where a transaction involves establishing a joint venture entity or other form of joint arrangement, the Exchange will aggregate:—
                (a) the listed issuer's total capital commitment (whether equity, loan or otherwise), including any contractual commitment to subscribe for capital; and
                (b) any guarantee or indemnity provided in connection with its establishment;

                Note: Where a joint venture entity or other form of joint arrangement is established for a future purpose, for example to develop a property, and the total capital commitment cannot be calculated at the outset, the Exchange will require the listed issuer to recalculate the relevant percentage ratios at the time when that purpose is carried out. The Exchange will look at the purpose of setting up the arrangement in terms of the initial transaction only. For example, the purpose could be the development of the property for which the arrangement was established. The Exchange will not look at subsequent transactions entered into under the arrangement for the purpose of calculating the total capital commitment in relation to the establishment of the arrangement.
                (3) a listed issuer shall add any liabilities of the vendors, whether actual or contingent, to be discharged or assumed by the purchaser under the terms of the transactions, to the consideration. The Exchange may require that further amounts be included as it considers appropriate;
                (4) if the listed issuer may pay or receive consideration in the future, the consideration is the maximum total consideration payable or receivable under the agreement; and
                (5) in the case of any acquisition or disposal through a non wholly-owned subsidiary, the consideration (and not, for the avoidance of doubt, the listed issuer's proportionate interest in such consideration) will form the numerator for the purpose of the consideration ratio.

            • Figures used in total assets, profits and revenue calculations (14.16-14.19)

              • 14.16

                A listed issuer must refer to the total assets shown in its accounts or latest published interim report (whichever is more recent) and adjust the figures by:

                (1) the amount of any dividend proposed by the listed issuer in such accounts and any dividend declared by the listed issuer since the publication of such accounts or interim report; and
                (2) where appropriate, the latest published valuation of assets (excluding businesses and intangible assets) of the listed issuer if such valuation is published after the issue of such accounts.

                Note: Rule 14.16(2) will normally apply to a valuation of assets such as properties, vessels and aircraft.

              • 14.17

                The profits (see rule 14.13) and revenue (see rule 14.14) figures to be used by a listed issuer for the basis of the profits ratio and revenue ratio must be the figures shown in its accounts. Where a listed issuer has discontinued one or more of its operating activities during the previous financial year and has separately disclosed the profits and revenue from the discontinued operations in its accounts in accordance with applicable accounting standards adopted for the preparation of the listed issuer's annual financial statements, the Exchange may be prepared to accept the exclusion of such profits and revenue for the purpose of the profits ratio and revenue ratio respectively.

              • 14.18

                The value of transactions or issues of securities by the listed issuer in respect of which adequate information has already been published and made available to shareholders in accordance with the Exchange Listing Rules and which have been completed must be included in the total assets of the listed issuer.

              • 14.19

                In calculating total assets, the Exchange may require the inclusion of further amounts where contingent assets are involved.

                Note: Contingent assets normally refer to assets that will have to be acquired by a listed issuer pursuant to an agreement upon occurrence or non-occurrence of certain event(s) after the listed issuer has entered into the agreement. Such event(s) is/are normally beyond the control of the listed issuer and the parties to the transaction. Contingent assets must be determined in accordance with applicable accounting standards adopted for the preparation of the listed issuer's annual financial statements.

            • Exceptions to the classification rules (14.20)

              • 14.20

                The Exchange may, where any of the calculations of the percentage ratios produces an anomalous result or is inappropriate to the sphere of activity of the listed issuer, disregard the calculation and substitute other relevant indicators of size, including industry specific tests. The listed issuer must provide alternative tests which it considers appropriate to the Exchange for consideration.

            • Change in percentage ratios (14.21)

              • 14.21

                If any of the percentage ratios changes to the extent that the classification of the transaction is altered between the time that any transaction is first discussed with the Exchange (if applicable) and the time of its announcement, the listed issuer must inform the Exchange. The listed issuer must comply with the relevant requirements applicable to the transaction at the time of its announcement.

            • Aggregation of transactions (14.22-14.23B)

              • 14.22

                In addition to the aggregation of acquisitions under rule 14.06(6)(b), the Exchange may require listed issuers to aggregate a series of transactions and treat them as if they were one transaction if they are all completed within a 12 month period or are otherwise related. In such cases, the listed issuer must comply with the requirements for the relevant classification of the transaction when aggregated and the figures to be used for determining the percentage ratios are those as shown in its accounts or latest published interim report (whichever is more recent), subject to any adjustments or modifications arising by virtue of the provisions of rules 14.16, 14.18 and 14.19.

              • 14.23

                Factors which the Exchange will take into account in determining whether transactions will be aggregated include whether the transactions:—

                (1) are entered into by the listed issuer with the same party or with parties connected or otherwise associated with one another;
                (2) involve the acquisition or disposal of securities or an interest in one particular company or group of companies;
                (3) involve the acquisition or disposal of parts of one asset; or
                (4) together lead to substantial involvement by the listed issuer in a business activity which did not previously form part of the listed issuer's principal business activities.

              • 14.23A

                Where an asset is being constructed, developed or refurbished by or on behalf of a listed issuer for its own use in its ordinary and usual course of business (as referred to in rule 14.04(8)), the Exchange will not normally aggregate a series of transactions carried out by the listed issuer in the course of the construction, development or refurbishment of such asset as if they were one transaction where the sole basis for aggregation is rule 14.23(3). In cases of doubt, the listed issuer should consult the Exchange at an early stage.

              • 14.23B

                For the purposes of aggregating transactions under rule 14.06(6)(b) and/or rule 14.22, a listed issuer must consult the Exchange before it enters into any proposed transaction(s) if

                (1) any circumstances described in rule 14.23 exist in respect of such proposed transaction(s) and any other transaction(s) entered into by the listed issuer in the preceding 12-month period (except for the situation described in rule 14.23A); or
                (2) the proposed transaction(s) and any other transaction(s) entered into by the listed issuer involve acquisitions of assets from a person or group of persons or any of his/ their associates within 24 months of such person or group of persons gaining control (as defined in the Takeovers Code) of the listed issuer (other than at the level of its subsidiaries).

                The listed issuer must provide details of the transactions to the Exchange to enable it to determine whether the transactions will be aggregated.

                Note: This rule serves to set out certain specific circumstances where the listed issuer must seek guidance from the Exchange before it enters into any proposed transaction(s). The Exchange may nevertheless aggregate transactions pursuant to rule 14.22 and/or rule 14.06(6)(b) where no prior consultation was made by the listed issuer under rule 14.23B.

            • Transaction involving an acquisition and a disposal (14.24)

              • 14.24

                In the case of a transaction involving both an acquisition and a disposal, the Exchange will apply the percentage ratios to both the acquisition and the disposal. The transaction will be classified by reference to the larger of the acquisition or disposal, and subject to the reporting, disclosure and/or shareholder approval requirements applicable to that classification. Where a circular is required, each of the acquisition and the disposal will be subject to the content requirements applicable to their respective transaction classification.

            • Interpretation of the classification rules in circumstances where the listed issuer or a subsidiary acquires or realises equity capital (14.25-14.28)

              • 14.25

                In circumstances where acquisitions or disposals of equity capital are made by a listed issuer, the provisions set out in rules 14.26 to 14.28 shall be applied in determining the classification of the transaction for the purposes of rule 14.06.

              • 14.26

                In an acquisition or disposal of equity capital, the numerators for the purposes of the (a) assets ratio, (b) profits ratio and (c) revenue ratio are to be calculated by reference to the value of the total assets, the profits attributable to such capital and the revenue attributable to such capital respectively.

              • 14.27

                For the purpose of rule 14.26:

                (1) the value of an entity's total assets is the higher of:
                (a) the book value of the entity's total assets attributable to the entity's capital as disclosed in its accounts; and
                (b) the book value referred to in rule 14.27(1)(a) adjusted for the latest published valuation of the entity's assets if such valuation is published after the issue of its accounts; and

                Note: This will normally apply to a valuation of assets such as properties, vessels and aircraft.
                (2) the value of an entity's profits and revenue is the profits and revenue attributable to the entity's capital as disclosed in its accounts.

              • 14.28

                The value of the entity's total assets, profits and revenue, calculated in accordance with rule 14.27, is to be multiplied by the percentage of the equity interest being acquired or disposed of by the listed issuer. However, 100% of the entity's total assets, profits and revenue will be taken as the value of the total assets, profits and revenue, irrespective of the size of the interest being acquired or disposed of, if:

                (1) the acquisition will result in consolidation of the assets of the entity in the accounts of the listed issuer; or
                (2) the disposal will result in the assets of the entity no longer being consolidated in the accounts of the listed issuer.

                Note: For example:—
                •   if a listed issuer (or subsidiary, whether wholly-owned or not) acquires 10% of the equity capital of an entity and has no prior holding in that entity, the relevant numerator will be 10%;
                •   if a listed issuer (or subsidiary, whether wholly-owned or not) acquires a further 10% interest in a subsidiary which is already consolidated in the listed issuer's accounts, the relevant numerator will be 10%; and
                •   if a listed issuer (or subsidiary, whether wholly-owned or not) acquires a 10% interest in an entity which will result in that entity being consolidated in the accounts of the listed issuer, the relevant numerator will be 100%.

            • Deemed disposals (14.29-14.32)

              • 14.29

                Allotments of share capital by a subsidiary of a listed issuer, whether or not such subsidiary is consolidated in the accounts of the listed issuer, may result in a reduction of the percentage equity interest of the listed issuer in such subsidiary. Such allotments give rise to deemed disposals. Profits or losses may be recorded on such transactions and such transactions may also fall to be treated as very substantial disposals, major or discloseable or connected transactions. Rules 14.30 to 14.32 set out how the percentage ratios are applied to such transactions.

              • 14.30

                Where a subsidiary of the listed issuer (whether or not consolidated in the accounts of the listed issuer, whether or not wholly-owned and whether held directly or indirectly):

                (1) allots shares; and
                (2) after the allotment, the subsidiary will continue to be a subsidiary,

                the percentage by which the interest is reduced will be multiplied by the subsidiary's total assets, profit and revenue as disclosed in the accounts of the subsidiary allotting shares and that shall be taken as the respective numerators for the purpose of the assets ratio, profits ratio, revenue ratio and de minimis ratio.

                Note: For example, if the interest is reduced from 90% to 80%, then 10% of the subsidiary's total assets, profits and revenue will form the respective numerators for the assets ratio, profits ratio, revenue ratio and de minimis ratio.

              • 14.31

                Where a subsidiary of the listed issuer (whether or not consolidated in the accounts of the listed issuer, whether or not wholly-owned and whether held directly or indirectly) allots shares such that, after the allotment, the subsidiary will cease to be a subsidiary, 100% of the subsidiary's total assets, profits and revenue will form the respective numerators for the assets ratio, profits ratio, revenue ratio and de minimis ratio.

                Note: For example, if the interest is reduced from 60% to 40% and the subsidiary ceases to be a subsidiary, then 100% of the entity's total assets, profits and revenue will form the respective numerators for the assets ratio, profits ratio, revenue ratio and de minimis ratio.

              • 14.32

                Where a subsidiary of the listed issuer (whether or not consolidated in the accounts of the listed issuer, whether or not wholly-owned and whether held directly or indirectly) allots shares, it is necessary to calculate a value for the purpose of the consideration ratio. This is taken as the value of the shares issued to allottees (that are not part of the listed group) and is restricted to only those shares issued which are in excess of those necessary to maintain the allottees' relative percentage interest in the subsidiary.

          • Notification, publication and shareholders' approval requirements

            • 14.33

              The table below summarises the notification, publication and shareholders' approval requirements which will generally apply to each category of notifiable transaction. However, listed issuers should refer to the relevant rules for the specific requirements.

                Notification to Exchange Publication of an announcement in accordance with rule 2.07C Circular to shareholders Shareholders' approval Accountants' report
              Share transaction Yes Yes No No1 No
              Discloseable transaction Yes Yes No No No
              Major transaction Yes Yes Yes Yes2 Yes3
              Very substantial disposal Yes Yes Yes Yes2 No5
              Very substantial acquisition Yes Yes Yes Yes2 Yes4
              Reverse takeover Yes Yes Yes Yes2, 6 Yes4

              Notes:

              1 No shareholder approval is necessary if the consideration shares are issued under a general mandate. However, if the shares are not issued under a general mandate, the listed issuer is required, pursuant to rule 13.36(2)(b) or rule 19A.38, to obtain shareholders' approval in general meeting prior to the issue of the consideration shares.
              2 Any shareholder and his close associates must abstain from voting if such shareholder has a material interest in the transaction.
              3 An accountants' report on the business, company or companies being acquired is required (see also rules 4.06 and 14.67(6)).
              4 An accountants' report on any business, company or companies being acquired is required (see also rules 4.06 and 14.69(4)).
              5 A listed issuer may at its option include an accountants' report (see note 1 to rule 14.68(2)(a)(i)).
              6 Approval of the Exchange is necessary.

            • Exemptions for Qualified Property Acquisitions which constitute major transactions or very substantial acquisitions (14.33A-14.33B)

              • 14.33A

                A Qualified Property Acquisition which constitutes a major transaction or very substantial acquisition is exempt from shareholders' approval if:

                (1) it is undertaken on a sole basis by a Qualified Issuer in its ordinary and usual course of business; or
                (2) it is undertaken by a Qualified Issuer and other party or parties on a joint basis and:
                (a) the project will be single purpose, relating to the acquisition and/or development of a specific property and consistent with the purpose specified in the auction or tender document;
                (b) each joint venture arrangement must be on an arm's length basis and on normal commercial terms;
                (c) the joint venture agreement contains clause(s) to the effect that the joint venture may not, without its partners' unanimous consent:
                (i) change the nature or scope of its business, and if there are changes then they must still be consistent with the scope or purpose specified in the auction or tender document; or
                (ii) enter into any transactions which are not on an arm's length basis; and
                (d) the Qualified Issuer's board has confirmed that the Qualified Property Acquisition is in the Qualified Issuer's ordinary and usual course of business; and that the Qualified Property Acquisition and the joint venture, including its financing and profit distribution arrangements, are on normal commercial terms, fair and reasonable and in the interests of the Qualified Issuer and its shareholders as a whole.

              • 14.33B

                (1) The Qualified Issuer must publish an announcement as soon as possible after notification of the success of a bid by it or the joint venture for a Qualified Property Acquisition falling under 14.33A and send a circular to its shareholders.
                (2) The announcement and circular must contain:
                (a) details of the acquisition;
                (b) details of the joint venture, if any, including
                (i) the joint venture's terms and status;
                (ii) its dividend and distribution policy; and
                (iii) the joint venture's financial and capital commitment and the Qualified Issuer's share in it; and
                (c) information to demonstrate that the conditions in 14.33A(1) or (2) were met.
                Note: If any of these details are not available when the issuer publishes the initial announcement, it must publish subsequent announcement(s) to disclose the details as soon as possible after they have been agreed or finalised.
                (3) The announcement and circular requirements under chapter 14 apply to the acquisition and the joint venture, if any, according to the transaction classification, except that the information circular need not contain a valuation report on the property under the Qualified Property Acquisition.

          • Requirements for all transactions

            • Notification and announcement (14.34-14.36A)

              • 14.34

                As soon as possible after the terms of a share transaction, discloseable transaction, major transaction, very substantial disposal, very substantial acquisition or reverse takeover have been finalised, the listed issuer must in each case:—

                (1) inform the Exchange; and
                (2) publish an announcement as soon as possible. See also rule 14.37.

              • 14.35

                For a share transaction, the announcement must contain the information set out in rules 14.58 and 14.59. For a discloseable transaction, major transaction, very substantial disposal, very substantial acquisition or reverse takeover, the announcement must contain at least the information set out in rules 14.58 and 14.60. In all cases, listed issuers must also include any additional information requested by the Exchange.

              • 14.36

                Where a transaction previously announced pursuant to this Chapter is terminated or there is any material variation of its terms or material delay in the completion of the agreement, the listed issuer must as soon as practicable announce this fact by means of an announcement published in accordance with rule 2.07C. This requirement is without prejudice to the generality of any other provisions of the Exchange Listing Rules and the listed issuer must, where applicable, also comply with such provisions.

              • 14.36A

                Where there is expected to be delay in despatch of the circular by the date previously announced under rule 14.60(7) or this rule, the listed issuer must as soon as practicable disclose this fact by way of an announcement stating the reason for the delay and the new expected date of despatch of the circular.

            • Trading halt and suspension of dealings (14.37-14.38)

              • 14.37

                (1) Where an issuer has signed an agreement in respect of a share transaction, major transaction, very substantial disposal, very substantial acquisition or reverse takeover and the required announcement has not been published on a business day, it must apply for a trading halt or a trading suspension pending the announcement.
                (2) Without prejudice to rule 14.37(1), an issuer that has signed an agreement in respect of a notifiable transaction which it reasonably believes would require disclosure under the Inside Information Provisions must immediately apply for a trading halt or a trading suspension pending announcement of the agreement.
                (3) An issuer that has finalised the major terms of an agreement in respect of a notifiable transaction which it reasonably believes would require disclosure under the Inside Information Provisions must ensure confidentiality of the relevant information until making the required announcement. Where the issuer considers that the necessary degree of security cannot be maintained or that the security may have been breached, it must make an announcement or immediately apply for a trading halt or a trading suspension pending the announcement.
                (4) Directors of issuers must, under rule 13.06A, maintain confidentiality of information that is likely to be inside information, until it is announced.
                (5) In the case of a reverse takeover, suspension of dealings in the issuer's securities must continue until the issuer has announced sufficient information. Whether the amount of information disclosed in the announcement is sufficient or not is determined on a case-by-case basis.

              • 14.38 [Repealed]

                [Repealed 3 June 2010]

          • Additional requirements for major transactions

            • Circular (14.38A-14.39)

              • 14.38A

                In addition to the requirements for all transactions set out in rules 14.34 to 14.37, a listed issuer which has entered into a major transaction must send a circular to its shareholders and the Exchange and arrange for its publication in accordance with the provisions of Chapter 2 of the Exchange Listing Rules.

              • 14.39 [Repealed]

                [Repealed 1 January 2009]

            • Shareholders' approval (14.40-14.43)

              • 14.40

                A major transaction must be made conditional on approval by shareholders.

              • 14.41

                The circular must be despatched to the shareholders of the listed issuer:

                (a) if the transaction is approved or is to be approved by way of written shareholders' approval from a shareholder or a closely allied group of shareholders under rule 14.44, within 15 business days after publication of the announcement; or
                (b) if the transaction is to be approved by shareholders at a general meeting, at the same time as or before the listed issuer gives notice of the general meeting to approve the transaction.

                The circular shall contain information required under rules 14.63, 14.66, 14.67 (for an acquisition only) and 14.70 (for a disposal only).

              • 14.42

                A listed issuer shall despatch to its shareholders any revised or supplementary circular and/ or provide any material information that has come to the attention of the directors after the issue of circular (by way of announcement published in accordance with rule 2.07C) on the transaction to be considered at a general meeting not less than 10 business days before the date of the relevant general meeting.

                Note: The listed issuer must assess the scale of revisions or updating required and materiality of the new information, revisions or updating required that has come to its attention after publication of the circular, when deciding whether to issue a revised or supplementary circular or publish an announcement in accordance with rule 2.07C. Where the revisions or updating required are significant, the listed issuer must consider carefully whether it would be better to publish a revised or supplementary circular rather than provide particulars of the changes in an announcement. The listed issuer should not overwhelm or confuse investors with lengthy announcements describing changes to information contained in the original circular.

              • 14.43

                The meeting must be adjourned before considering the relevant resolution to ensure compliance with the 10 business day requirement under rule 14.42 by the chairman or, if that is not permitted by the listed issuer's constitutional documents, by resolution to that effect (see also rule 13.41).

            • Methods of approval (14.44-14.47)

              • 14.44

                Shareholders' approval for a major transaction shall be given by a majority vote at a general meeting of the shareholders of the issuer unless all the following conditions are met, in which case written shareholders' approval may, subject to rule 14.86, be accepted in lieu of holding a general meeting:—

                (1) no shareholder is required to abstain from voting if the issuer were to convene a general meeting for the approval of the transaction; and
                (2) the written shareholders' approval has been obtained from a shareholder or a closely allied group of shareholders who together hold more than 50% of the voting rights at that general meeting to approve the transaction. Where a listed issuer discloses inside information to any shareholder in confidence to solicit the written shareholders' approval, the listed issuer must be satisfied that such shareholder is aware that he must not deal in the listed issuer's securities before such information has been made available to the public.

              • 14.45

                To determine whether a group of shareholders constitutes a "closely allied group of shareholders", the Exchange will take into account the following factors:—

                (1) the number of persons in the group;
                (2) the nature of their relationship including any past or present business association between two or more of them;
                (3) the length of time each of them has been a shareholder;
                (4) whether they would together be regarded as "acting in concert" for the purposes of the Takeovers Code; and
                (5) the way in which they have voted in the past on shareholders' resolutions other than routine resolutions at an annual general meeting.

                It is the listed issuer's responsibility to provide sufficient information to the Exchange to demonstrate that the group of shareholders is a "closely allied group" of shareholders.

              • 14.46

                The Exchange will require any shareholder and his close associates to abstain from voting at the relevant general meeting on the relevant resolution(s) if such shareholder has a material interest in the transaction and will not accept written approval for the transaction.

              • 14.47 [Repealed]

                [Repealed 1 January 2009]

          • Additional requirements for very substantial disposals and very substantial acquisitions

            • 14.48

              In the case of a very substantial disposal or a very substantial acquisition, the listed issuer must comply with the requirements for all transactions and for major transactions set out in rules 14.34 to 14.37, 14.38A and 14.41.

            • 14.49

              A very substantial disposal and a very substantial acquisition must be made conditional on approval by shareholders in general meeting. No written shareholders' approval will be accepted in lieu of holding a general meeting. The Exchange will require any shareholder and his close associates to abstain from voting at the relevant general meeting on the relevant resolution(s) if such shareholder has a material interest in the transaction.

            • 14.50 [Repealed]

              [Repealed 1 January 2009]

            • 14.51

              The circular must be despatched to the shareholders of the listed issuer at the same time as or before the listed issuer gives notice of the general meeting to approve the transaction referred to in the circular. The circular must contain the information required under rules 14.63, 14.68 (for a very substantial disposal) and 14.69 (for a very substantial acquisition).

            • 14.52

              A listed issuer shall despatch to its shareholders any revised or supplementary circular and/ or provide any material information that has come to the attention of the directors after the issue of the circular (by way of announcement published in accordance with rule 2.07C) on the transaction to be considered at a general meeting not less than 10 business days before the date of the relevant general meeting.

              Note: The listed issuer must assess the scale of revisions or updating required and materiality of the new information, revisions or updating required that has come to its attention after publication of the circular, when deciding whether to issue a revised or supplementary circular or publish an announcement in accordance with rule 2.07C. Where the revisions or updating required are significant, the listed issuer must consider carefully whether it would be better to publish a revised or supplementary circular rather than provide particulars of the changes in an announcement. The listed issuer should not overwhelm or confuse investors with lengthy announcements describing changes to information contained in the original circular.

            • 14.53

              The meeting must be adjourned before considering the relevant resolution to ensure compliance with the 10 business day requirement under rule 14.52 by the chairman or, if that is not permitted by the listed issuer's constitutional documents, by resolution to that effect (see also rule 13.41).

          • Additional requirements for reverse takeovers

            • 14.54

              The Exchange will treat a listed issuer proposing a reverse takeover as if it were a new listing applicant. The enlarged group or the assets to be acquired must be able to meet the requirements of rule 8.05 and the enlarged group must be able to meet all the other basic conditions set out in Chapter 8 of the Exchange Listing Rules. The listed issuer must comply with the requirements for all transactions set out in rules 14.34 to 14.37.

            • 14.55

              A reverse takeover must be made conditional on approval by shareholders in general meeting. No written shareholders' approval will be accepted in lieu of holding a general meeting. The Exchange will require any shareholder and his close associates to abstain from voting at the relevant general meeting on the relevant resolution(s) if such shareholder has a material interest in the transaction. Furthermore, where there is a change in control of the listed issuer as referred to in rule 14.06(6) and any person or group of persons will cease to be a controlling shareholder (the "outgoing controlling shareholder") by virtue of a disposal of his shares to the person or group of persons gaining control (the "incoming controlling shareholder"), any of the incoming controlling shareholder's close associates or an independent third party, the outgoing controlling shareholder and his close associates may not vote in favour of any resolution approving an injection of assets by the incoming controlling shareholder or his close associates at the time of the change in control.

              Note: The prohibition against the outgoing controlling shareholder and his close associates voting in favour of a resolution approving an injection of assets does not apply where the decrease in the outgoing controlling shareholder's shareholding is solely the result of a dilution through the issue of new shares to the incoming controlling shareholder rather than any disposal of shares by the outgoing controlling shareholder.

            • 14.56 [Repealed]

              [Repealed 1 January 2009]

            • 14.57

              A listed issuer proposing a reverse takeover must comply with the procedures and requirements for new listing applications as set out in Chapter 9 of the Exchange Listing Rules. The listed issuer will be required, among other things, to issue a listing document and pay the non-refundable initial listing fee. A listing document relating to a reverse takeover must contain the information required under rules 14.63 and 14.69. The listing document must be despatched to the shareholders of the listed issuer at the same time as or before the listed issuer gives notice of the general meeting to approve the transaction. The listed issuer must state in the announcement on the reverse takeover when it expects the listing document to be issued.

          • Contents of announcements

            • All transactions (14.58)

              • 14.58

                The announcement for a share transaction, discloseable transaction, major transaction, very substantial disposal, very substantial acquisition or reverse takeover must contain at least the following information:—

                (1) a prominent and legible disclaimer at the top of the announcement in the form set out in rule 14.88;
                (2) a description of the principal business activities carried on by the listed issuer and a general description of the principal business activities of the counterparty, if the counterparty is a company or entity;
                (3) the date of the transaction. The listed issuer must also confirm that, to the best of the directors' knowledge, information and belief having made all reasonable enquiry, the counterparty and the ultimate beneficial owner of the counterparty are third parties independent of the listed issuer and connected persons of the listed issuer;
                (4) the aggregate value of the consideration, how it is being or is to be satisfied and details of the terms of any arrangements for payment on a deferred basis. If the consideration includes securities for which listing will be sought, the listed issuer must also include the amounts and details of the securities being issued;
                (5) the basis upon which the consideration was determined;
                (6) the value (book value and valuation, if any) of the assets which are the subject of the transaction;
                (7) where applicable, the net profits (both before and after taxation) attributable to the assets which are the subject of the transaction for the two financial years immediately preceding the transaction;
                (8) the reasons for entering into the transaction, the benefits which are expected to accrue to the listed issuer as a result of the transaction and a statement that the directors believe that the terms of the transaction are fair and reasonable and in the interests of the shareholders as a whole; and
                (9) where appropriate, details of any guarantee and/or other security given or required as part of or in connection with the transaction.

            • Share transaction announcements (14.59)

              • 14.59

                In addition to the information set out in rule 14.58, the announcement for a share transaction must contain at least the following information:—

                (1) the amount and details of the securities being issued including details of any restrictions which apply to the subsequent sale of such securities;
                (2) brief details of the asset(s) being acquired, including the name of any company or business or the actual assets or properties where relevant and, if the assets include securities, the name and general description of the activities of the company in which the securities are or were held;
                (3) if the transaction involves an issue of securities of a subsidiary of the listed issuer, a declaration as to whether the subsidiary will continue to be a subsidiary of the listed issuer following the transaction;
                (4) a statement that the announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities; and
                (5) a statement that application has been or will be made to the Exchange for the listing of and permission to deal in the securities.

            • Discloseable transaction, major transaction, very substantial disposal, very substantial acquisition and reverse takeover announcements (14.60-14.60A)

              • 14.60

                In addition to the information set out in rule 14.58, the announcement for a discloseable transaction, major transaction, very substantial disposal, very substantial acquisition or reverse takeover must contain at least brief details of the following:—

                (1) the general nature of the transaction including, where the transaction involves securities, details of any restrictions which apply to the subsequent sale of such securities;
                (2) brief details of the asset(s) being acquired or disposed of, including the name of any company or business or the actual assets or properties where relevant and, if the assets include securities, the name and general description of the activities of the company in which the securities are or were held;
                (3) in the case of a disposal:—
                (a) details of the gain or loss expected to accrue to the listed issuer and the basis for calculating this gain or loss. Where the listed issuer expects to recognise in its income statement a gain or loss different from the disclosed gain or loss, the reason for the difference must be explained. The gain or loss is to be calculated by reference to the carrying value of the assets in the accounts; and
                (b) the intended application of the sale proceeds;
                (4) if the transaction involves an issue of securities for which listing will be sought, the announcement must also include:
                (a) a statement that the announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities; and
                (b) a statement that application has been or will be made to the Exchange for the listing of and permission to deal in the securities;
                (5) where the transaction is a major transaction approved or to be approved by way of written shareholders' approval from a shareholder or a closely allied group of shareholders pursuant to rule 14.44, details of the shareholder or the closely allied group of shareholders (as the case may be), including the name of the shareholder(s), the number of securities held by each such shareholder and the relationship between the shareholders;
                (6) if the transaction involves a disposal of an interest in a subsidiary by a listed issuer, a declaration as to whether the subsidiary will continue to be a subsidiary of the listed issuer following the transaction; and
                (7) in the case of a major transaction, a very substantial disposal, a very substantial acquisition or a reverse takeover, the expected date of despatch of the circular and if this is more than 15 business days after the publication of the announcement, the reasons why this is so.

                Note: If there is expected to be delay in despatch of the circular, the listed issuer must as soon as practicable publish a further announcement in accordance with rule 14.36A.

              • 14.60A

                In addition to the information set out in rule 14.60, where the announcement for a discloseable transaction contains a profit forecast as referred to in rule 14.62, the announcement must contain the following information or the issuer must publish a further announcement containing the following information in accordance with rule 2.07C within 15 business days after publication of the announcement:

                (1) the information specified in paragraph 29(2) of Appendix 1, Part B; and
                (2) information regarding the expert statements contained in the announcement, which is specified in paragraph 5 of Appendix 1, Part B.

            • Profit forecast in an announcement (14.61-14.62)

              • 14.61

                A "profit forecast" means any forecast of profits or losses, however worded, and includes any statement which explicitly or implicitly quantifies the anticipated level of future profits or losses, either expressly or by reference to previous profits or losses or any other benchmark or point of reference. It also includes any profit estimate, being any estimate of profits or losses for a financial period which has expired but for which the results have not yet been published. Any valuation of assets (except for property interests (as defined in rule 5.01(3)) or businesses acquired by an issuer based on discounted cash flows or projections of profits, earnings or cash flows is regarded as a profit forecast.

              • 14.62

                Where the announcement contains a profit forecast in respect of the issuer or a company which is, or is proposed to become, one of its subsidiaries, the issuer must submit the following additional information and documents to the Exchange no later than the making of such announcement:—

                (1) details of the principal assumptions, including commercial assumptions, upon which the forecast is based;
                (2) a letter from the issuer's auditors or reporting accountants confirming that they have reviewed the accounting policies and calculations for the forecast and containing their report; and
                (3) a report from the issuer's financial advisers confirming that they are satisfied that the forecast has been made by the directors after due and careful enquiry. If no financial advisers have been appointed in connection with the transaction, the issuer must provide a letter from the board of directors confirming they have made the forecast after due and careful enquiry.

                Note: See rules 13.24B(1) and 13.24B(2) in respect of issuers' obligation to announce material or significant changes which impact on profit forecasts.

          • Contents of circulars

            • General principles (14.63-14.65)

              • 14.63

                A circular for a major transaction, very substantial disposal or very substantial acquisition and a listing document for a reverse takeover sent by a listed issuer to holders of its listed securities must:—

                (1) provide a clear, concise and adequate explanation of its subject matter having regard to the provisions of rule 2.13; and
                (2) if voting or shareholders' approval is required:
                (a) contain all information necessary to allow the holders of the securities to make a properly informed decision;
                (b) contain a heading emphasising the importance of the document and advising holders of securities, who are in any doubt as to what action to take, to consult appropriate independent advisers;
                (c) contain a recommendation from the directors as to the voting action that shareholders should take, indicating whether or not the proposed transaction described in the circular is, in the opinion of the directors, fair and reasonable and in the interests of the shareholders as a whole; and
                (d) contain a statement that any shareholder with a material interest in a proposed transaction and his close associates will abstain from voting on resolution(s) approving that transaction; and
                (3) a confirmation that, to the best of the directors' knowledge, information and belief having made all reasonable enquiry, the counterparty and the ultimate beneficial owner of the counterparty are third parties independent of the listed issuer and connected persons of the listed issuer.

              • 14.64 [Repealed]

                [Repealed 1 January 2009]

              • 14.65 [Repealed]

                [Repealed 1 January 2009]

            • Major transaction circulars (14.66-14.67)

              • 14.66

                A circular relating to a major transaction must contain:—

                (1) a prominent and legible disclaimer on the front cover or inside front cover of the circular in the form set out in rule 14.88;
                (2) the information regarding the listed issuer specified in the following paragraphs of Appendix 1, Part B:—

                1- name

                2- directors' responsibility

                5- expert statements

                29(2)- requirements if there is a profit forecast

                33- litigation statement

                35- details of secretary

                36- address of registered office and head office

                41- additional information on mineral companies (if applicable);
                (3) information regarding interests of directors and chief executive in the listed issuer required under paragraphs 34 and 38 of Appendix 1, Part B, and Practice Note 5;
                (4) information which is required to be included in the announcement under rule 14.60;
                (5) information concerning the effect of the transaction on the earnings and assets and liabilities of the listed issuer;
                (6) where a company either becomes a subsidiary or ceases to be a subsidiary of the listed issuer:—
                (a) the percentage of the company's issued shares (if any) held by the listed issuer after the acquisition or disposal; and
                (b) in the case of a disposal, a statement whether the remaining shares are to be sold or retained;
                (7) details of any existing or proposed service contracts of directors and proposed directors of the listed issuer, or an appropriate negative statement;

                Note: Details of contracts to expire or which may be terminated by the employer within a year without payment of any compensation (other than statutory compensation) need not be included.
                (8) information as to the competing interests (if any) of each of the directors and any proposed director of the issuer (excluding its subsidiaries) and his/her respective close associates (as if each of them were treated as a controlling shareholder under rule 8.10);
                (9) any additional information requested by the Exchange;
                (10) the information regarding the listed issuer specified in the following paragraphs of Appendix 1, Part B:—

                28- indebtedness

                29(1)(b)- financial and trading prospects

                30- sufficiency of working capital, which must take into account the effect of the transaction

                40- directors' and experts' interests in group assets

                42- material contracts

                43- documents on display;
                (11) where required by Chapter 5, the information under that Chapter on the property interest being acquired or disposed of by the listed issuer;
                (12) where the circular contains a statement as to the sufficiency of working capital, the Exchange will require a letter from the listed issuer's financial advisers or auditors confirming that:—
                (a) the statement has been made by the directors after due and careful enquiry; and
                (b) the persons or institutions providing finance have confirmed in writing that such facilities exist;
                (13) where applicable, the information required under rule 2.17, and
                (14) where applicable, the information required in Chapter 18.

              • 14.67

                In addition to the requirements set out in rule 14.66, a circular issued in relation to an acquisition constituting a major transaction must contain:—

                (1) the information required under paragraphs 9 and 10 of Appendix 1, Part B, if the acquisition involves securities for which listing will be sought;
                (2) the information required under paragraph 22(1) of Appendix 1, Part B, if new shares are to be issued as consideration;
                (3) where the consideration for a transaction includes the listed issuer's shares or securities that are convertible into the listed issuer's shares, a statement whether the transaction will result in a change of control of the listed issuer;
                (4) the information regarding the listed issuer required under paragraphs 31 (financial information) and 32 (no material adverse change) of Appendix 1, Part B;
                (5) the information required under paragraph 34 of Appendix 1, Part B in relation to each new director and member of senior management joining the listed issuer in connection with the transaction;

                Note: The fact that any director or proposed director is a director or employee of a company which has an interest or short position in the shares or underlying shares of the listed issuer which would fall to be disclosed to the listed issuer under the provisions in Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance need not be stated.
                (6)
                (a) on an acquisition of any business, company or companies:
                (i) an accountants' report on the business, company or companies being acquired in accordance with Chapter 4 of the Exchange Listing Rules provided that, where any company in question has not or will not become a subsidiary of the listed issuer, the Exchange may be prepared to relax this requirement. The accounts on which the report is based must relate to a financial period ended 6 months or less before the circular is issued. The financial information on the business, company or companies being acquired as contained in the accountants' report must be prepared using accounting policies which should be materially consistent with those of the listed issuer; and

                Note: Where the accountants can only give a qualified opinion in the accountants' report in respect of the acquisition of the business, company or companies, for example because the records of stock or work-in-progress are inadequate, the Exchange will not accept a written shareholders' approval for the transaction, but will require a general meeting to be held to consider the transaction. (See rule 14.86.) In these circumstances, listed issuers are urged to contact the Exchange as soon as possible.
                (ii) a pro forma statement of the assets and liabilities of the listed issuer's group combined with the assets and liabilities of the business, company or companies being acquired on the same accounting basis. The pro forma financial information must comply with Chapter 4 of the Exchange Listing Rules; and
                (b) on an acquisition of any revenue-generating assets (other than a business or company) with an identifiable income stream or assets valuation:
                (i) a profit and loss statement and valuation (where available) for the 3 preceding financial years (or less, where the asset has been held by the vendor for a shorter period) on the identifiable net income stream and valuation in relation to such assets which must be reviewed by the auditors or reporting accountants to ensure that such information has been properly compiled and derived from the underlying books and records. The financial information on which the profit and loss statement is based must relate to a financial period ended 6 months or less before the circular is issued. The financial information on the assets being acquired as contained in the circular must be prepared using accounting policies which should be materially consistent with those of the listed issuer;
                (ii) a pro forma statement of the assets and liabilities of the listed issuer's group combined with the assets being acquired on the same accounting basis. The pro forma financial information must comply with Chapter 4 of the Exchange Listing Rules; and
                (7) a discussion and analysis of results of the business, company or companies being acquired covering all those matters set out in paragraph 32 of Appendix 16 for the period reported in the accountants' report.

            • Inability to access information to compile circulars for major transactions or very substantial acquisitions (14.67A)

              • 14.67A

                (1) Where a listed issuer has acquired and/or agreed to acquire equity capital in a company and the transaction constitutes a major transaction or a very substantial acquisition, and the listed issuer does not have access or only has limited access to the non-public information on the target company that would be required for the purpose of complying with the disclosure requirements in respect of the target company and the enlarged group under rules 14.66 and 14.67 (for a major transaction) or rule 14.69 (for a very substantial acquisition), then the listed issuer may defer complying with certain of the disclosure requirements in the manner set out in paragraphs (2) and (3) below, provided that the following conditions are demonstrated to the satisfaction of the Exchange:
                (a) the unavailability of non-public information is caused by the lack of co-operation of the board of directors in the target company (such as in the case of a hostile takeover) and/or legal or regulatory restrictions in providing non-public information to the listed issuer;
                (b) the target company is listed on a regulated, regularly operating, open stock exchange recognised by the Exchange (including the Main Board or GEM); and
                (c) the target company will become a subsidiary of the listed issuer.
                (2) Subject to the conditions in paragraphs (1)(a), (b) and (c) being satisfied, the listed issuer may defer complying with the disclosure requirements for certain non-public information relating to the target company and/or the enlarged group. In such circumstances, the listed issuer must despatch an initial circular in partial compliance with rules 14.66 and 14.67 or rule 14.69 within the time frames stipulated in rules 14.41 and 14.42 or rules 14.48 and 14.52. The initial circular shall include, as a minimum, the following:
                (a) material public information (and other available information of which the listed issuer is aware and is free to disclose) of the target company to enable shareholders to make an informed voting decision with respect to the proposed acquisition. This would include:
                (i) published audited financial information of the target company for the preceding three years (and the latest published unaudited interim accounts) together with a qualitative explanation of the principal differences, if any, between the target company's accounting standards and those of the listed issuer's which may have a material impact on the financial statements of the target company; and
                (ii) other information of the target company and its group of companies in the public domain or made available by the target company and which the listed issuer is aware and free to disclose;
                (b) where information required for the enlarged group is not available, to include the following information regarding the issuer:
                (i) statement of indebtedness (see rule 14.66(10), paragraph 28 and Note 2 to Appendix 1, Part B);
                (ii) statement of sufficiency of working capital (see rule 14.66(10), paragraph 30 and Note 2 to Appendix 1, Part B);
                (iii) [Repealed 1 January 2012];
                (iv) discussion and analysis of results (this is applicable only to very substantial acquisitions, see rule 14.69(7));
                (v) statement as to the financial and trading prospects (see rule 14.66(10), paragraph 29(1)(b) and Note 2 to Appendix 1, Part B);
                (vi) particulars of any litigation or claims of material importance (see rule 14.66(2), paragraph 33 and Note 2 to Appendix 1, Part B);
                (vii) particulars of directors' or experts' interests in group assets (see rule 14.66(10), paragraph 40 and Note 2 to Appendix 1, Part B);
                (viii) material contracts and documents for inspection (see rule 14.66(10), paragraphs 42, 43 and Note 2 to Appendix 1, Part B); and
                (c) the reasons why access to books and records of the target company has not been granted to the listed issuer.
                (3) Where an initial circular has been despatched by a listed issuer under paragraph (2) above, the listed issuer must despatch a supplemental circular at a later date which contains: (i) all the prescribed information under rules 14.66 and 14.67 or rule 14.69 which has not been previously disclosed in the initial circular; and (ii) any material changes to the information previously disclosed in the initial circular. The supplemental circular must be despatched to shareholders within 45 days of the earlier of: the listed issuer being able to gain access to the target company's books and records for the purpose of complying with the disclosure requirements in respect of the target company and the enlarged group under rules 14.66 and 14.67 or rule 14.69; and the listed issuer being able to exercise control over the target company.

            • Very substantial disposal circulars (14.68)

              • 14.68

                A circular issued in relation to a very substantial disposal must contain:—

                (1) the information required under rules 14.66 and 14.70;
                (2)
                (a) on a disposal of a business, company or companies:
                (i) financial information of either:
                (A) the business, company or companies being disposed of; or
                (B) the listed issuer's group with the business, company or companies being disposed of shown separately as (a) disposal group(s) or (a) discontinuing operation(s),
                for the relevant period (as defined in the note to rule 4.06(1)(a)). The financial information must be prepared by the directors of the listed issuer using accounting policies of the listed issuer and must contain at least the income statement, balance sheet, cash flow statement and statement of changes in equity.

                The financial information must be reviewed by the listed issuer's auditors or reporting accountants according to the relevant standards published by the Hong Kong Institute of Certified Public Accountants or the International Auditing and Assurance Standards Board of the International Federation of Accountants or the China Auditing Standards Board of the China Ministry of Finance. The circular must contain a statement that the financial information has been reviewed by the issuer's auditors or reporting accountants and details of any qualifications or modifications in the review report; and

                Notes:
                1. The listed issuer may include an accountants' report instead of a review by its auditors or reporting accountants. In that case, the accountants' report must comply with Chapter 4 of the Exchange Listing Rules.
                2. The Exchange may be prepared to relax the requirements in this rule if the assets of the company or companies being disposed of are not consolidated in the issuer's accounts before the disposal.
                (ii) pro forma income statement, balance sheet and cash flow statement of the remaining group on the same accounting basis. The pro forma financial information must comply with Chapter 4 of the Exchange Listing Rules;
                (b) on a disposal of any revenue-generating assets (other than a business or company) with an identifiable income stream or assets valuation:
                (i) a profit and loss statement and valuation (where available) for the 3 preceding financial years (or less, where the asset has been held by the listed issuer for a shorter period) on the identifiable net income stream and valuation in relation to such assets which must be reviewed by the auditors or reporting accountants to ensure that such information has been properly compiled and derived from the underlying books and records. The financial information on which the profit and loss statement is based must relate to a financial period ended 6 months or less before the circular is issued; and
                (ii) a pro forma profit and loss statement and net assets statement on the remaining group on the same accounting basis. The pro forma financial information must comply with Chapter 4 of the Exchange Listing Rules;
                (3) the financial information required under paragraph 32 of Appendix 16 on the remaining group; and
                (4) the information regarding the listed issuer required under paragraph 32 (no material adverse change) of Appendix 1, Part B.

            • Very substantial acquisition circulars and reverse takeover listing documents (14.69)

              • 14.69

                A circular issued for a very substantial acquisition or a listing document issued for a reverse takeover must contain:—

                (1) for a reverse takeover,
                (a) the information required under rule 14.66 (except for the information required under rules 14.66(2), 14.66(3), 14.66(10), 14.66(11)) and rules 14.67(3) and 14.67(7);
                (b) the information required under Appendix 1, Part A, if it applies, except paragraphs 8, 15(2) (in respect of the 12 months before the issue of the circular or listing document) and 20(1). For paragraph 36, the statement on sufficiency of working capital must take into account the effect of the transaction; and
                (c) [Repealed 1 January 2009]
                (d) information on the enlarged group's property interests (as defined in rule 5.01(3)) under rules rule 5.01A and 5.01B;
                (2) for a very substantial acquisition, the information required under rules 14.66 to 14.67 (except for the information required under rule 14.67(6)) and rule 2.17;
                (3) [Repealed 1 January 2012];
                (4)
                (a) on an acquisition of any business, company or companies:
                (i) an accountants' report on the business, company or companies being acquired in accordance with Chapter 4 of the Exchange Listing Rules. The accounts on which the report is based must relate to a financial period ended 6 months or less before the listing document or circular is issued. The financial information on the business, company or companies being acquired as contained in the accountants' report must be prepared using accounting policies which should be materially consistent with those of the listed issuer; and
                (ii) pro forma income statement, balance sheet and cash flow statement of the enlarged group on the same accounting basis. The pro forma financial information must comply with Chapter 4 of the Exchange Listing Rules;
                (b) on an acquisition of any revenue-generating assets (other than a business or a company) with an identifiable income stream or assets valuation:
                (i) a profit and loss statement and valuation (where available) for the 3 preceding financial years (or less, where, other than in the case of a reverse takeover, the asset has been held by the vendor for a shorter period) on the identifiable net income stream and valuation in relation to such assets which must be reviewed by the auditors or reporting accountants to ensure that such information has been properly compiled and derived from the underlying books and records. The financial information on which the profit and loss statement is based must relate to a financial period ended 6 months or less before the listing document or circular is issued. The financial information on the assets being acquired as contained in the listing document or circular must be prepared using accounting policies which should be materially consistent with those of the listed issuer; and
                (ii) a pro forma profit and loss statement and net assets statement on the enlarged group on the same accounting basis. The pro forma financial information must comply with Chapter 4 of the Exchange Listing Rules;
                (5) where the transaction also involves a disposal by the listed issuer, the information required under rule 14.70(2);
                (6) general information on the trend of the business of the group since the date to which the accounts of the listed issuer were made up and a statement as to the financial and trading prospects of the group for at least the current financial year (together with any material information which may be relevant); and
                (7) in respect of a circular issued in relation to a very substantial acquisition a separate discussion and analysis of the performance of each of the existing group and any business or company acquired or to be acquired for the relevant period referred to in rule 4.06(1)(a), in both cases covering all those matters set out in paragraph 32 of Appendix 16.

            • Additional requirements for circulars in respect of disposals (14.70)

              • 14.70

                In addition to the requirements set out in rule 14.66, a circular issued in relation to a disposal constituting a major transaction must contain:—

                (1) the intended application of the sale proceeds (including whether such proceeds will be used to invest in any assets) and, if the sale proceeds include securities, whether they are to be listed or not; and
                (2) the excess or deficit of the consideration over or under the net book value of the asset(s).

            • Circulars for specific types of companies (14.71-14.71A)

              • 14.71

                Where a major transaction, very substantial acquisition, very substantial disposal or reverse takeover involves acquiring or disposing of an interest in an infrastructure project or an infrastructure or project company, the listed issuer shall incorporate in the circular or listing document a business valuation report on the business or company being acquired or disposed of and/or traffic study report in respect of the infrastructure project or infrastructure or project company. Such report(s) must clearly set out:

                (1) all fundamental underlying assumptions including discount rate or growth rate used; and
                (2) a sensitivity analysis based on the various discount rates and growth rates.

                Where any business valuation is based on a profit forecast, the accounting policies and calculations for the underlying forecasts must be examined and reported on by the auditors or reporting accountants. Any financial adviser mentioned in the circular or listing document must also report on the underlying forecasts.

                Note: On profit forecasts, see also rules 14.61 and 14.62.

              • 14.71A

                Where a discloseable transaction, major transaction or very substantial acquisition involves a Qualified Property Acquisition as described in Note to rule 14A.101, the Qualified Issuer shall comply with additional announcement and reporting requirements with details as described in Chapter 14A.

          • Options

            • 14.72

              In this Chapter and Chapter 14A:—

              (1) "option" means the right, but not the obligation, to buy or sell something;

              Notes: The term "option" for the purposes of this Chapter and Chapter 14A does not refer to:—
              1. options, warrants and similar rights to subscribe for or purchase equity securities of a listed issuer under Chapter 15 of the Exchange Listing Rules;
              2. structured products under Chapter 15A of the Exchange Listing Rules;
              3. convertible equity securities under Chapter 16 of the Exchange Listing Rules;
              4. options granted pursuant to a share option scheme under Chapter 17 of the Exchange Listing Rules;
              5. options, warrants and similar rights to subscribe for or purchase debt securities of a listed issuer under Chapter 27 of the Exchange Listing Rules;
              6. convertible debt securities under Chapter 28 of the Exchange Listing Rules; or
              7. Options Contracts traded through the Options System as defined in the Options Trading Rules of the Exchange and the Options Clearing Rules of The SEHK Options Clearing House Limited.
              (2) "exercise price" means the price at which the option holder is entitled to buy or sell the subject matter of the option;
              (3) "premium" is the price paid and/or payable by an option holder to acquire an option; and
              (4) "expiration" is the time at which the option can no longer be exercised.

            • 14.73

              The grant, acquisition, transfer or exercise of an option by a listed issuer will be treated as a transaction and classified by reference to the percentage ratios. The termination of an option by a listed issuer will be treated as a transaction and classified by reference to the percentage ratio, unless the termination is in accordance with the terms of the original agreement entered into by the listed issuer and does not involve payment of any amounts by way of penalty, damages or other compensation. The listed issuer must comply with the requirements of the relevant classification and other specific requirements of rules 14.74 to 14.77.

            • 14.74

              The following apply to an option involving a listed issuer, the exercise of which is not at the listed issuer's discretion:—

              (1) on the grant of the option, the transaction will be classified as if the option had been exercised. For the purpose of the percentage ratios, the consideration includes the premium and the exercise price of the option; and
              (2) on the exercise or transfer of such option, such exercise or transfer must be announced by the listed issuer by means of an announcement published in accordance with rule 2.07C as soon as reasonably practicable if the grant of the option has previously been announced pursuant to the requirements of this Chapter.

            • 14.75

              The following apply to an option involving a listed issuer, the exercise of which is at the listed issuer's discretion:—

              (1) on the acquisition by, or grant of the option to, the listed issuer, only the premium will be taken into consideration for the purpose of classification of notifiable transactions. Where the premium represents 10% or more of the sum of the premium and the exercise price, the value of the underlying assets, the profits and revenue attributable to such assets, and the sum of the premium and the exercise price will be used for the purpose of the percentage ratios; and
              (2) on the exercise of such option by the listed issuer, the exercise price, the value of the underlying assets and the profits and revenue attributable to such assets, will be used for the purpose of the percentage ratios. Where an option is exercised in stages, the Exchange may at any stage as the Exchange may consider appropriate require the listed issuer to aggregate each partial exercise of the option and treat them as if they were one transaction (see rules 14.22 and 14.23).

            • 14.76

              (1) For the purpose of rules 14.74(1) and 14.75(1), where, on the grant of the option, the actual monetary value of each of the premium, the exercise price, the value of the underlying assets and the profits and revenue attributable to such assets has not been determined, the listed issuer must demonstrate to the satisfaction of the Exchange the highest possible monetary value, which value will then be used for the purpose of classification of notifiable transaction. Failure to do so will result in the transaction being classified as at least a major transaction. The listed issuer must inform the Exchange of the actual monetary value of each of the premium, the exercise price, the value of the underlying assets and the profits and revenue attributable to such assets as soon as it has been determined. If the actual monetary value results in the transaction falling within a higher classification of notifiable transaction, the listed issuer must announce this fact by means of an announcement which is published in accordance with rule 2.07C as soon as reasonably practicable and comply with the additional requirements of such higher classification.
              (2) The listed issuer may, at the time of entering into an option, seek any shareholders' approval necessary for the exercise of the option (in addition to seeking any shareholders' approval necessary for the entering into of the option). Such approval, if obtained, will be sufficient for satisfying the shareholders' approval requirement of this Chapter 14, provided that the actual monetary value of the total consideration payable upon exercise and all other relevant information are known and disclosed to the shareholders at the time such approval is obtained and there has been no change in any relevant facts at the time of exercise.

            • 14.77

              If the grant or acquisition of an option has previously been announced pursuant to the requirements of this Chapter, the listed issuer must, as soon as reasonably practicable, upon:—

              (1) the expiry of the option;
              (2) the option holder notifying the grantor that the option will not be exercised; or
              (3) the transfer by the option holder of the option to a third party

              (whichever is the earliest) announce such fact by means of an announcement which is published in accordance with rule 2.07C. If the listed issuer is the option holder, the transfer of the option will also be treated as a transaction and classified for the purpose of the percentage ratios. The consideration for the transfer of the option will be used for the purpose of classification.

          • Takeovers and mergers

            • Takeovers Code (14.78-14.79)

              • 14.78

                Listed issuers and their directors must comply with the Takeovers Code. Any breach of the Takeovers Code will be deemed to be a breach of the Exchange Listing Rules. The Exchange may penalise the listed issuer and/or its directors for breaches in accordance with the disciplinary powers contained in Chapter 2A of the Exchange Listing Rules.

              • 14.79 [Repealed]

                [Repealed 1 January 2011]

            • Listing document (14.80)

              • 14.80

                If the consideration under the takeover offer includes securities for which listing is being or is to be sought, the offer document(s) will constitute a listing document. Provided that the offer document complies with the Takeovers Code, it need not comply with rules 11.06 and 11.07.

            • Contents of offer document (14.81)

              • 14.81

                The offer document must contain:—

                (1) a statement whether or not the offeror intends to continue the listing of the listed issuer;
                (2) details of any agreement reached with the Exchange to ensure that the basic condition for listing set out in rule 8.08 will be complied with in respect of the listed issuer;
                (3) a prominent and legible statement in the following form:

                "The Stock Exchange of Hong Kong Limited (the "Exchange") has stated that if, at the close of the offer, less than the minimum prescribed percentage applicable to the listed issuer, being [ ]% of the issued shares, are held by the public, or if the Exchange believes that:—
                •   a false market exists or may exist in the trading of the shares; or
                •   that there are insufficient shares in public hands to maintain an orderly market;
                it will consider exercising its discretion to suspend dealings in the shares.

                [[The Offeror] intends [the listed issuer] to remain listed on the Exchange. The directors of [the Offeror] and the new directors to be appointed to the Board of [the listed issuer] will jointly and severally undertake to the Exchange to take appropriate steps to ensure that sufficient public float exists in [the listed issuer]'s shares.]"
                (4) any other requirements imposed by the Exchange which are not inconsistent with the Takeovers Code.

          • Cash companies

            • 14.82

              Where for any reason (including immediately after completion of a notifiable transaction or connected transaction) the assets of a listed issuer (other than an "investment company" as defined in Chapter 21 of the Exchange Listing Rules) consist wholly or substantially of cash or short-dated securities, it will not be regarded as suitable for listing and trading in its securities will be suspended. "Short-dated securities" means securities such as bonds, bills or notes which have less than 1 year to maturity.

            • 14.83

              A listed issuer which is solely or mainly engaged in the securities brokerage business will not be subject to rule 14.82.

            • 14.84

              The listed issuer may apply to the Exchange to lift the suspension once it has a business suitable for listing. The Exchange will treat its application for lifting of the suspension as if it were an application for listing from a new applicant. The listed issuer will be required, among other things, to issue a listing document containing the specific information required by Appendix 1 Part A, and pay the non-refundable initial listing fee. The Exchange reserves the right to cancel the listing if such suspension continues for more than 12 months or in any other case where it considers it necessary. It is therefore advisable to consult the Exchange at the earliest possible opportunity in each case.

          • General

            • 14.85

              Listed issuers must complete and submit any checklist(s) in such form as may be prescribed by the Exchange from time to time in respect of any notifiable transaction.

            • 14.86

              Shareholders' approval is required for an acquisition that requires an accountants' report under this Chapter where the reporting accountants can only give a qualified opinion in the accountants' report in respect of the acquisition of the businesses or companies, for example, because of the absence of adequate records in relation to stock and work-in-progress. In such cases, the Exchange will not accept a written shareholders' approval for the transaction, but will require a general meeting to be held to consider the transaction.

            • 14.87

              A listed issuer may send to any shareholder the English language version only or the Chinese language version only of any circular required under this Chapter subject to compliance with rule 2.07B.

          • Disclaimer

            • 14.88

              Any circular or announcement issued by a listed issuer pursuant to this Chapter must contain on its front cover or inside front cover, or as a heading, a prominent and legible disclaimer statement as follows:—

              "Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this [circular]/[announcement], make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this [circular]/[announcement]."

          • Material changes

            • 14.89

              With the exception of a listed issuer that has successfully transferred its listing from GEM to the Main Board pursuant to Chapter 9A, in the period of 12 months from the date on which dealings in the securities of a listed issuer commence on the Exchange, the listed issuer shall not effect any acquisition, disposal or other transaction or arrangement, or a series of acquisitions, disposals or other transactions or arrangements, which would result in a fundamental change in the principal business activities of the listed issuer as described in the listing document issued at the time of its application for listing.

              Note: For this purpose, transactions subsequent to the listing will be aggregated as prescribed in rules 14.22 and 14.23.

            • 14.90

              The Exchange may grant a listed issuer a waiver of the requirements of rule 14.89:—

              (1) if it is satisfied that the circumstances surrounding the proposed fundamental change are exceptional; and
              (2) subject to the acquisition, disposal or other transaction or arrangement, or series of acquisitions, disposals or other transactions or arrangements, being approved by shareholders in general meeting by a resolution on which any controlling shareholder (or, where there are no controlling shareholders, any chief executive or directors (excluding independent non-executive directors) of the listed issuer) and their respective associates shall abstain from voting in favour. Any shareholders with a material interest in the transaction and their associates shall abstain from voting on resolution(s) approving such transaction at a general meeting called for the purpose of this rule. The listed issuer must disclose the information required under rule 2.17 in the circular to shareholders.

            • 14.91

              In respect of the shareholders' approval required under rule 14.90(2):

              (1) the Exchange reserves the right to require the following parties to abstain from voting in favour of the relevant resolutions at the general meeting:
              (a) any parties who were controlling shareholders at the time the decision for the transaction or arrangement was made or approved by the board, and their associates; or
              (b) where there were no such controlling shareholders, directors (excluding independent non-executive directors) and the chief executive of the listed issuer at the time the decision for the transaction or arrangement was made or approved by the board, and their respective associates.
              The listed issuer must disclose the information required under rule 2.17 in the circular to shareholders; and
              (2) the listed issuer must comply with rules 13.39(6) and (7), 13.40, 13.41 and 13.42.

          • Restriction on Disposal

            • 14.92

              A listed issuer may not dispose of its existing business for a period of 24 months after a change in control (as defined in the Takeovers Code) unless the assets acquired from the person or group of persons gaining such control or his/their associates and any other assets acquired by the listed issuer after such change in control can meet the trading record requirement of rule 8.05.

            • 14.93

              A disposal by a listed issuer which does not meet the requirement under rule 14.92 will result in the listed issuer being treated as a new listing applicant.

        • Chapter 14A Connected Transactions

          • Introduction

            • 14A.01

              This Chapter applies to connected transactions entered into by a listed issuer or its subsidiaries. The connected transaction rules ensure that the interests of shareholders as a whole are taken into account by the listed issuer when the listed issuer's group enters into a connected transaction.

            • 14A.02

              Connected transactions include both capital and revenue nature transactions. They may be one-off transactions or continuing transactions.

            • 14A.03

              The general requirements for connected transactions include disclosures in announcements, circulars and annual reports, and shareholders' approval. Persons with material interests cannot vote on the resolution approving the transaction. Continuing connected transactions also require annual reviews by independent non-executive directors and the auditors.

            • 14A.04

              To reduce listed issuers' compliance burden, exemptions and waivers from all or some of the connected transaction requirements are available for specific categories of connected transactions. These apply to connected transactions that are immaterial to the listed issuer's group, or specific circumstances where the risk of abuse by connected persons is low.

            • 14A.05

              The rules in this Chapter are illustrated with diagrams. If there is any conflict between the rules and the diagrams, the rules prevail.

          • Definitions

            • 14A.06

              In this Chapter, the following definitions apply:

              (1) a "30%-controlled company" means a company held by a person who can:
              (a) exercise or control the exercise of 30% (or an amount for triggering a mandatory general offer under the Takeovers Code, or for PRC issuers only, an amount for triggering a mandatory general offer or establishing legal or management control over a business enterprise under the PRC law) or more of the voting power at general meetings; or
              (b) control the composition of a majority of the board of directors;
              (2) an "associate" has the meaning in rules 14A.12 to 14A.15;
              (3) a "banking company" has the meaning in rule 14A.88;
              (4) a "cap" has the meaning in rule 14A.53;
              (5) a "closely allied group of shareholders" has the meaning in rule 14.45;
              (6) a "commonly held entity" has the meaning in rule 14A.27;
              (7) a "connected person" has the meaning in rules 14A.07 to 14A.11;
              (8) a "connected person at the issuer level" includes:
              (a) a director, chief executive or substantial shareholder of a listed issuer;
              (b) a supervisor of a PRC issuer;
              (c) a person who was a director of the listed issuer in the last 12 months; and
              (d) an associate of any of the above persons;
              (9) a "connected person at the subsidiary level" means a person who is a connected person only because of the person's connection with the listed issuer's subsidiary or subsidiaries;
              (10) a "connected subsidiary" has the meaning in rule 14A.16;
              (11) a "connected transaction" has the meaning in rules 14A.23 to 14A.30;
              (12) a "continuing connected transaction" has the meaning in rule 14A.31;
              (13) a "controller" has the meaning in rule 14A.28(1);
              (14) a "deemed disposal" has the meaning in rule 14.29;
              (15) a company "directly held" by an individual or an entity means that the individual or the entity has a direct ownership interest in the company;
              (16) a "family member" has the meaning in rule 14A.12(2)(a);
              (17) "financial assistance" has the meaning in rule 14A.24(4);
              (18) an "immediate family member" has the meaning in rule 14A.12(1)(a);
              (19) a company "indirectly held" by an individual or an entity means that the individual or the entity has an indirect ownership interest in the company through (in the case of an individual) his majority controlled company or companies or (in the case of an entity) its subsidiary or subsidiaries;
              (20) an "insignificant subsidiary" or "insignificant subsidiaries" has the meaning in rule 14A.09;
              (21) a "listed issuer" means a company or other legal person whose securities (including depositary receipts) are listed;
              (22) a "listed issuer's group" means a listed issuer and its subsidiaries, or any of them;
              (23) a "majority-controlled company" means a company held by a person who can exercise or control the exercise of more than 50% of the voting power at general meetings, or control the composition of a majority of the board of directors;
              (24) "material interest" in a transaction has the meaning in rules 2.15 and 2.16;
              (25) a "monetary advantage" has the meaning in rule 14.12;
              (26) "normal commercial terms or better" are terms which a party could obtain if the transaction were on an arm's length basis or terms no less favourable to the listed issuer's group than terms available to or from independent third parties;
              (27) an "option" and terms related to it (including "exercise price", "premium" and "expiration") have the meaning in rule 14.72;
              (28) "ordinary and usual course of business" of an entity means the entity's existing principal activities or an activity wholly necessary for its principal activities;
              (29) a "passive investor" has the meaning in rule 14A.100;
              (30) "percentage ratios" has the meaning in rule 14.04(9);
              (31) a "PRC Governmental Body" has the meaning in rule 19A.04;
              (32) a "profit forecast" has the meaning in rule 14.61;
              (33) a "qualified connected person" means a connected person of the qualified issuer solely because he or it is a substantial shareholder (or its associate) in one or more of the qualified issuer's non wholly-owned subsidiaries formed to participate in property projects, each of which is single purpose and project specific. This person may or may not have representation on the board of the subsidiary or subsidiaries;
              (34) a "qualified issuer" has the meaning in rule 14.04(10B);
              (35) a "qualified property acquisition" has the meaning in rule 14.04(10C);
              (36) a "recognised stock exchange" means a regulated, regularly operating, open stock market recognised for this purpose by the Exchange;
              (37) a "relative" has the meaning in rule 14A.21(1)(a);
              (38) a "transaction" has the meaning in rule 14A.24; and
              (39) "trustees" has the meaning in rule 14A.12(1)(b) or 14A.13(2).

          • Definition of connected person

            • 14A.07

              A "connected person" is:

              (1) a director, chief executive or substantial shareholder of the listed issuer or any of its subsidiaries;
              (2) a person who was a director of the listed issuer or any of its subsidiaries in the last 12 months;
              (3) a supervisor of a PRC issuer or any of its subsidiaries;
              (4) an associate of any of the above persons;
              (5) a connected subsidiary; or
              (6) a person deemed to be connected by the Exchange.

              Diagram 1

            • 14A.08

              Where a listed issuer is an investment company listed under Chapter 21, its connected persons also include an investment manager, investment adviser or custodian (or any connected person of any of them).

          • Exceptions

            • Persons connected with insignificant subsidiaries (14A.09)

              • 14A.09

                Rules 14A.07(1) to (3) do not include a director, chief executive, substantial shareholder or supervisor of the listed issuer's insignificant subsidiary or subsidiaries. For this purpose:

                (1) an "insignificant subsidiary" is a subsidiary whose total assets, profits and revenue compared to that of the listed issuer's group are less than:
                (a) 10% under the percentage ratios for each of the latest three financial years (or if less, the period since the incorporation or establishment of the subsidiary); or
                (b) 5% under the percentage ratios for the latest financial year;
                (2) if the person is connected with two or more subsidiaries of the listed issuer, the Exchange will aggregate the subsidiaries' total assets, profits and revenue to determine whether they are together "insignificant subsidiaries" of the listed issuer; and
                (3) when calculating the percentage ratios, 100% of the subsidiary's total assets, profits and revenue will be used. If a percentage ratio produces an anomalous result, the Exchange may disregard the calculation and consider alternative test(s) provided by the listed issuer.

            • PRC Governmental Body (14A.10)

              • 14A.10

                The Exchange will not normally treat a PRC Governmental Body as a connected person. The Exchange may request a listed issuer to explain its relationship with a PRC Governmental Body and why it should not be treated as a connected person. If the Exchange decides to treat the PRC Governmental Body as a connected person, the listed issuer must comply with any additional requirements requested by the Exchange.

            • Depositary (14A.11)

              • 14A.11

                For a listing of depositary receipts, a person holding shares of a listed issuer as a depositary will not be treated as:

                (1) an associate of the holder of the depositary receipts; or
                (2) a substantial shareholder or controlling shareholder of the listed issuer.

          • Definition of associate

            • 14A.12

              An "associate" of a connected person described in rule 14A.07(1), (2) or (3) who is an individual includes:

              (1)
              (a) his spouse; his (or his spouse's) child or step-child, natural or adopted, under the age of 18 years (each an "immediate family member");

              Diagram 2

              (b) the trustees, acting in their capacity as trustees of any trust of which the individual or his immediate family member is a beneficiary or, in the case of a discretionary trust, is (to his knowledge) a discretionary object (other than a trust which is an employees' share scheme or occupational pension scheme established for a wide scope of participants and the connected persons' aggregate interests in the scheme are less than 30%) (the "trustees"); or
              (c) a 30%-controlled company held, directly or indirectly, by the individual, his immediate family members and/or the trustees (individually or together), or any of its subsidiaries; or

              Diagram 3

              (2)
              (a) a person cohabiting with him as a spouse, or his child, step-child, parent, stepparent, brother, step-brother, sister or step-sister (each a "family member"); or

              Diagram 4

              (b) a majority-controlled company held, directly or indirectly, by the family members (individually or together), or held by the family members together with the individual, his immediate family members and/or the trustees, or any of its subsidiaries.

              Diagram 5

            • 14A.13

              An "associate" of a connected person described in rule 14A.07(1), (2) or (3) which is a company includes:

              (1) its subsidiary or holding company, or a fellow subsidiary of the holding company;
              (2) the trustees, acting in their capacity as trustees of any trust of which the company is a beneficiary or, in the case of a discretionary trust, is (to its knowledge) a discretionary object (the "trustees"); or
              (3) a 30%-controlled company held, directly or indirectly, by the company, the companies referred to in (1) above, and/or the trustees (individually or together), or any of its subsidiaries.

              Diagram 6

            • 14A.14

              A 30%-controlled company held by a person will not be regarded as his or its associate if the person's and his or its associates' interests in the company, other than those indirectly held through the listed issuer's group, are together less than 10%.

              Diagram 7

            • 14A.15

              For PRC issuers only, a person's associates include any joint venture partner of a cooperative or contractual joint venture (whether or not it is a separate legal entity) where:

              (1) the person (being an individual), his immediate family members and/or the trustees; or
              (2) the person (being a company), any company which is its subsidiary or holding company or a fellow subsidiary of the holding company, and/or the trustees,

              together directly or indirectly hold 30% (or an amount that would trigger a mandatory general offer or establish legal or management control over a business enterprise under the PRC law) or more in the joint venture's capital or assets contributions, or the contractual share of its profits or other income.

              Diagram 8

              Diagram 9

          • Definition of connected subsidiary

            • 14A.16

              A "connected subsidiary" is:

              (1) a non wholly-owned subsidiary of the listed issuer where any connected person(s) at the issuer level, individually or together, can exercise or control the exercise of 10% or more of the voting power at the subsidiary's general meeting. This 10% excludes any indirect interest in the subsidiary which is held by the connected person(s) through the listed issuer; or
              (2) any subsidiary of a non wholly-owned subsidiary referred to in (1) above.

            • 14A.17

              If a listed issuer's subsidiaries are connected persons only because they are the subsidiaries of a connected subsidiary, transactions between these subsidiaries will not be treated as connected transactions.

              Diagram 10

              Diagram 11

            • 14A.18

              A subsidiary of the listed issuer is not a connected person if:

              (1) it is directly or indirectly wholly-owned by the listed issuer; or

              Diagram 12

              (2) it falls under the definition of connected person only because it is:
              (a) a substantial shareholder of another subsidiary of the listed issuer; or

              Diagram 13

              (b) an associate of a director (or a person who was in the past 12 months a director), a chief executive, a substantial shareholder or a supervisor of any subsidiary of the listed issuer.

              Diagram 14

          • Deemed connected persons

            • 14A.19

              The Exchange has the power to deem any person to be a connected person.

            • 14A.20

              A deemed connected person includes a person:

              (1) who has entered, or proposes to enter, into:
              (a) a transaction with the listed issuer's group; and
              (b) an agreement, arrangement, understanding or undertaking (whether formal or informal and whether express or implied) with a connected person described in rule 14A.07(1), (2) or (3) with respect to the transaction; and
              (2) who, in the Exchange's opinion, should be considered as a connected person.

            • 14A.21

              A deemed connected person also includes a person

              (1) who is:
              (a) a father in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, grandparent, grandchild, uncle, aunt, cousin, nephew or niece (each a "relative") of a connected person described in rule 14A.07(1), (2) or (3); or

              Diagram 15

              (b) a majority-controlled company held, directly or indirectly, by the relatives (individually or together) or held by the relatives together with the connected person as described in rule 14A.07(1), (2) or (3), the trustees, his immediate family members and/or family members, or any subsidiary of that majority-controlled company; and

              Diagram 16

              (2) whose association with the connected person is such that, in the Exchange's opinion, the proposed transaction should be subject to the connected transaction requirements.

            • 14A.22

              The listed issuer must inform the Exchange of any proposed transaction with the person described in rule 14A.20(1) or 14A.21(1) unless it is exempt from all of the connected transaction requirements. It must provide information to the Exchange to demonstrate whether or not the transaction should be subject to connected transaction requirements.

          • What are connected transactions

            • 14A.23

              Connected transactions are transactions with connected persons, and specified categories of transactions with third parties that may confer benefits on connected persons through their interests in the entities involved in the transactions. They may be one-off transactions or continuing transactions.

            • 14A.24

              "Transactions" include both capital and revenue nature transactions, whether or not conducted in the ordinary and usual course of business of the listed issuer's group. This includes the following types of transactions:

              (1) any acquisition or disposal of assets by a listed issuer's group including a deemed disposal;
              (2)
              (a) a listed issuer's group granting, accepting, exercising, transferring or terminating an option to acquire or dispose of assets or to subscribe for securities; or

              Note: Terminating an option is not a transaction if it is made under the terms of the original agreement and the listed issuer's group has no discretion over the termination.
              (b) a listed issuer's group deciding not to exercise an option to acquire or dispose of assets or to subscribe for securities;
              (3) entering into or terminating finance leases or operating leases or sub-leases;
              (4) granting an indemnity or providing or receiving financial assistance. "Financial assistance" includes granting credit, lending money, or providing an indemnity against obligations under a loan, or guaranteeing or providing security for a loan;
              (5) entering into an agreement or arrangement to set up a joint venture in any form (e.g. a partnership or a company), or any other form of joint arrangement;
              (6) issuing new securities of the listed issuer or its subsidiaries;
              (7) providing, receiving or sharing services; or
              (8) acquiring or providing raw materials, intermediate products and/or finished goods.

          • Transactions with connected persons

            • 14A.25

              Any transaction between a listed issuer's group and a connected person is a connected transaction.

          • Transactions with third parties

            • Financial assistance to or from commonly held entities (14A.26-14A.27)

              • 14A.26

                Financial assistance provided by a listed issuer's group to, or received by a listed issuer's group from, a commonly held entity is a connected transaction.

              • 14A.27

                A "commonly held entity" is a company whose shareholders include:

                (1) a member of the listed issuer's group; and
                (2) any connected person(s) at the issuer level who, individually or together, can exercise or control the exercise of 10% or more of the voting power at the company's general meeting. This 10% excludes any indirect interest held by the person(s) through the listed issuer.

                Diagram 17

            • Other transactions with third parties (14A.28-14A.30)

              • 14A.28

                A listed issuer's group acquiring an interest in a company (the "target company") from a person who is not a connected person is a connected transaction if the target company's substantial shareholder:

                (1) is, or is proposed to be, a controller. A "controller" is a director, chief executive or controlling shareholder of the listed issuer; or
                (2) is, or will, as a result of the transaction, become, an associate of a controller or proposed controller.

                Note: Acquiring the target company's assets is also a connected transaction if these assets account for 90% or more of the target company's net assets or total assets.

                Diagram 18

              • 14A.29

                The Exchange may aggregate the interests of the controller and his or its associates in the target company to decide whether they together are the target company's substantial shareholder.

              • 14A.30

                Rule 14A.28 does not apply to a listed issuer's proposed acquisition if the controller or his or its associate(s) is or are together the target company's substantial shareholders only because of their indirect shareholdings in the target company held through the listed issuer's group.

                Diagram 19

          • Definition of continuing connected transaction

            • 14A.31

              Continuing connected transactions are connected transactions involving the provision of goods or services or financial assistance, which are carried out on a continuing or recurring basis and are expected to extend over a period of time. They are usually transactions in the ordinary and usual course of business of the listed issuer's group.

          • Requirements for connected transactions

            • 14A.32

              This section sets out the requirements for connected transactions.

            • 14A.33

              Exemptions or waivers from all or some of the requirements are available for specified categories of connected transactions. See rules 14A.73 to 14A.105.

          • Written agreement

            • 14A.34

              The listed issuer's group must enter into a written agreement for a connected transaction.

          • Announcement

            • 14A.35

              The listed issuer must announce the connected transaction as soon as practicable after its terms have been agreed. See rule 14A.68 for the content requirements.

              Note: If the connected transaction is subsequently terminated or there is any material variation of its terms or material delay in the completion, the listed issuer must announce this fact as soon as practicable. The listed issuer must also comply with all other applicable provisions under the Rules.

          • Shareholders' approval

            • 14A.36

              The connected transaction must be conditional on shareholders' approval at a general meeting held by the listed issuer. Any shareholder who has a material interest in the transaction must abstain from voting on the resolution.

            • 14A.37

              The Exchange may waive the general meeting requirement and accept a written shareholders' approval, subject to the conditions that:

              (1) no shareholder of the listed issuer is required to abstain from voting if a general meeting is held to approve the transaction; and
              (2) the approval is given by a shareholder or a closely allied group of shareholders who (together) hold more than 50% of the voting rights in the general meeting.

            • 14A.38

              If the listed issuer discloses inside information to any shareholder in confidence to solicit the written approval, it must ensure that the shareholder is aware that he must not deal in the securities before the information has been made available to the public.

            • 14A.39

              If the connected transaction requires shareholders' approval, the listed issuer must (1) set up an independent board committee; and (2) appoint an independent financial adviser.

            • Independent board committee (14A.40-14A.43)

              • 14A.40

                The independent board committee must, taking into account the recommendation of an independent financial adviser, advise the listed issuer's shareholders:

                (1) whether the terms of the connected transaction are fair and reasonable;
                (2) whether the connected transaction is on normal commercial terms or better and in the ordinary and usual course of business of the listed issuer's group;
                (3) whether the connected transaction is in the interests of the listed issuer and its shareholders as a whole; and
                (4) how to vote on the connected transaction.

              • 14A.41

                The independent board committee must consist only of independent non-executive directors who do not have a material interest in the transaction.

              • 14A.42

                If all the independent non-executive directors have a material interest in the transaction, an independent board committee will not be formed.

              • 14A.43

                If an independent board committee is formed, the circular must include a letter from the independent board committee containing its opinion on the matters in rule 14A.40 and its recommendation.

            • Independent financial adviser (14A.44-14A.45)

              • 14A.44

                The listed issuer must appoint an independent financial adviser acceptable to the Exchange to make recommendations to the independent board committee and shareholders on the matters in rules 14A.45(1) to (4). The independent financial adviser will give its opinion based on the written agreement for the transaction.

              • 14A.45

                The circular must include a letter from the independent financial adviser containing its opinion and recommendation. The independent financial adviser's letter must also set out the reasons for its opinion, the key assumptions made, the factors that it has taken into consideration in forming the opinion, and a statement whether:

                (1) the terms of the connected transaction are fair and reasonable;
                (2) the connected transaction is on normal commercial terms or better and in the ordinary and usual course of business of the listed issuer's group;
                (3) the connected transaction is in the interests of the listed issuer and its shareholders as a whole; and
                (4) the shareholders should vote in favour of the connected transaction.

          • Circular

            • 14A.46

              The listed issuer must send a circular to its shareholders:

              (1) at the same time or before the listed issuer gives notice of the general meeting if the connected transaction is to be approved by shareholders in a general meeting; or
              (2) if no general meeting is to be held, within 15 business days after publication of the announcement. The listed issuer may apply for a waiver from this requirement if it requires additional time to prepare the circular.

              Note: See rules 14A.69 and 14A.70 for the content requirements.

            • 14A.47

              If the listed issuer expects a delay in distribution of the circular by the date previously announced (see rule 14A.68(11)), it must announce this fact, the reason for the delay and the new expected date of distribution of the circular as soon as practicable and in any event before the original despatch date.

            • Supplementary circular or announcement (14A.48)

              • 14A.48

                If the listed issuer is aware of any material information relating to the connected transaction after it has issued the circular, it must publish this information in a supplementary circular or announcement at least 10 business days before the date of the general meeting to consider the transaction. The meeting must be adjourned by the chairman or, if that is not permitted by the listed issuer's constitutional documents, by resolution to that effect if it is necessary for the compliance with the 10 business day requirement. (See rule 13.73 for the factors that the listed issuer should consider when deciding whether to issue a supplementary circular or announcement.)

          • Annual reporting

            • 14A.49

              The listed issuer must disclose its connected transactions conducted during the financial year in its annual report. See rules 14A.71 and 14A.72 for the content requirements.

          • Requirements for continuing connected transactions

            • 14A.50

              The following additional requirements apply to a continuing connected transaction.

            • Terms of an agreement (14A.51-14A.52)

              • 14A.51

                A written agreement for a continuing connected transaction must contain the basis for calculating the payments to be made. Examples include sharing of costs incurred by the parties, unit prices for goods or services provided, annual rental for leasing a property, or management fees based on a percentage of the total construction cost.

              • 14A.52

                The period for the agreement must be fixed and reflect normal commercial terms or better. It must not exceed three years except in special circumstances where the nature of the transaction requires a longer period. In this case, the listed issuer must appoint an independent financial adviser to explain why the agreement requires a longer period and to confirm that it is normal business practice for agreements of this type to be of such duration.

            • Annual cap (14A.53)

              • 14A.53

                The listed issuer must set an annual cap (the "cap") for the continuing connected transaction. The cap must be:

                (1) expressed in monetary terms;
                (2) determined by reference to previous transactions and figures in the published information of the listed issuer's group. If there were no previous transactions, the cap must be set based on reasonable assumptions; and
                (3) approved by shareholders if the transaction requires shareholders' approval.

            • Changes to cap or terms of agreement (14A.54)

              • 14A.54

                The listed issuer must re-comply with the announcement and shareholders' approval requirements before:

                (1) the cap is exceeded; or
                (2) it proposes to renew the agreement or to effect a material change to its terms.

                Note: The revised or new cap(s) will be used to calculate the percentage ratios for classifying the continuing connected transaction.

            • Annual review by independent non-executive directors and auditors (14A.55-14A.59)

              • 14A.55

                The listed issuer's independent non-executive directors must review the continuing connected transactions every year and confirm in the annual report whether the transactions have been entered into:

                (1) in the ordinary and usual course of business of the listed issuer's group;
                (2) on normal commercial terms or better; and
                (3) according to the agreement governing them on terms that are fair and reasonable and in the interests of the listed issuer's shareholders as a whole.

              • 14A.56

                The listed issuer must engage its auditors to report on the continuing connected transaction every year. The auditors must provide a letter to the listed issuer's board of directors confirming whether anything has come to their attention that causes them to believe that the continuing connected transactions:

                (1) have not been approved by the listed issuer's board of directors;
                (2) were not, in all material respects, in accordance with the pricing policies of the listed issuer's group if the transactions involve the provision of goods or services by the listed issuer's group;
                (3) were not entered into, in all material respects, in accordance with the relevant agreement governing the transactions; and
                (4) have exceeded the cap.

              • 14A.57

                The listed issuer must provide a copy of the auditors' letter to the Exchange at least 10 business days before the bulk printing of its annual report.

              • 14A.58

                The listed issuer must allow, and ensure that the counterparties to the continuing connected transactions allow, the auditors sufficient access to their records for the purpose of reporting on the transactions.

              • 14A.59

                The listed issuer must promptly notify the Exchange and publish an announcement if the independent non-executive directors and/or the auditors cannot confirm the matters as required. The Exchange may require the listed issuer to re-comply with the announcement and shareholders' approval requirements and may impose additional conditions.

            • When a continuing transaction subsequently becomes connected (14A.60)

              • 14A.60

                If the listed issuer's group has entered into an agreement for a fixed period with fixed terms for:

                (1) a continuing transaction, and the transaction subsequently becomes a continuing connected transaction, or

                Note: This includes a continuing transaction between the listed issuer's group and a connected person exempt under the "insignificant subsidiary exemption" (see rule 14A.09), and the connected person subsequently cannot meet the conditions for the exemption.
                (2) a continuing connected transaction exempt under the "passive investor exemption" (see rules 14A.99 and 14A.100), and the transaction subsequently cannot meet the conditions for the exemption,

                the listed issuer must:
                (a) as soon as practicable after becoming aware of this fact, comply with the annual review and disclosure requirements including publishing an announcement and annual reporting if the listed issuer's group continues to conduct the transaction under the agreement; and
                (b) when the agreement is renewed or its terms are varied, comply with all connected transaction requirements.

          • Other requirements relating to connected transactions

            • Options (14A.61)

              • 14A.61

                If the listed issuer's group grants an option to a connected person and the listed issuer's group does not have discretion to exercise the option, the transaction is classified as if the option has been exercised (see rule 14A.79(1)). In addition, the listed issuer must announce the following subsequent events as soon as practicable:

                (1) any exercise or transfer of the option by the option holder; and/or
                (2) (if the option is not, or is not to be, exercised in full), the option holder notifying the listed issuer's group that it will not exercise the option, or the expiry of the option, whichever is earlier.

            • Guaranteed profits or net tangible assets (14A.62-14A.63)

              • 14A.62

                The following apply if the listed issuer's group acquires a company or business from a connected person, and the connected person guarantees the profits or net tangible assets or other matters regarding the financial performance of the company or business.

              • 14A.63

                If the actual performance fails to meet the guarantee, the listed issuer must disclose the following in an announcement and in its next annual report:

                (1) the shortfall and any adjustment in the consideration for the transaction;
                (2) whether the connected person has fulfilled its obligations under the guarantee;
                (3) whether the listed issuer's group has exercised any option to sell the company or business back to the connected person or other rights it held under the terms of the guarantee, and the reasons for its decision; and
                (4) the independent non-executive directors' opinion on:
                (a) whether the connected person has fulfilled its obligations; and
                (b) whether the decision of the listed issuer's group to exercise or not to exercise any options or rights set out in rule 14A.63(3) is fair and reasonable and in the interests of the shareholders as a whole.

            • When a proposed transaction becomes connected (14A.64-14A.65)

              • 14A.64

                If a connected transaction is also a notifiable transaction, the listed issuer must also comply with the requirements in Chapter 14.

              • 14A.65

                If a listed issuer has entered into an agreement for a proposed transaction which is conditional on shareholders' approval in general meeting and the proposed transaction becomes a connected transaction before the shareholders' approval, the listed issuer must comply with the connected transaction requirements. Where a notice of meeting to approve the proposed transaction has been sent to shareholders, the listed issuer must issue a further announcement and a supplementary circular (see rule 14A.48) to disclose that the transaction has become a connected transaction and the parties that are required to abstain from voting. The circular must also contain information required for a connected transaction circular.

            • Checklists (14A.66)

              • 14A.66

                The listed issuer must complete and submit any checklists for connected transactions prescribed by the Exchange from time to time.

          • Content requirements

            • 14A.67

              This section sets out the information that a listed issuer must disclose in its announcements, circulars and annual reports.

          • Announcements

            • 14A.68

              An announcement for a connected transaction must contain at least:

              (1) the information set out in rules 14.58 to 14.60 (contents of announcements for notifiable transactions);
              (2) the connected relationship between the parties to the transaction, and the connected person's interests in the transaction;
              (3) the independent non-executive directors' views on the matters set out in rules 14A.40(1) to (3) if no shareholders' approval is required;
              (4) if the transaction is a continuing connected transaction, the basis for calculating the payments to be made (see rule 14A.51) and the amount of its cap. If a circular is not required, the listed issuer must also disclose how it determines and calculates the cap, including the assumptions and the amounts of previous transactions which form the basis of the cap;
              (5) if the transaction involves the listed issuer's group acquiring assets from a connected person, the original acquisition cost of the assets to the connected person;
              (6) if the transaction involves the listed issuer's group disposing of assets which it has held for 12 months or less, the original acquisition cost of the assets to the listed issuer's group;
              (7) if the announcement contains a profit forecast of the listed issuer's group or a company which is, or will become, the listed issuer's subsidiary, the information set out in rule 14.62 (requirements for profit forecast in notifiable transaction announcement);
              (8) if no circular is required, a statement whether any directors of the listed issuer have a material interest in the transaction and, if so, whether they have abstained from voting on the board resolution;
              (9) a statement that the transaction is subject to shareholders' approval, if applicable;
              (10) if the transaction is, or will be, approved by way of shareholders' written approval, details of the shareholders giving the approval (including their names and shareholdings in the listed issuer) and the relationship between the shareholders; and
              (11) if a circular is required, the expected date of distribution of the circular, and, if this is more than 15 business days after the publication of the announcement, the reasons why this is so.

          • Circulars

            • 14A.69

              A circular for a connected transaction must:

              (1) provide a clear and adequate explanation of its subject matter and demonstrate the advantages and disadvantages of the transaction for the listed issuer's group;
              (2) where practicable, include a numerical evaluation;
              (3) contain all information necessary to allow the listed issuer's shareholders to make a properly informed decision; and
              (4) contain a heading drawing attention to the importance of the document and advising shareholders who are in any doubt to consult appropriate independent advisers on the appropriate course of action.

            • 14A.70

              The circular must contain at least:

              (1) the Exchange's disclaimer statement (see rule 14.88) on its front cover or inside front cover;
              (2) the information required to be disclosed in the announcement for the transaction;
              (3) the identity and activities of the parties to the transaction and of their ultimate beneficial owner(s);
              (4) the name of the connected person concerned, his or its relationship with any controller and the name and office held by that controller;
              (5) if the transaction is a continuing connected transaction, how the listed issuer determines and calculates the cap, including the assumptions and the amounts of previous transactions which form the basis of the cap;
              (6) a letter from each of the independent financial adviser and, if applicable, the independent board committee containing its opinion and recommendation on the transaction (see rules 14A.43 and 14A.45);
              (7) if the transaction involves the acquisition or disposal of any property interests or a company whose assets consist solely or mainly of property, a valuation and information on the property if required under rule 5.03;
              (8) if the primary significance of the asset (other than property interests) being acquired or disposed of is its capital value, an independent valuation of the asset;
              (9) if the transaction involves an acquisition or disposal of a company or business engaging in an infrastructure project, a business valuation report on that company or business and/or traffic study report on the project. The report(s) must clearly set out:
              (a) all significant underlying assumptions including the discount rate or growth rate used; and
              (b) a sensitivity analysis based on different discount rates and growth rates.
              If the business valuation is based on a profit forecast, the accounting policies and calculations for the underlying forecasts must be examined and reported on by the auditors or reporting accountants. Any financial adviser mentioned in the circular must also report on the underlying forecasts.
              (10) if the transaction involves the listed issuer's group acquiring a company or business from a connected person, details of:
              (a) any guarantee of the profits or net tangible assets or other matters regarding the financial performance of the company or business provided by the connected person, and a statement by the listed issuer that it will comply with the disclosure requirements (see rule 14A.63) if the actual performance fails to meet the guarantee; and
              (b) any option granted to the listed issuer's group to sell the company or business back to the connected person and/or other rights given to the listed issuer's group;
              (11) a statement whether any directors of the listed issuer have a material interest in the transaction and, if so, whether they have abstained from voting on the board resolution;
              (12) a statement that any shareholder with a material interest in the transaction will not vote and the information required in rule 2.17;
              (13) the information set out in the following paragraphs of Appendix 1, Part B:

              1 — listed issuer's name
              2 — directors' responsibility
              5 — expert statements
              10 — securities to be issued (if applicable)
              29(2) — requirements if there is a profit forecast
              32 — no material adverse change
              39 — directors' service contracts
              40 — directors' interests in assets
              43(2)(a) & (c) — documents on display
              (14) information regarding directors' and chief executive's interests in the listed issuer described in paragraphs 34 and 38 of Appendix 1, Part B, and Practice Note 5;
              (15) information regarding the competing interests of each of the directors and any proposed director of the listed issuer and his respective close associates as would be required to be disclosed under rule 8.10 as if each of them was a controlling shareholder; and
              (16) any additional information requested by the Exchange.

          • Annual reports

            • 14A.71

              The listed issuer's annual report must contain the following information on the connected transactions conducted in that financial year (including continuing connected transactions under agreements signed in previous years):

              (1) the transaction date;
              (2) the parties to the transaction and a description of their connected relationship;
              (3) a brief description of the transaction and its purpose;
              (4) the total consideration and terms;
              (5) the nature of the connected person's interest in the transaction; and
              (6) for continuing connected transactions,
              (a) a confirmation from the listed issuer's independent non-executive directors on the matters set out in rule 14A.55; and
              (b) a statement from the listed issuer's board of directors whether the auditors have confirmed the matters set out in rule 14A.56.

            • 14A.72

              When the listed issuer discloses in its annual report information of any related party transaction under the accounting standards for preparing its financial statements, it must specify whether the transaction is a connected transaction under this Chapter and whether it has complied with the requirements in this Chapter.

          • Exemptions

            • 14A.73

              Exemptions from the connected transaction requirements are available for the following types of transactions:

              (1) de minimis transactions (rule 14A.76);
              (2) financial assistance (rules 14A.87 to 14A.91);
              (3) issues of new securities by the listed issuer or its subsidiary (rule 14A.92);
              (4) dealings in securities on stock exchanges (rule 14A.93);
              (5) repurchases of securities by the listed issuer or its subsidiary (rule 14A.94);
              (6) directors' service contracts and insurance (rules 14A.95 and 14A.96);
              (7) buying or selling of consumer goods or services (rule 14A.97);
              (8) sharing of administrative services (rule 14A.98);
              (9) transactions with associates of passive investors (rules 14A.99 and 14A.100); and
              (10) transactions with connected persons at the subsidiary level (rule 14A.101).

            • 14A.74

              The exemptions are broadly divided into two categories: (1) fully exempt from shareholders' approval, annual review and all disclosure requirements; and (2) exempt from shareholders' approval requirement.

            • 14A.75

              The Exchange has the power to specify that an exemption will not apply to a particular transaction.

          • De minimis transactions

            • 14A.76

              This exemption applies to a connected transaction (other than an issue of new securities by the listed issuer) conducted on normal commercial terms or better as follows:

              (1) The transaction is fully exempt if all the percentage ratios (other than the profits ratio) are:
              (a) less than 0.1%;
              (b) less than 1% and the transaction is a connected transaction only because it involves connected person(s) at the subsidiary level; or
              (c) less than 5% and the total consideration (or in the case of any financial assistance, the total value of the financial assistance plus any monetary advantage to the connected person or commonly held entity) is less than HK$3,000,000.
              (2) The transaction is exempt from the circular (including independent financial advice) and shareholders' approval requirements if all the percentage ratios (other than the profits ratio) are:
              (a) less than 5%; or
              (b) less than 25% and the total consideration (or in the case of any financial assistance, the total value of the financial assistance plus any monetary advantage to the connected person or commonly held entity) is less than HK$10,000,000.

            • Percentage ratio calculations (14A.77-14A.79)

              • 14A.77

                The methods of percentage ratio calculations set out in Chapter 14 (notifiable transactions) also apply to connected transactions in this Chapter subject to the modifications described in rules 14A.78 to 14A.79.

              • 14A.78

                For continuing connected transactions, the listed issuer must calculate the assets ratio, revenue ratio and consideration ratio using the cap as the numerator. If the agreement for the transaction covers over one year, the transaction will be classified based on the largest cap during the term of the agreement.

              • 14A.79

                The following applies when calculating percentage ratios for connected transactions involving options:

                (1) if the listed issuer's group grants an option to a connected person and the listed issuer's group does not have discretion to exercise the option, it is classified as if the option has been exercised. The percentage ratios are calculated based on the consideration for the transaction (which includes the premium and the exercise price of the option), the value of the underlying assets, and the revenue attributable to the assets (See rule 14A.61 for the disclosure requirement when the option holder exercises or transfers the option, or when the option expires);
                (2) if the listed issuer's group acquires or accepts an option granted by a connected person where the listed issuer's group has discretion to exercise the option, it is classified based on the amount of the premium payable by the listed issuer's group. However, if the premium represents 10% or more of the sum of the premium and the exercise price, the transaction will be classified as if the option has been exercised (see rule 14A.79(1));
                (3) if the listed issuer's group exercises an option granted by a connected person, it is classified based on the exercise price, the value of the underlying assets, and the revenue attributable to the assets. If the option is exercised in stages, the Exchange may require aggregation of the transactions;
                (4) if the listed issuer's group transfers an option granted by a connected person to a third party, terminates the option or decides not to exercise the option:
                (a) the listed issuer must classify the transaction as if the option has been exercised. The percentage ratios are calculated based on the exercise price, the value of the underlying assets, and the revenue attributable to the assets, and (if applicable) the consideration for transferring the option, or the amount receivable or payable by the listed issuer's group for terminating the option; or
                (b) the Exchange may allow the listed issuer to disregard the percentage ratios calculated under paragraph (a) above and to classify the transaction using the asset and consideration ratios calculated based on the higher of:
                (i) (for a put option held by the listed issuer's group) the exercise price over the value of the assets subject to the option, or (for a call option held by the listed issuer's group) the value of the assets subject to the option over the exercise price; and
                (ii) the consideration or amount payable or receivable by the listed issuer's group.
                These alternative tests would be allowed only if the assets' valuation is provided by an independent expert using generally acceptable methodologies, and the listed issuer's independent non-executive directors and an independent financial adviser have confirmed that the transfer, termination or non-exercise of the option is fair and reasonable and in the interests of the listed issuer and its shareholders as a whole. The listed issuer must announce the transfer, termination or non-exercise of the option with the views of the independent non-executive directors and the independent financial adviser; and
                (5) if the actual monetary value of the premium, the exercise price, the value of the underlying assets and the revenue attributable to the assets have not been determined when the listed issuer's group grants or acquires or accepts the option:
                (a) the listed issuer must demonstrate to the Exchange's satisfaction the highest possible monetary value for calculating the percentage ratios and classifying the transaction. If the listed issuer is unable to do so, it may be required to comply with all the connected transaction requirements for the transaction; and
                (b) the listed issuer must inform the Exchange when the actual monetary value has been determined. If the transaction falls under a higher classification based on the actual monetary value, the listed issuer must as soon as reasonably practicable announce this fact and comply with the requirements applicable to the higher classification.
                Note: The requirements in this rule are the same as the requirements applicable to options under Chapter 14 (notifiable transactions), except that
                1. Under Chapter 14, the listed issuer may, at the time of the listed issuer's group acquiring or accepting an option granted by a third party, seek shareholders' approval for its exercise of the option in the future. This is not allowed under this Chapter.
                2. Under Chapter 14, transfer or termination of an option by the listed issuer's group is a transaction which is classified based on the consideration for transferring the option or the amount receivable or payable by the listed issuer's group for terminating the option. Under this Chapter, the transfer or termination is classified as if the option is exercised or based on the alternative tests set out in rule 14A.79(4)(b).
                3. Under Chapter 14, non-exercise of an option is not a transaction. Under this Chapter, the non-exercise is classified as if the option is exercised or based on the alternative tests set out in rule 14A.79(4)(b).

            • Exception to percentage ratio calculations (14A.80)

              • 14A.80

                If any percentage ratio produces an anomalous result or is inappropriate to the activity of the listed issuer, the Exchange may disregard the ratio and consider alternative test(s) provided by the listed issuer. The listed issuer must seek prior consent of the Exchange if it wishes to apply this rule.

            • Aggregation of transactions (14A.81-14A.86)

              • 14A.81

                The Exchange will aggregate a series of connected transactions and treat them as if they were one transaction if they were all entered into or completed within a 12-month period or are otherwise related. The listed issuer must comply with the applicable connected transaction requirements based on the classification of the connected transactions when aggregated. The aggregation period will cover 24 months if the connected transactions are a series of acquisitions of assets being aggregated which may constitute a reverse takeover.

              • 14A.82

                Factors that the Exchange will consider for aggregation of a series of connected transactions include whether:

                (1) they are entered into by the listed issuer's group with the same party, or parties who are connected with one another;
                (2) they involve the acquisition or disposal of parts of one asset, or securities or interests in a company or group of companies; or
                (3) they together lead to substantial involvement by the listed issuer's group in a new business activity.

              • 14A.83

                The Exchange may aggregate all continuing connected transactions with a connected person.

              • 14A.84

                A listed issuer must consult the Exchange before the listed issuer's group enters into any connected transaction if:

                (1) the transaction and any other connected transactions entered into or completed by the listed issuer's group in the last 12 months fall under any of the circumstances described in rule 14A.82; or
                (2) the transaction and any other transactions entered into by the listed issuer's group involve the acquisition of assets from a person or group of persons or any of their associates within 24 months after the person(s) gain control (as defined in the Takeovers Code) of the listed issuer.

              • 14A.85

                The listed issuer must provide information to the Exchange on whether it should aggregate the transactions.

              • 14A.86

                The Exchange may aggregate a listed issuer's connected transactions even if the listed issuer has not consulted the Exchange.

          • Financial assistance

            • Financial assistance provided by the listed issuer's group (14A.87-14A.89)

              • 14A.87

                Fo