• 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 GEM. This stock market is defined as the "Main Board" in the Rules Governing the Listing of Securities on the GEM 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)
        "modified opinion" an opinion in an accountants’ or auditors’ report which is modified (a qualified opinion, an adverse opinion or a disclaimer of opinion on the financial statements)
        "modified report" an accountants’ or auditors’ report: —
        (a) in which the opinion is a modified opinion; and/or
        (b) which contains any of the following without modifying the opinion: —
        (i) an emphasis of matter paragraph; and
        (ii) a material uncertainty related to going concern
        "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; it also includes a GEM transfer applicant applying to transfer the listing of its securities from GEM to the Main Board
        "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.
          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 719C 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 by a new applicant should be submitted to the Listing Division which may reject it or recommend the Listing Committee to approve or reject it. However, the Listing Committee has reserved for itself the power to approve all applications for listing 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 normally issue a notification of approval in principle, and then 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 non-voting 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 will not attend meetings of the Listing Committee at which the Listing Committee is determining a matter in the first instance or on review pursuant to any disciplinary proceedings. 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; or
          (6) any decision pursuant to rule 2A.09(2), (3), (5), (7), (8) or (9).
          (7) [Repealed 1 August 2018]

      • 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 the 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 considers it necessary to cancel the listing of a listed issuer for the protection of investors or the maintenance of an orderly market pursuant to rule 6.01, or in any of the circumstances set out in rule 6.01(2), (3) or (4) or rule 6.01A(1), the listed issuer shall have the right to have that decision referred to the Listing (Review) Committee 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.
          (d) For the avoidance of doubt, any decision to cancel a listing within sub-paragraph (b) above is subject to the procedures set out in this Chapter, notwithstanding that the reasons for the cancellation include or amount to a breach of the Exchange Listing Rules by the listed issuer.
          (6) [Repealed 1 August 2018]

      • Time for application

        • 2B.08

          (1) Subject to (3) below, 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).
          (3) A Review Request made under rule 2B.06 for reviewing a decision of the Listing Division to direct the resumption of trading or, if such decision has been referred to the Listing Committee for review, the Listing Committee's decision on such review, 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(3).

      • 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 will not attend meetings of the Listing Committee at which the Listing Committee is determining a matter in the first instance or attend review hearings of the Listing Committee or the Listing (Review) Committee.
          (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 or a decision to direct the resumption of trading, 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.
          (3) The Listing Division, the Listing Committee or the Listing (Review) Committee (as the case may be) will provide written reasons for its decision to direct the resumption of trading under rule 6.07 or decision to endorse such a 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

          Directors of a listed issuer must satisfy the Exchange that they have the character, experience and integrity and are able to demonstrate a standard of competence commensurate with their position as directors 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.

        • 3.09A

          Directors, in accepting to be directors of a listed issuer, shall be considered as having:

          (1) irrevocably appointed the listed issuer as their agent, for so long as they remain directors of the issuer, for receiving on their behalf any correspondence from and/or service of notices and other documents by the Exchange; and
          (2) authorised the Executive Director – Listing, or any person authorised by the Executive Director – Listing, to disclose any of their personal particulars given by them to members of the Listing Committee and, with the approval of the Chairman or a Deputy Chairman of the Exchange, to such other persons, as the Executive Director – Listing may from time to time think fit.

        • 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 or was a director, partner or principal of a professional adviser which currently provides or has within two years immediately prior to the date of his proposed appointment provided services, or is or was 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 two years immediately prior to the date of the proposed appointment, or any of their close associates;
          (4) currently, or within one year immediately prior to the date of the person's proposed appointment, has or had a material interest in any principal business activity of or is or was 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.

          Independent non-executive directors shall submit to the Exchange a written confirmation which must state:

          (a) their independence as regards each of the factors referred to in rule 3.13(1) to (8);
          (b) their 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 their independence at the same time as the submission of the 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.

          Notes: 1. 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.
            2. When determining the independence of a director under rule 3.13, the same factors should also apply to the director's immediate family members. “Immediate family member” is defined under rule 14A.12(1)(a).

        • 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

          Directors of a listed issuer shall inform the Exchange (in the manner prescribed by the Exchange from time to time):

          (1) as soon as reasonably practicable after their appointment,  their  telephone number, mobile phone number, facsimile number (if available), email address (if available), residential address and contact address (if different from the residential address) for correspondence from and service of notices and other documents by the Exchange;
          (2) for so long as they remain as directors of the issuer, any change to the contact information as described in sub-rule (1) as soon as reasonably practicable and in any event within 28 days of such change; and
          (3) for a period of 3 years from the date on which they cease to be directors of the issuer, any change to the contact information as described in sub-rule (1) as soon as reasonably practicable and in any event within 28 days of such change.

          Any correspondence from and/or service of notices and other documents by the Exchange to the directors when they are directors of the listed issuer or after they cease to be so, for whatever purposes (including but not limited to the service of notice of disciplinary proceedings) shall be deemed to have been validly and adequately served on them when the document or notice is served personally or is sent by post, facsimile or email to the address or number they provide to the Exchange.  It is the responsibility of directors and former directors to keep the Exchange informed of their up-to-date contact details.  If directors or former directors fail to provide the Exchange with their up-to-date contact details or arrange for notices, documents or correspondence to be forwarded to them, they may not be alerted to any proceedings commenced against them by the Exchange.
           

        • 3.20A [Repealed]

          [Repealed 1 March 2019]

      • 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.

          Notes:

          (1) 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; and
          (2) If a new applicant which is allowed a shorter trading record period under rule 8.05A or 8.05B acquires any material subsidiary or business during its trading record period, it must disclose pre-acquisition financial information of that material subsidiary or business for the period from the three financial years immediately preceding the issue of the listing document (or if such material subsidiary or business commenced its business less than three financial years ago, then from the commencement date of its business) to the date of the acquisition.

      • 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 Hong Kong Standard on Investment Circular Reporting Engagements 200 – Accountants’ Reports on Historical Financial Information in Investment Circulars (HKSIR 200) 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.

      • Modified Reports

        • 4.18

          Where the reporting accountants issue a modified  report, they must refer to all material matters about which they have reservations. All reasons for the modification must be given and its effect quantified if this is both relevant and practical. A modified report issued by the reporting accountants in respect of a new applicant may not be acceptable where the 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 include a modified opinion, 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) [Repealed 1 August 2018]
        (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.

      • 6.01A

        (1) Without prejudice to its power under rule 6.01, the Exchange may cancel the listing of any securities that have been suspended from trading for a continuous period of 18 months.
        (2) The following transitional provisions apply to listed issuers whose securities have been suspended from trading immediately before the effective date of rule 6.01A(1) (the "Effective Date"):
        (a) For a suspended listed issuer which has been placed in a delisting stage under Practice Note 17 before the Effective Date, Practice Note 17 continues to apply.
        (b) For other issuers which are not subject to a decision to commence the procedures to cancel a listing and a notice period for delisting immediately before the Effective Date, if trading in an issuer's securities has been continuously suspended:
        (i) for less than 12 months as at the Effective Date, the 18 month period referred to in rule 6.01A(1) commences immediately from the Effective Date; or
        (ii) for 12 months or more as at the Effective Date, the 18 month period referred to in rule 6.01A(1) commences 6 months before the Effective Date.
        (c) For issuers which are subject to a decision to commence the procedures to cancel a listing and a notice period for delisting immediately before the Effective Date, such decision and notice period continue to have effect on the relevant issuer. This is notwithstanding that the actual cancellation of listing has not taken place as at the Effective Date.

      • 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.

          Note: The Exchange may set out the issuer's submission for continued suspension in the Exchange's announcement referred to in (2) above.

        • 6.08

          The Exchange's power under rule 6.07 shall be subject to the review process set out in rule 2B.06. An 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.
          (3) See Practice Note 11.

        • 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 any circumstances set out in rule 6.01 arise, it may:

          (1) publish an announcement naming the issuer and specifying the period within which the issuer must have remedied those matters which have given rise to such circumstances. 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. The Exchange may treat any proposals to remedy those matters as if they were an application for listing from a new applicant for all purposes, in which case, the issuer must comply with the requirements for new listing applications as set out in the Listing Rules; or
          (2) cancel the listing of the issuers' securities following the Exchange's publication of an announcement notifying the cancellation of the listing.

        • 6.10A

          For the purpose of rule 6.01A(1), the Exchange may cancel the listing of an issuer's securities following the Exchange's publication of an announcement notifying the cancellation of the listing.

      • 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.