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  • Frequently Asked Questions

    The following frequently asked questions (FAQs) are designed to help issuers understand and comply with the Listing Rules, particularly in situations not explicitly set out in the Rules or where further clarification may be desirable.

    Users of the FAQs should refer to the Rules themselves and, if necessary, seek qualified professional advice. The FAQs are not substitutes for the Rules. If there is any discrepancy between the FAQs and the Rules, the Rules prevail. 

    In formulating our "answers", we may have assumed certain underlying facts, selectively summarised the Rules or concentrated on one particular aspect of the question. They are not definitive and do not apply to all cases where the scenario may at first appear similar. In any given case, regard must be had to all the relevant facts and circumstances.

    The Listing Division may be consulted on a confidential basis. Contact the Listing Division at the earliest opportunity with any queries.

    For searches by rules or topics, please download the consolidated version of FAQs here.

    Please visit Archive to view marked-up versions and versions that have been superseded or withdrawn.

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          • Chapter 1

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            Question:

            Do "close associate" and "associate" include a trustee where the beneficiary of the trust is a company controlled by a director, chief executive or substantial shareholder or any of his family interests/ immediate family members?

            Answer:

            Yes. For the purpose of the definitions of "close associate" and "associate", the interest of a director, chief executive or substantial shareholder, or any of his family interests/ immediate family members includes all beneficial interests directly or indirectly held by any of these parties. This would include the trustee of any trust of which -a company beneficially controlled by a director, chief executive or substantial shareholder, or any of his family interests/ immediate family members is a beneficiary. Similarly, where the substantial shareholder is a corporation, "close associate" and "associate" include the trustee of any trust of which a subsidiary of the substantial shareholder is a beneficiary.

            FAQ Series 1, FAQ No. 1
            LR reference: Main Board Rules 1.01, 14A.12(1)(b), 14A.13(2), 19A.04 / GEM Rules 1.01, 20.10(1)(b), 20.11(2), 25.04
            Released on 30/3/2004 (Updated in February 2020)

            Question:

            What are depositary receipts?

            Answer:

            Depositary receipts (DRs) are securities issued by a depositary representing underlying shares of an issuer which have been placed with the depositary or its nominated custodian. The subject matter of listing is the underlying shares represented by DRs. DRs are purchased by investors (DR holders) in accordance with the terms of the deposit agreement. The depositary is the agent of the issuer and acts as a bridge between the DR holders and the issuer.

            DRs are issued to investors in the target market (the host market) where they are traded, cleared and settled in host market currency in accordance with host market procedures. One DR will represent a number of underlying shares (or a fraction of a single share), according to the DR ratio. The depositary converts dividends into the host market currency and pays the amounts (net of its own fees) to the DR holders. The depositary also transmits other entitlements and corporate communications from the issuer to the DR holder, and transmits the DR holder's instructions back to the issuer. The rights and obligations of the issuer, the depositary and the DR holders are set out in the deposit agreement.

            FAQ Series 6, FAQ No. A1
            LR reference: Main Board Rules 1.01
            Released on 9/5/2008 (Updated on 1/12/2010)

            Question:

            Which jurisdictions are approved for DR issuance?

            Answer:

            Issuers from any jurisdiction which can meet the related requirements of the Listing Rules are welcome to apply to the Exchange.

            FAQ Series 6, FAQ No. B4
            LR reference: Main Board Rules Chapter 1, Chapter 19B
            Released on 09/05/2008 (Last updated on 01/01/2022)

            Question:

            What protections are there for Hong Kong investors in HDRs?

            Answer:

            To be admitted to listing on the Exchange, the HDR issuer will have to demonstrate compliance with all the core shareholder protection standards that apply to issuers of shares, as set out in Appendix 3 of the Listing Rules, Guidance Letter HKEX-GL111-22 (Updated in January 2022), the Securities and Futures Ordinance, the prospectus provisions of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32), and the Codes on Takeovers and Mergers and Share Buybacks. (Updated in April 2014)

            The HDR holder’s rights are set out in the deposit agreement, which is subject to approval by the Exchange in accordance with the provisions of Chapter 19B. Investors in HDRs should understand that they are bound by the terms of the deposit agreement. Investors are advised to read the deposit agreement to understand what their rights are and how they may be exercised.

            FAQ Series 6, FAQ No. C5
            LR reference: Main Board Rules Chapter 1, Chapter 19B
            Released on 09/05/2008 (Last updated on 01/01/2022)

            Question:

            Can HDR holders vote at the shareholders meeting?

            Answer:

            As with other corporate communications, the depositary, on behalf of the issuer, will pass information from the issuer on resolutions and voting procedures through to the DR holder, and will in turn pass the DR holder’s voting instructions back to the issuer. Besides, DR holders can also access shareholders meeting announcements and other corporate communication by issuers on the HKEX website.

            The right of HKSCC to appoint proxies or corporate representatives to attend the issuer’s general meetings and creditors meetings and those proxies or corporate representatives must enjoy rights equivalent to the rights of other shareholders, including the right to speak and vote is set out in paragraph 19 of the Appendix 3 of the Listing Rules. The HDR issuer must ensure its constitutional documents provides such right.

            FAQ Series 6, FAQ No. C7
            LR reference: Main Board Rules Chapter 1, Chapter 19B
            Released on 09/05/2008 (Last updated on 01/01/2022)

            Question:

            What transaction fees do investors pay to buy or sell HDRs?

            Answer:

            As with buying and selling stocks, investors need to pay brokerage commission, SFC transaction levy, FRC transaction levy, trading fee and stamp duty.

            FAQ Series 6, FAQ No. E3
            LR reference: Main Board Rules Chapter 1, Chapter 19B
            Released on 09/05/2008 (Updated on 01/01/2022)

            Question:

            Where written shareholder approval has been obtained for a transaction, the amended rule requires an information circular to be despatched within 15 business days after publication of the announcement.

            If the stock market is open for only half day due to a typhoon or other reason, is it counted as a business day?

            Answer:

            The Listing Rules define a "business day" as any day on which the Exchange is open for the business of securities dealing. Accordingly if, for whatever reason, the Exchange is open for the business of dealing in securities for only half day, it is counted as a business day.

            FAQ Series 11, FAQ No. 11
            LR reference: Main Board Rules 1.01, 14.41, 14A.46, 14A.48 / GEM Rules 1.01, 19.41, 20.44, 20.46
            Released on 20/5/2010 (Updated on 1/7/2014)

            Question:

            Does "chief executive" in these Rules mean "chief executive officer"? Or does it also refer to chief financial officer, chief operations officer, etc.?

            Answer:

            The definition of chief executive is set out in the Rules: "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".

            FAQ Series 17, FAQ No. 8
            LR reference: Main Board Rules 1.01 / GEM Rules 1.01
            Released on 19/12/2011

            Question:

            Listco has appointed Trustee A the trustee of its employee share scheme established for a wide scope of participants including Listco's directors and certain employees who are not connected persons. Since the interests of Listco's directors in the scheme are together less than 30%, Trustee A is not an "associate" of the directors under Rule 14A.12(1)(b) and therefore not a connected person of Listco.

            (a)    Is Trustee A a "close associate" of the directors under Rule 1.01?
            (b)    Will the shares held by Company A on behalf of the beneficiaries of the scheme be regarded as being "in public hands"?
            (c)    Trustee A, acting as the trustee of the scheme, holds more than 10% of Listco's total issued shares. Under the scheme, it is not allowed to exercise the voting rights attaching to shares. Is Trustee A a substantial shareholder of Listco?

            Answer:

            (a)    Yes. The exclusion for the definition of "associate" under Rule 14A.12(1)(b) does not apply to the definition of "close associate" under Rule 1.01.
            (b)    No, because Trustee A is a close associate of Listco's directors and therefore a core connected person for the purpose of Rule 8.24.
            (c)    No. Trustee A does not fall under the definition of "substantial shareholder" under Rule 1.01.

            FAQ Series 28, FAQ No. 4A
            LR reference: Main Board Rules 1.01, 8.24, 14A.12(1)(b) / GEM Rules 1.01, 11.23(11) Notes 2 and 3, 20.10(1)(b)
            Released on 1/7/2014

            Question:

            The revised Hong Kong Standards on Auditing (“HKSAs”) issued by the HKICPA on 31 August 2015 which became effective for audits of financial statements for periods ending on or after 15 December 2016, require the issuer’s auditors to report “Key Audit Matters” (“KAM”) in their audit report. Will the issuer need to:

            (i)    provide details of KAM in the preliminary results announcement; and
            (ii)    select the headline category “Modified Report by Auditors” when submitting the results announcement for publication?

            Answer:

            (i)    Currently, there is no specific requirement under the Rules for an issuer to provide details of KAM in its results announcement.

            For investors to better understand the financial statements and the audit that was performed, it is considered more appropriate that KAM should be read and considered together with the full audit report and the complete set of financial statements. Therefore, the issuer is recommended to publish its full annual report as soon as practicable after the preliminary results announcement has been issued.
            (ii)    No. Given that KAM is part of a clean audit report, the issuer should not select the headline category “Modified Report by Auditors” when submitting the results announcement for publication on the HKEXnews website.

            The issuer is reminded that paragraphs 45(7) and 46(8) of Appendix 16 to the Main Board Rules and GEM Rules 18.50(8) and 18.78(5) require, where its auditors are likely to issue a modified report on its financial statements, the issuer to provide details of the modification in the results announcement and select the headline category “Modified Report by Auditors”. The newly defined term “modified report” in Main Board Rule 1.01/ GEM Rule 1.01 refers to:
              (a) where the audit opinion in the auditors’ report is a “modified opinion” (i.e. a qualified opinion, an adverse opinion or a disclaimer of opinion); and/or
              (b)  where the auditors’ report contains any of the following without modifying the audit opinion:
                - an emphasis of matter paragraph; and
                - a material uncertainty related to going concern.
              There is no policy change to the Rules in this regard.

            FAQ 002-2017
            LR reference: Main Board Rules 1.01, Appendix 16 Paragraphs 45(7) and 46(8), Appendix 24 / GEM Rules 1.01, 18.50(8), 18.64, 18.76, 18.78(5), Appendix 17
            Released on 6/1/2017 (Updated on 1/3/2019)

            Question:

            When the auditors express an unmodified opinion but include an “Emphasis of Matter” paragraph or a separate section under the heading “Material Uncertainty Related to Going Concern”, will the issuer need to provide details in the preliminary results announcement and select the headline category “Modified Report by Auditors” when submitting the results announcement for publication?

            Answer:

            Yes. See the definition of “modified report” in Main Board Rule 1.01/ GEM Rule 1.01 (FAQ 002-2017).

            Where the auditors’ report is expected to include an “Emphasis of Matter” paragraph or a separate section under the heading “Material Uncertainty Related to Going Concern”, the issuer should provide details in its results announcement. In such case, the issuer should also select the headline category “Modified Report by Auditors” when submitting its results announcement for publication on the HKEXnews website.

            FAQ 003-2017
            LR reference: Main Board Rules 1.01, Appendix 16 Paragraphs 45(7) and 46(8), Appendix 24 / GEM Rules 1.01, 18.50(8), 18.64, 18.76, 18.78(5), Appendix 17
            Released on 6/1/2017 (Updated on 1/3/2019)

            Question:

            (i)    Given the Exchange has now updated the audit terminology in the Rules with reference to the revised HKSAs on auditor reporting, the terms “modified opinion” and “modified report” are defined in Main Board Rule 1.01/ GEM Rule 1.01. However, there is no definition of “modification” in the Rules.

            Please clarify the use of the term “modification”.
            (ii)    Where the financial information has been reviewed and a review conclusion has been expressed by the auditors/ reporting accountants (e.g. FAQ 004-2017), what is meant by “modification” referred to in the Rules, interpretation and guidance issued by the Exchange?

            Please clarify the use of the term “modification” in that context.

            Answer:

            (i)    “Modification” is a generic term which should be read in the context of the Rule.

            Audit engagements

            The terms “modified opinion” and “modified report” defined in Main Board Rule 1.01/ GEM Rule 1.01 relate to an accountants’ report or auditors’ report containing an audit opinion.

            Where a Rule explicitly refers to a “modified opinion”, then the term “modification” should be read in the context of that Rule and should refer to a “modified opinion”.

            The same applies when a Rule explicitly refers to a “modified report”, then the term “modification” should be read in the context of that Rule and should refer to a “modified report”.

            For reference, the table below summarises the terminologies used in the current Rules and the HKSAs:
              Terminology used
            Meanings Current Rules HKSAs

            Matters that affect the audit opinion:
             -  qualified opinion
             -  adverse opinion
             -  disclaimer of opinion

            Modified opinion Modified
            opinion

            Matters that affect the audit opinion:
             -  qualified opinion
             -  adverse opinion
             -  disclaimer of opinion

            AND/OR

            Matters that do not affect the audit opinion:
             -  emphasis of matter
             -  material uncertainty related to going concern

            Modified report No specific
            equivalent term

             
            (ii)    Where the financial information has been reviewed and a review conclusion has been expressed by the auditors/ reporting accountants, then the term “modification” in the Rules and FAQs should refer to:

            Review engagements
              (a)    a modified review conclusion (i.e. qualified conclusion, an adverse conclusion or a disclaimer of conclusion); and/or
              (b)    an emphasis of matter paragraph or a paragraph to highlight a material uncertainty related to going concern without modifying the review conclusion.
              (Note: A review is substantially less in scope than an audit conducted in accordance with relevant HKICPA standards (or equivalent standards issued by IAASB and China Ministry of Finance). Currently, the applicable HKICPA standards for a review engagement are Hong Kong Standards on Review Engagements 2400 (Revised) and 2410.)

            FAQ 053-2019
            LR reference: Main Board Rules 1.01, 4.18, 14.68(2)(a)(i), Appendix 1A Paragraph 35, Appendix 1C Paragraph 42(2), Appendix 1E Paragraph 35, Appendix 16 Paragraphs 45(7) and 46(8) / GEM Rules 1.01, 7.22, 18.50(8), 18.64, 18.76, 19.68(2)(a)(i), Appendix 1A Paragraph 35, Appendix 1C Paragraph 42(2)
            Released on 1/3/2019

            Question:

            Which companies are considered “overseas issuers” under the Listing Rules?

            Answer:

            All companies incorporated outside Hong Kong and the People’s Republic of China are “overseas issuers” under the Listing Rules.

            FAQ Series 25, FAQ No. 5
            LR reference: Main Board Rule 1.01/ GEM Rule 1.01
            Released on 01/01/2022

            Question:

            What are the new definitions on the role of intermediaries under the Rule Amendments?

            Answer:

            The following new definitions on the role of intermediaries are added to the Listing Rules: “capital market intermediary” (or “CMI”), “syndicate CMI”, “overall coordinator”, “sponsor-overall coordinator” (for Main Board Rules only) and “syndicate member”.

            FAQ 077-2022, FAQ No. 1
            LR reference: Main Board Rule 1.01/ GEM Rule 1.01
            Released on 22/4/2022

            Question:

            Despite the introduction of new definitions on the role of intermediaries under the Rule Amendments, can intermediaries still be awarded titles such as “global coordinator”, “bookrunner”, “lead manager”, etc. which is currently the market norm, and disclosed accordingly in listing documents?

            Answer:

            Yes, intermediaries may still be awarded titles which are currently used in the market and identified by these titles in the listing documents to be issued in connection with the relevant transactions. The definitions of “capital market intermediary”, “overall coordinator” and “sponsor-overall coordinator” are for the purpose of identifying them based on the specified activities they engage in as stipulated in the New Code Provisions. However, as the definitions under the New Code Provisions relate directly to the specified activities performed, intermediaries should approach with caution being awarded titles that appear to be inconsistent with how their roles are defined under the New Code Provisions.

            FAQ 077-2022, FAQ No. 2
            LR reference: Main Board Rule 1.01/ GEM Rule 1.01
            Released on 22/4/2022

          • Chapter 2

            View Current PDF

            Question:

            Rule 13.36(2) states that an issuer may exclude overseas shareholders from a rights issue/open offer if, having made enquiries regarding the legal restrictions under the laws of the relevant place and the requirements of the relevant regulatory body or stock exchange, the directors of the issuer consider such exclusion to be necessary or expedient. Can Southbound Shareholders be excluded from participation in rights issues/open offers made by Eligible SEHK Issuers and Other Connect Issuers?

            Answer:

            No. Based on the CSRC Announcement [2016] No. 21 "Filing Requirements for Hong Kong Listed Issuers Making Rights Issues to Mainland Shareholders through Mainland-Hong Kong Stock Connect" which sets out the procedure for the filing of rights issue/open offer prospectus documents of Eligible SEHK Issuers and Other Connect Issuers, the Listing Department does not consider that Eligible SEHK Issuers and Other Connect Issuers have grounds to exclude the Southbound Shareholders from participation in the rights issues/open offers.

            Rule 2.03 sets out the general principle expected to be upheld by issuers, and requires that (i) all holders of listed securities should be treated fairly and equally; and (ii) all new issues of equity securities by a listed issuer should first be offered to the existing shareholders by way of rights unless they have agreed otherwise. This rule seeks to secure for holders of securities equality of treatment. Accordingly, on the basis of Rule 13.36, an Eligible SEHK Issuer or Other Connect Issuer failing to make its rights issue/open offer available to the Southbound Shareholders will not be granted an approval for the listing of the rights/open offer shares by the Listing Department under Rule 2A.06.

            FAQ Series 29, FAQ No. 3
            LR reference: Main Board Rules 2.03, 13.36(2)
            Released on 14/11/2014 (Updated on 13/07/2018)

            Question:

            What are the additional considerations for Eligible SEHK Issuers and Other Connect Issuer if the securities to be offered or distributed to shareholders in the above corporate actions are not eligible for trading under Shanghai and Shenzhen Connect?

            Answer:

            The scope of securities eligible for southbound trading under the Shanghai and Shenzhen Connect (Eligible Securities) is set out in http://www.hkex.com.hk/eng/market/sec_tradinfra/chinaconnect/Eligiblestock.htm1.

            Southbound Shareholders may receive different types of securities from SEHK Eligible Issuers and Other Connect Issuers as entitlements under pre-emptive issues or distributions (e.g. warrants or convertible securities of the issuers, or shares of other entities):

            if the entitlement securities are not Eligible Securities but are listed on SEHK, Southbound Shareholders may sell them on SEHK through Shanghai and Shenzhen Connect, but they will not be allowed to buy such securities2; and
            if the entitlement securities are not listed on SEHK, Southbound Shareholders will not be allowed to buy or sell the securities on SEHK. HKSCC and ChinaClear will determine how to deal with the securities subscribed or received by Southbound Shareholders on an individual case basis2.

            Issuers are reminded of their obligation to treat all shareholders fairly and equally when they propose to offer or distribute securities to shareholders. They should consider making the following arrangements3:

            providing all shareholders with an option to receive their entitlements in cash rather than securities; and
            if the entitlement securities are not to be listed, offering a means for the shareholders to dispose of these securities.

            Issuers should also make clear disclosures in their corporate communications about actions their shareholders need to take in respect of the offered/distributed securities.

            Note
            1: The list contains securities eligible for both buy and sell through Shanghai and Shenzhen Connect.
            2: See Article 77 of SSE Stock Connect Pilot Provisions 《上海證券交易所滬港通試點辦法》, Article 76 of SZSE Stock Connect Implementation Rules《深圳證券交易所深港通業務實施辦法》, and Article 24 of ChinaClear Stock Connect Implementation Rules
            3: See the "Guide on distribution of dividends and other entitlements" published on the HKEX website

            FAQ Series 29, FAQ No. 4
            LR reference: Main Board Rules 2.03, 13.36(2)
            Released on 14/11/2014 (Updated on 13/07/2018)

            Question:

            Company A is an issuer of debt/ structured products listed on the Exchange. Company B, an unlisted group company of Company A, guarantees Company A's obligations under the listed debt/structured products.

            Company A is subject to Part 9 of the FIRO, while Company B is not.

            Where Company A's disclosure obligations are deferred under section 150 of the FIRO or suspended under section 153 of the FIRO, will Company B's disclosure obligations remain intact?

            Answer:

            Where Company A's disclosure obligations are deferred under section 150 of the FIRO or suspended under section 153 of the FIRO, the Exchange will exercise the general waiver approved by the SFC under Main Board Rule 2.04 (or GEM Rule 2.07) to waive Company B's disclosure obligations under the Rules arising out of or in connection with the possible resolution which may be triggered, or the resolution triggered under the FIRO.

            FAQ Series N/A, FAQ No. 006-2017
            LR reference: Main Board Rule 2.04 / GEM Rule 2.07
            Released on 20/10/2017

            Question:

            Does HKEx have any plans to abolish the requirement to publish a printed copy of annual report and accounts or other financial reports or circulars?

            Answer:

            The Electronic Disclosure Project is one major step towards a paperless market. We amended the Listing Rules in the following areas:

            electronic communication to shareholders;

            We amended Main Board Rule 2.07A and GEM Rule 16.04A enabling a company to communicate electronically with its shareholders by means of a website if the shareholder concerned has agreed (generally or to the specific corporate communication) (and that agreement has not been revoked) or has been deemed to have done so
            reduction in the number of hard copies.

            We reduced the number of hard copies of the documents required. For details, please refer to the HKEx's announcement of 1 August 2008 at:

            http://www.hkex.com.hk/eng/newsconsul/hkexnews/2008/080801news.htm

            Furthermore, HKEx will closely work with the Securities & Futures Commission to explore other measures in relation to electronic filing and submission, which is one of the initiatives in the Government's Economic Summit Report. One possibility would be further automation of Disclosure of Interest filings.

            FAQ Series 3, FAQ No. 137
            LR reference: Main Board Rules 2.07A / GEM Rules 16.04A
            Released on 22/3/2007 (Updated on 7/3/2011)

            Question:

            Main Board Rule 2.07A(2A)(d) (GEM Rule 16.04A(2A)(d)) requires the listed issuer to notify intended recipients of corporate communications made available on its website only of the presence of the corporate communication on the website, the address of the website, the place on the website where it may be accessed and how to access the corporate communication. To whom and how should such a notification be sent?

            Answer:

            After a request for consent has been sent for the purposes of the deeming procedure, there will essentially be three classes of shareholders for the purpose of website communication.

            1. Shareholders who reply that they wish to continue to receive a hard copy do not need to be sent a separate notification about website communication as they are to be sent a hard copy.
            2. Shareholders who do not reply within the 28-day waiting period can be deemed to have consented to website communication provided all other relevant requirements have been complied with. However, they must be sent a hard copy of the notification unless they have provided the listed issuer with an electronic address for this purpose. If any shareholders reply within the 28 days opting for website communication but do not provide an email address, they will be in the same position as those who did not reply and will likewise have to be sent a hard copy of the notification.

            In cases where shareholders who reply that they wish to be advised electronically when any new corporate communication is available on the listed issuer's website and who have provided an email address for this purpose, the listed issuer will have to send them the notification by email. (Note that this group is not the same as those who may have signed up separately to receive email s about non-Listing-Rule related material such as promotional offers.)

            FAQ Series 8, FAQ No. 5
            LR reference: Main Board Rules 2.07A(2A)(d) / GEM Rules 16.04A(2A)(d)
            Released on 28/11/2008

            Question:

            How should listed issuers manage the process of obtaining consent from shareholders and keeping track of their status having regard to the 12-month ban on further deeming of consent?

            Answer:

            Good shareholders' database management by the listed issuer is the key to keeping track of the mode of communication applicable to each individual shareholder and any unexpired 28-day waiting period or 12-month ban on further deeming.

            If a listed issuer wishes to seek deemed consent upon a person becoming a shareholder, it will need to manage the fact that the 12-month period will vary from shareholder to shareholder. A listed issuer may wish to seek deemed consent from all relevant shareholders on the same date so that it will be much easier to keep track of the 12-month periods.

            A listed issuer can at any time encourage and invite shareholders to sign up to electronic communications, e.g. as part of its standard shareholder mailings. However, a shareholder cannot be deemed to have consented to any consent request from the listed issuer sent for the purposes of the "deeming procedure" (i.e. the procedure under Main Board Rule 2.07A(2A) (GEM Rule 16.04A(2A)) less than 12 months after a previous request made to him for the purposes of the deeming procedure in respect of the same class of corporate communications.

            FAQ Series 8, FAQ No. 1
            LR reference: Main Board Rules 2.07A(2A) / GEM Rules 16.04A(2A)
            Released on 28/11/2008 (Updated in February 2020)

            Question:

            If a shareholder ceased to be a shareholder but subsequently becomes a shareholder again, can the listed issuer rely on consent previously given by this shareholder?

            Answer:

            No. A consent from a shareholder is only valid if it is given after acquiring the shares. The shareholder will be treated as a new shareholder and the issuer must send hard copies of all corporate communications to him unless and until a new consent from the shareholder is expressly given or deemed.

            FAQ Series 8, FAQ No. 2
            LR reference: Main Board Rules 2.07A(2A) / GEM Rules 16.04A(2A)
            Released on 28/11/2008 (Updated in February 2020)

            Question:

            Can a listed issuer, in its request for consent under the deeming procedure, offer electronic means of communication (such as CD or email) in addition to publication on its website?

            Answer:

            Yes. Although the deeming procedure can only be invoked to deem consent from a shareholder to website communication, the listed issuer is not precluded, when requesting consent under the deeming procedure, from using the opportunity to solicit express consent from the shareholder to other electronic means (such as receiving the corporate communication on a CD or by email). If no response is received at the end of the 28-day waiting period and provided that all the relevant conditions under the deeming procedure have been satisfied, the shareholder will be deemed to have consented to website communication.

            FAQ Series 8, FAQ No. 4
            LR reference: Main Board Rules 2.07A(2A) / GEM Rules 16.04A(2A)
            Released on 28/11/2008

            Question:

            Main Board Rule 2.07B (GEM Rule 16.04B) provides that an issuer that avails itself of that Rule must make adequate arrangements to ascertain in which language its shareholders wish to receive its corporate communications. The Note under Main Board Rule 2.07B (GEM 16.04B) sets out an example of what the Exchange will normally regard as an adequate arrangement.

            However, an issuer that avails itself of the deeming procedure under Main Board Rule 2.07A(2A) (GEM Rule 16.04A(2A)) may not be able to follow this example exactly, in particular paragraph (3) under the Note.

            Can an issuer deviate from the example?

            Answer:

            Yes. The Note is merely a non-exhaustive example of how to comply with the Rule. An issuer that wishes to use the deeming procedure under Main Board Rule 2.07A(2A) (GEM 16.04A(2A)) may modify the example to suit its own circumstances, so long as the arrangement is adequate for the purpose of Main Board Rule 2.07B (GEM 16.04B).

            If an issuer is not sure whether its arrangement is adequate, the issuer should consult the Exchange.

            FAQ Series 8, FAQ No. 6
            LR reference: Main Board Rules 2.07A(2A), 2.07B / GEM Rules 16.04A(2A), 16.04B
            Released on 28/11/2008 (Updated on 13/3/2009)

            Question:

            What are the operational hours of the e-Submission System?

            Answer:

            The operational hours of the e-Submission System on a business day will be between 6.00 a.m. and 11.00 p.m.

            On a non-business day immediately preceding a business day, the e-Submission System will be available between 6.00 p.m. and 8.00 p.m.

            A submission for publication can be made whenever the e-Submission System is operational. However, the Listing Rules prohibit an issuer from submitting announcements and notices for publication (with certain limited exceptions) outside designated publication windows.

            The e-Submission publication windows for announcements are set out in the questions in the "Timing of Publication" section.

            FAQ Series 3, FAQ No. 3
            LR reference: Main Board Rules 2.07C(1)(a)(i) / GEM Rules 16.17(1)(a)
            Released on 22/3/2007 (Updated on 7/3/2011)

            Question:

            I cannot gain access to the Internet in order to publish a document via the e-Submission System. Can I send the document to HKEx by diskette instead?

            Answer:

            In normal circumstances the Listing Rules require an issuer to publish a document using the e-Submission System. Submission to HKEx via diskette (or any other means) will not satisfy an issuer's obligations under the Listing Rules.

            HKEx will only accept e-mail (or any other means as announced by the Exchange from time to time) in contingency circumstances, such as a failure of both the e-Submission System and back-up system. In these circumstances HKEx will contact all Authorised Persons to inform them of what contingency measures to take.

            In all other circumstances, an issuer must make every effort to gain access to the e-Submission System in order to publish a document. An issuer should first ensure that its own systems are not at fault and use alternative Internet connections (such as those of agents registered on the e-Submission System) if necessary. It is important for the HKEx to understand from the issuer why a document cannot be submitted electronically via the e-Submission System. HKEx will consider the reasons to determine if it should invoke contingency measures.

            For details of the contingency measures, you may refer to the Guide on Listed Company Information Dissemination and Related Trading Arrangements in the Event of Interruption to the HKExnews Website Service or the Information Dissemination System published by the Exchange on the HKEx website at:
            http://www.hkex.com.hk/eng/rulesreg/listrules/listadmin/conting_mtl.htm.

            FAQ Series 3, FAQ No. 11
            LR reference: Main Board Rules 2.07C(1)(a)(i) / GEM Rules 16.17(1)(a)
            Released on 22/3/2007 (Updated on 23/12/2011)

            Question:

            Where the day for submission for publication falls on a business day immediately preceding a day which is not a business day, there is a publication window of between 6.00 p.m. and 8.00 p.m. on the day immediately preceding the next following business day. What is the status of documents submitted during that window for publication?

            Answer:

            A document submitted for publication during this window is treated in the same way as if it had been submitted prior to 11.00 p.m. the last preceding business day. Thus:

            it will be published on the HKEx website immediately upon submission through the e-Submission System; and
            if it requires pre-vetting by HKEx, it will need to have been cleared by 7.00 p.m. on the evening of the preceding business day.

            (In the absence of any statutory holidays during the week, "preceding business day" and "next business day" referred to above would be Friday and the following Monday respectively.)

            FAQ Series 3, FAQ No. 64
            LR reference: Main Board Rules 2.07C(1)(a)(i) / GEM Rules 16.17(1)(a)
            Released on 22/3/2007 (Updated on 7/3/2011)

            Question:

            Are there any restrictions regarding the type of information I can submit for publication on the HKEx website?

            Answer:

            Yes. Information should only be submitted for publication on the HKEx website if it is information, communication or other material required to be published under the Exchange Listing Rules or the Takeovers Code, or otherwise as may be permitted by HKEx at its absolute discretion.

            However, if an issuer currently publishes information available via the HKEx website that is not required by the Listing Rules or Takeovers Code then it can continue to do so by following the instructions given in the answer to question 30.

            FAQ Series 3, FAQ No. 122
            LR reference: Main Board Rules 2.07C(1)(a)(i) / GEM Rules 16.17(1)(a)
            Released on 22/3/2007 (Updated on 21/5/2007)

            Question:

            Since the rule provides for the posting on the HKEX website and the issuer's website of the e-application form together with the e-prospectus, can an applicant simply complete the e-application form downloaded from those websites for subscription purposes?

            Answer:

            This is not recommended. Using application forms downloaded from websites for subscription purpose increases the risk of invalid applications as irregularities during downloading and reproduction may occur.

            Generally speaking, issuers tend to accept only public subscriptions that are made on completion of the standard printed applications forms provided by issuers.

            Alternatively, applicants applying under the public offer tranche may subscribe for securities under the ePO services provided by the issuers which normally involve completion of an online application form.

            HKEX-GL81-15, FAQ No. 12
            LR reference: Main Board Rules 2.07C(1)(b)(ii) / GEM Rules 16.17(2)(b)
            Released on 26/11/2010

            Question:

            Will my file be checked for viruses while it is being uploaded onto the e-Submission System?

            Answer:

            Yes. The e-Submission System has in-built virus detection software and will reject a submission if the document being uploaded contains a virus.

            However, you should check that a file is virus free before uploading it to the e-Submission System.

            FAQ Series 3, FAQ No. 16
            LR reference: Main Board Rules 2.07C(2) / GEM Rules 16.18(1)
            Released on 22/3/2007

            Question:

            How to check whether a document is downloadable for display and printing?

            Answer:

            MB Rule 2.07C(2) and GEM Rule 16.18(1) provide that all electronic copies of documents submitted by an issuer through HKEX-EDP to the Exchange for publication must be displayable on and printable from the HKEX website. The issuers must ensure compliance with the Rules in this respect. HKEX also operates a hotline if any member of the public detects any malfunctioning on the HKEX website.

            Enquires can be sent to the Exchange's IPO Vetting Team by post, phone, fax or email.

            HKEX-GL81-15, FAQ No. 24
            LR reference: Main Board Rules 2.07C(2) / GEM Rules 16.18(1)
            Released on 26/11/2010

            Question:

            On what basis should I prioritise headline categories when I have chosen more than one?

            Answer:

            The issuer must make a judgement as to relative importance of the different types of information contained within the document to be published and set the priority of the headline categories accordingly.

            FAQ Series 3, FAQ No. 22
            LR reference: Main Board Rules 2.07C(3), Appendix 24 / GEM Rules 16.18(2), Appendix 17
            Released on 22/3/2007

            Question:

            Does HKEx have any guidelines for selecting headline categories?

            Answer:

            An issuer should make best efforts to choose headlines that it believes apply to the information submitted for publication.

            However, if you have any questions on the selection of headline categories you can contact a case officer in the Listing Division. Please use the link below to find the appropriate Listing Division team that is responsible for your company and also the contact number for that team.

            http://www.hkex.com.hk/eng/listing/listreq_pro/listcontact/advisor.htm

            If you wish to submit information for publication out of office hours and a Listing Division case officer is not available, you should select the headline categories that you think are most appropriate. Following publication of the information on the HKEx website you may alter the headline categories, as necessary, up to 5 calendar days following publication.

            You may refer to the Guide on Pre-vetting Requirements and Selection of Headline Categories for Announcements published by the Exchange on the HKEx website at:
            http://www.hkex.com.hk/eng/rulesreg/listrules/guidref/guide_pre_vetting_req.htm. The Guide contains a list of headline categories usually applicable to various types of announcements issued under specific Listing Rules.

            FAQ Series 3, FAQ No. 26
            LR reference: Main Board Rules 2.07C(3), Appendix 24 / GEM Rules 16.18(2), Appendix 17
            Released on 22/3/2007 (Updated on 7/3/2011)

            Question:

            What are the implications for not including all the relevant headline categories in a submission?

            Answer:

            The Listing Rules require that an issuer select all such headlines as may be appropriate from the list of headlines set out in Appendix 24 of the Main Board Listing Rules/ Appendix 17 of the GEM Listing Rules (which is also displayed in the e-Submission System) (Listing Rule MB 2.07C(3) & GEM 16.18(2)). Consequently a failure to include all the relevant headline categories in a submission would technically constitute a breach of the Listing Rules.

            HKEx will take appropriate action as necessary if we find that headline categories have been omitted from a submission.

            FAQ Series 3, FAQ No. 27
            LR reference: Main Board Rules 2.07C(3), Appendix 24 / GEM Rules 16.18(2), Appendix 17
            Released on 22/3/2007 (Updated on 21/5/2007)

            Question:

            Is it sufficient to select only the headline category that is most relevant to the main topic of an announcement?

            Answer:

            No. When submitting the announcement via the e-Submission System, the issuer must select all applicable headlines pursuant to the Listing Rules. If the announcement is issued pursuant to multiple Listing Rule requirements, all relevant headlines that are related to those Listing Rule requirements must be selected.

            For example, if the issuer submits an announcement in relation to a discloseable transaction, the issuer should select the headline category "Discloseable Transaction". If the transaction constitutes inside information, the issuer should also select the headline category "Inside Information".

            FAQ Series 3, FAQ No. 28
            LR reference: Main Board Rules 2.07C(3), Appendix 24 / GEM Rules 16.18(2), Appendix 17
            Released on 22/3/2007 (Updated on 2/1/2013)

            Question:

            How can an issuer continue to make "non-regulatory" information available to the public that is currently made available on the HKEx website?

            Answer:

            There may be information that an issuer currently publishes on the HKEx website that is not required by the Listing Rules or Takeovers Code. An issuer, for the purposes of transparency and for the benefit of shareholders may wish to continue to make this information publicly available. This information may or may not relate to information that has been al published under the requirements of the Listing Rules or Takeovers Code. Typical examples of such information would include: presentation material in relation to a transaction for market analysts or media and reports issued by special or ad hoc committees of issuers.

            If an issuer wishes to make non-regulatory information available to the public it should ensure that this information is beneficial and is made available for the purposes of transparency and even dissemination of information.

            An issuer should submit this information via the e-Submission System as an announcement using the "Announcements & Notices" Tier 1 Headline. The issuer should choose an appropriate Tier 2 headline for this announcement. The Tier 2 headline should match that chosen for any related regulatory information. However, an issuer should clearly differentiate the nature of the non-regulatory information being published in the Title of the submission. If the non-regulatory information to be published does not relate to any previously published regulatory information, then "Other" under the subheading "Miscellaneous" may be chosen as the Tier 2 Headline for the submission.

            The announcement should not itself include the non-regulatory information but should instead state that the relevant non-regulatory information is available on the issuer's website. The announcement should include a hyperlink to the relevant information on the issuer's website.

            Please note that if an issuer proposes to publish non-regulatory information that contains inside information, this information should be regarded as regulatory information and should be published in the normal manner according to the requirements of the Listing Rules.

            HKEx and/or its subsidiaries are not responsible for the contents or any of the information of any websites linked with HKEx's website. The inclusion of any hyperlink in a document published on the HKEx website does not imply endorsement by HKEx and/or its subsidiaries of the linked sites and HKEx and/or its subsidiaries are not liable for any loss or damage incurred or suffered arising out of, in connection with or as a result of any access to or interaction with any other websites via HKEx's website.

            FAQ Series 3, FAQ No. 30
            LR reference: Main Board Rules 2.07C(3), Appendix 24 / GEM Rules 16.18(2), Appendix 17
            Released on 22/3/2007 (Updated on 2/1/2013)

            Question:

            If I submit a preliminary results announcement for publication, would it be sufficient to select only one headline category, e.g. "Final Results"?

            Answer:

            In addition to "Final Results", all appropriate headline categories must be selected, such as dividend, closure of books, and change in directors. If the auditors have issued a modified report, the headline category "Modified Report by Auditors" must also be selected.

            Issuers should not include in the preliminary results announcements information of a nature that would require pre-clearance under the Listing Rules.

            FAQ Series 3, FAQ No. 77
            LR reference: Main Board Rules 2.07C(3), 13.45(3), Appendix 24 / GEM Rules 16.18, 17.49(3), Appendix 17
            Released on 22/3/2007 (Updated on 1/3/2019)

            Question:

            For disclosure in the Next Day Disclosure Return pursuant to Main Board Rule 13.25A / GEM Rule 17.27A, which headline category should a listed issuer use when submitting a Next Day Disclosure Return to report a buyback of shares by the listed issuer?

            Answer:

            The listed issuer should choose the new Tier 2 headline category "Share Buyback" under the new Tier 1 headline category "Next Day Disclosure Returns". Where a disclosure other than a share buyback is made in the Next Day Disclosure Return, the listed issuer should choose the new Tier 2 headline category "Others" under the new Tier 1 headline category "Next Day Disclosure Returns". A listed issuer reporting in a Next Day Disclosure Return both a share buyback and some other type of change in its issued share capital should choose both "Share Buyback" and "Others".

            FAQ Series 8, FAQ No. 7
            LR reference: Main Board Rules 2.07C(3), 13.25A / GEM Rules 16.18(2), 17.27A
            Released on 28/11/2008

            Question:

            For an announcement published pursuant to Main Board Rule 17.06A / GEM Rule 23.06A regarding the granting of an option under a share option scheme, which headline category should a listed issuer use when submitting the announcement for publication?

            Answer:

            The listed issuer should choose the Tier 2 headline category "Share Option Scheme" under the heading "Securities/Share Capital" under the Tier 1 headline category "Headline Categories for Announcements and Notices".

            FAQ Series 8, FAQ No. 8
            LR reference: Main Board Rules 2.07C(3), 17.06A / GEM Rules 16.18(2), 23.06A
            Released on 28/11/2008

            Question:

            What headline category should be used for announcements in relation to MMO?

            Answer:

            For announcements in relation to MMO, the issuer must select the headline category "Mixed Media Offer" under "New Listing (Listed Issuers/New Applicants)".

            HKEX-GL81-15, FAQ No. 20
            LR reference: Main Board Rules 2.07C(3), Appendix 24 / GEM Rules 16.18(2), Appendix 17
            Released on 26/11/2010

            Question:

            How should an issuer select headline categories when submitting an announcement for publication on the HKExnews website?

            Answer:

            Rule 2.07C(3) requires an issuer to select all appropriate headlines from the list of headlines set out in Appendix 24 of the Listing Rules. As a general principle, an issuer should select all headlines that are applicable to the content of the announcement. If an announcement relates to more than one subject matter or is issued to satisfy different Rule requirements, all headlines relating to the subject matters and the Rule requirements must be selected. An issuer should not select the headline(s) under "Other" unless all other headlines in Appendix 24 are not applicable to its announcement.

            Issuers may also refer to the following Exchange's guidance materials for the selection of headline categories:

            Guide on pre-vetting requirements and selection of headline categories for announcements available at http://www.hkex.com.hk/listing/suppmat/guide_pre_vetting_req.htm which sets out the generally applicable headline categories for various types of announcements issued under specific Listing Rules.
            The Exchange's letter to issuers of 25 July 2007 available at http://www.hkex.com.hk/eng/rulesreg/listrules/listletter/documents/20070725.pdf which sets out the examples of common errors made by issuers in selecting headlines for certain types of announcements and circulars.

            FAQ Series 27, FAQ No. 1
            LR reference: Main Board Rules 2.07C(3), Appendix 24 / GEM Rules 16.18(2), Appendix 17
            Released on 14/3/2014

            Question:

            New headline categories "Other — Business Update", "Other — Trading Update", "Other — Corporate Governance Related Matters", "Other — Litigation", and "Other — Miscellaneous" were introduced in April 2014.

            Please explain which types of announcements may fall under these headlines.

            Answer:

            The new headlines are introduced to give investors more information about the nature of the announcements falling under the headline category "Other". Issuers should select these new "Other" headline categories only if there are no other applicable headlines.

            The following types of announcements may fall under the new headline categories:

            (i) Other — Business Update
             
            Updates on business activities of the issuer group, for example, the signing of a business contract, a letter of intent to acquire/dispose of assets or a business cooperation agreement, public tender for acquisition/disposal, status update on a project, etc.
            (ii) Other — Trading Update
             
            Periodic updates of sales and other key performance indicators, for example, sales turnover, key performance indicators such as same store sales, new orders booked, monthly premium income for insurance companies, interim management accounts, etc.
            (iii) Other — Corporate Governance Related Matters
             
            Report on internal control review, updates of corporate governance matters, for example, change in corporate personnel, etc.
            (iv) Other — Litigation
             
            Status update on litigation, arbitration or other legal proceedings.
            (v) Other — Miscellaneous
             
            Issuers should only choose this headline if no other headlines is applicable.

            FAQ Series 27, FAQ No. 2
            LR reference: Main Board Rules 2.07C(3), Appendix 24 / GEM Rules 16.18(2), Appendix 17
            Released on 14/3/2014

            Question:

            Can investors search for announcements published before 1 April 2014 using the new headlines "Other — Business Update", "Other — Trading Update", "Other — Corporate Governance Related Matters" and "Other — Litigation"?

            Answer:

            No. These new headlines only apply to announcements published by issuers after 1 April 2014.

            Investors can use the headline "Other (before 1 April 2014)" to search for similar types of announcements published before 1 April 2014.

            FAQ Series 27, FAQ No. 3
            LR reference: Main Board Rules 2.07C(3), Appendix 24 / GEM Rules 16.18(2), Appendix 17
            Released on 14/3/2014

            Question:

            Why did the Exchange introduce six new headline categories for overseas regulatory announcements? Please give examples for the use of these new headline categories.

            Answer:

            Overseas regulatory announcements contain regulatory information released by an issuer or its subsidiary to other stock exchanges. Since overseas regulatory announcements may be published in one language only (either Chinese or English), the new headlines (in both languages) provide readers with information about the nature of the announcement.

            If an overseas regulatory announcement is to be published in one language only, the issuer should only select these new headline(s) under "Overseas Regulatory Announcement".

            The following are examples of announcements that may be published under these new headline categories.

            (i) Overseas Regulatory Announcement — Corporate Governance Related Matters
             
            Social responsibility report, internal control report and independent directors' review report, etc.
            (ii) Overseas Regulatory Announcement — Business Update
             
            Signing of sales contracts or cooperation agreements, periodic update on group reorganization, financial or capital arrangements with subsidiaries, and surplus cash management report, etc.
            (iii) Overseas Regulatory Announcement — Trading Update
             
            Financial results summary or reports of the issuer or its subsidiaries, Forms 10- K/10-Q filed with the U.S. Securities and Exchange Commission, interim management statements, and periodic updates on sales performance, etc.
            (iv) Overseas Regulatory Announcement — Board/Supervisory Board Resolutions
             
            Resolutions approved by the board of directors or the board of supervisors.
            (v) Overseas Regulatory Announcement — Issue of Securities and Related Matters
             
            Listing documents/notices/allotment results for listing of bonds or foreign listed shares (e.g. A shares of PRC issuers), overseas debt issuance program updates, periodic announcements on interest payments and credit ratings, and conversion/repurchase/cancellation of overseas listed bonds, etc.
            (vi) Overseas Regulatory Announcement — Other
             
            Issuers should only choose this headline for an overseas regulatory announcement if none of the above headlines is applicable.

            FAQ Series 27, FAQ No. 4
            LR reference: Main Board Rules 2.07C(3), Appendix 24 / GEM Rules 16.18(2), Appendix 17
            Released on 14/3/2014

            Question:

            Listco A is dually listed in Hong Kong and on a PRC stock exchange. It proposes to release its quarterly results in the PRC market in order to comply with the PRC listing rules.

            At the time of releasing its quarterly results in the PRC market, Listco A will publish the following two announcements on the HKExnews website:

            (i) an overseas regulatory announcement (in Chinese only) which contains the quarterly results released in the PRC; and
            (ii) a separate announcement (in both English and Chinese languages) about inside information which contains key financial figures extracted from the overseas regulatory announcement in (i).

            Which headline(s) should Listco A select for these two announcements?

            Answer:

            Listco A should select the headline "Overseas Regulatory Announcement — Trading Update" for the announcement (i). For the other announcement (ii), Listco A should select the headline "Quarterly Results" and also the headline "Inside Information".

            FAQ Series 27, FAQ No. 5
            LR reference: Main Board Rules 2.07C(3), Appendix 24 / GEM Rules 16.18(2), Appendix 17
            Released on 14/3/2014

            Question:

            Listco B is dually listed in Hong Kong and the UK. It proposes to release an interim management statement containing financial updates in the UK market.

            Listco B considers that the interim management statement constitutes inside information. Therefore it will publish the statement in both English and Chinese languages on the HKExnews website.

            Which headline(s) should Listco B select for this announcement?

            Answer:

            Listco B should select the headlines "Inside Information" and "Overseas Regulatory Announcement — Trading Update" for its interim management statement.

            FAQ Series 27, FAQ No. 6
            LR reference: Main Board Rules 2.07C(3), Appendix 24 / GEM Rules 16.18(2), Appendix 17
            Released on 14/3/2014

            Question:

            How should an issuer decide on the title of its announcement?

            Answer:

            The title of an announcement should give readers a quick understanding of the relevance and importance of the information disclosed in the announcement. Therefore the announcement title should be precise and meaningful. Issuers should avoid using titles that are too generic and do not describe the content of the announcement. Examples of these generic titles include "announcement", "voluntary announcement" and "other announcement".

            FAQ Series 27, FAQ No. 7
            LR reference: Main Board Rules 2.07C(3) / GEM Rules 16.18(2)
            Released on 14/3/2014

            Question:

            An issuer has a financial year end date of 31 March. When submitting its interim report for the six months ended 30 September 20x7 and annual report for the year ended 31 March 20x8 for publication on the HKEX website, what titles should it use in the designated free-text fields?

            Answer:

            The title of a document should be precise and meaningful to give readers a quick understanding of the relevance and importance of the information disclosed in the document. See No. 7 of FAQ Series 27.

            The title for the issuer’s interim report should be:

            (a) “Interim report for the six months ended 30 September 20x7”; or
            (b) “20x7/x8 interim report”.

            The title for the issuer’s annual report should be:

            (a) “Annual report for the year ended 31 March 20x8”; or
            (b) “20x7/x8 annual report”.

            Issuers with financial year end dates other than 31 December should follow this guidance.

            FAQ Series 27, FAQ No. 8
            LR reference: Main Board Rules 2.07C(3), 13.46, 13.48 / GEM Rules 16.18(2), 18.03, 18.53
            Released on 7/12/2018

            Question:

            What are the publication windows?

            Answer:

            A publication window is a period of the day when documents submitted through the e-Submission System are published immediately on the HKEx website. Subject to certain limited types of announcements that can be published at all times during the operational hours of the e-Submission System, the current publication windows applicable to the Announcements and Notices Tier 1 Headline Category are as follows (these publication windows occur on business days unless otherwise specified):

            On a normal business day:

            6.00 a.m. to 8.30 a.m.
            12.00 noon to 12.30 p.m.
            4.30 p.m. to 11.00 p.m.

            On the eves of Christmas, New Year and Lunar New Year when there is no afternoon session:

            6.00 a.m. to 8.30 a.m.
            12.30 p.m. to 11.00 p.m.

            On a non-business day preceding a business day:

            6.00 p.m. to 8.00 p.m.

            The above times are submission deadlines for publication. A submission will be successful if approved at any time (up to and including the 59th second) prior to the deadline.

            In order to enable HKEx to perform maintenance work on its systems, submissions for publication cannot be made via the e-Submission System at times other than those specified above.

            As stated in the Exposure Conclusions document, we are continuing to explore ways to reduce the categories of announcements which require our pre-vetting. Such a reduction should also help issuers to meet the submission deadline more easily.

            Other documents, such as circulars and annual reports can be submitted during the operational hours of the e-Submission System (see question 3 under the "Access to the e-Submission System" section) and they will be published directly on the HKEx website. For these documents, we would recommend submission during trading hours so as to avoid the peak publication period.

            FAQ Series 3, FAQ No. 155
            LR reference: Main Board Rules 2.07C(4)(a) / GEM Rules 16.18(3)(a)
            Released on 22/3/2007 (Updated on 25/7/2016)

            Question:

            Which categories of announcements and notices can be published during trading hours (including lunchtime)?

            Answer:

            All notices and documents which are not announcements (e.g. Annual Reports, Listing Documents, Circulars, Exchange Traded Fund NAV statements etc) can be published both during and outside of trading hours.

            The following categories of announcements can be published during trading hours as well as outside trading hours:

            trading halt or suspension announcements;
            announcements that relate to clarification of news reports or unusual price/turnover movements (classified as "standard" or "super"); and
            overseas regulatory announcements;
            All types of announcements can be published between 12.00 noon and 12.30 p.m. on a normal business day as well as outside trading hours.

            FAQ Series 3, FAQ No. 157
            LR reference: Main Board Rules 2.07C(4)(a) / GEM Rules 16.18(3)(a)
            Released on 22/3/2007 (Updated on 2/1/2013)

            Question:

            Can any documents other than announcements be published during trading hours?

            Answer:

            Yes. Documents other than announcements (e.g. annual reports, listing documents, circulars and Exchange Traded Fund NAV statements) can be submitted and published on the HKEx website during trading hours. Only announcements (with certain exceptions as set out in the Listing Rules) submitted for publication on the HKEx website cannot be published during trading hours.

            To avoid peak publication times, which we anticipate to be between 4.30 p.m. to 11 p.m., we would recommend that documents that are not time critical (such as annual reports and circulars) be submitted electronically for publication during trading hours.

            FAQ Series 3, FAQ No. 158
            LR reference: Main Board Rules 2.07C(4)(a) / GEM Rules 16.18(3)(a)
            Released on 22/3/2007 (Updated on 25/7/2016)

            Question:

            Are there special publication periods for the submission of annual reports or circulars for publication on the website?

            Answer:

            No. There are special publication windows only for announcements. Documents such as annual reports and circulars can be submitted for publication at all times during the operational hours of e-Submission System; this includes trading hours.

            HKEx would recommend the submission of documents other than announcements for publication on the website during trading hours rather than the peak evening publication window (i.e. between 4.30 p.m. and 11 p.m.) when announcements would tend to be published.

            FAQ Series 3, FAQ No. 159
            LR reference: Main Board Rules 2.07C(4)(a) / GEM Rules 16.18(3)(a)
            Released on 22/3/2007 (Updated on 25/7/2016)

            Question:

            How does the MMO apply to CIS offerors?

            Answer:

            For CIS offerors who intend to adopt an MMO, the SFC will impose conditions in its letter of authorization similar to those in the Class Exemption Notice for CO offerors who intend to adopt an MMO (with necessary changes).

            HKEX-GL81-15, FAQ No. 25
            LR reference: Main Board Rules 2.07C(4)(a)
            Released on 26/11/2010

            Question:

            What announcement, notice or document types can I submit in a single language?

            Answer:

            An announcement can be submitted in a single language where permitted by the Listing Rules. The types of announcements where single language publication is usually permitted include overseas regulatory announcements and the trading reports and pre-listing reports of structured product issuers. However, overseas regulatory announcements can also be submitted in both English and Chinese.

            FAQ Series 3, FAQ No. 50
            LR reference: Main Board Rules 2.07C(4)(b) / GEM Rules 16.03
            Released on 22/3/2007 (Updated on 21/5/2007)

            Question:

            Can I submit an Overseas Regulatory Announcement in both English and Chinese for publication?

            Answer:

            Yes. An Overseas Regulatory Announcement can be submitted for publication in both English and Chinese and both files should be submitted simultaneously. An Overseas Regulatory Announcement can also be submitted for publication in only one language i.e. either in English or in Chinese.

            FAQ Series 3, FAQ No. 56
            LR reference: Main Board Rules 2.07C(4)(b), 13.10B / GEM Rules 16.03, 17.12
            Released on 22/3/2007

            Question:

            Are listed issuers required to submit both English and Chinese versions of Next Day Disclosure Returns and Monthly Returns?

            Answer:

            Yes.

            FAQ Series 8, FAQ No. 20
            LR reference: Main Board Rules 13.25A, 13.25B; see also: 2.07C(4)(b) / GEM Rules 17.27A, 17.27B; see also: 16.03
            Released on 28/11/2008

            Question:

            Does an issuer need to publish its documents on display in both the English and Chinese language on its own website and the Exchange’s website?

            Answer:

            The language requirements under Main Board Rule 2.07C(4)(b) (GEM Rule 16.03) do not apply to documents on display. Issuers do not need to publish their documents on display online in both English and Chinese languages unless it is otherwise required by the Listing Rules.

            FAQ Series N/A, FAQ No. 075-2021
            LR reference: Main Board Rule 2.07C(4)(b) / GEM Rule 16.03
            Released on 18/6/2021

            Question:

            Can I submit the English and Chinese language files in two separate submissions one after the other?

            Answer:

            The Listing Rules usually require that, for documents where both English and Chinese versions must be published, both language versions be submitted for publication simultaneously. However Annual Reports or Listing Documents can be published in two separate language submissions, one after the other.

            FAQ Series 3, FAQ No. 55
            LR reference: Main Board Rules 2.07C(4)(c), 2.07C(4)(d) / GEM Rules 16.18(1)(b), 16.18(1)(c)
            Released on 22/3/2007

            Question:

            Can I submit a bilingual version of a document (e.g. annual report and accounts) for publication or do I have to separate a bilingual document into a purely English and a purely Chinese language version before submitting them for publication?

            Answer:

            You can submit a bilingual document for publication and you do not need to separate a bilingual document into a purely English and a purely Chinese language version before submitting them for publication.

            However, you should submit a copy of a bilingual document under an English title on one submission and the same copy of the bilingual document under a Chinese title on a separate submission. This is to ensure that visitors to both language versions of the HKEx website can access the bilingual document.

            FAQ Series 3, FAQ No. 57
            LR reference: Main Board Rules 2.07C(4)(c), 2.07C(4)(d) / GEM Rules 16.18(1)(b), 16.18(1)(c)
            Released on 22/3/2007

            Question:

            What operational standards must an issuer adhere to for posting announcements relating to MMO on its own website?

            Answer:

            In addition to the requirements in the Class Exemption Notice requiring how access to the e-prospectus must be provided from the issuer's website (e.g. 9A(3)(f),(g),(h) and 9A(10)), reference is made to No. 36 of the FAQ Series 3 document for electronic disclosure regarding certain guiding principles for layout of the issuer's website.

            HKEX-GL81-15, FAQ No. 22
            LR reference: Main Board Rules 2.07C(6) / GEM Rules 16.19(1)
            Released on 26/11/2010 (Updated in July 2015)

            Question:

            Can an issuer satisfy the requirement to have its own website by using the services of a third party (e.g. an agent?)

            Answer:

            Yes. An issuer can use web hosting and management services of a third party to satisfy the requirement to publish announcements, notices or other documents. The third-party website must be assigned a dedicated location on the Worldwide Web. Also, the issuer remains responsible at all times for the content that it posts on that third party website.

            FAQ Series 3, FAQ No. 34
            LR reference: Main Board Rules 2.07C(6)(a) / GEM Rules 16.19(1)
            Released on 22/3/2007 (Updated on 21/5/2007)

            Question:

            Can an issuer have more than one website?

            Answer:

            An issuer must nominate one website (and only one) which complies with all the requirements of the Listing Rules with regard to "issuer's own website" and the publication of documents on that website.

            An issuer may maintain other websites for other purposes.

            FAQ Series 3, FAQ No. 35
            LR reference: Main Board Rules 2.07C(6)(a) / GEM Rules 16.19(1)
            Released on 22/3/2007 (Updated on 7/3/2011)

            Question:

            What operational standards must an issuer adhere to in order to meet the Listing Rule requirement to post announcements on its own website?

            Answer:

            Listing Rules MB 2.07C(6)(a) and GEM 16.19(1) require issuers to publish an announcement, notice or other document on a website within certain deadlines.

            We do not specify the minimum operational standards that an issuer should apply to a website that publishes information to comply with the above rules. The demands placed upon an issuer's website by visitors will vary greatly depending upon the extent of investor and shareholder interest at any one time.

            Issuers are expected to take all "reasonable steps" to comply with the Listing Rules. What constitutes "reasonable steps" will depend on the circumstances and the extent to which the issuer can control them.

            We do not specify the web publication mechanism(s) by which an issuer may comply with the above rules. There are a wide variety of mechanisms that will allow an issuer to comply with the above rules. These mechanisms are often technically complex. Also, the types of mechanisms that are available change rapidly over time. Consequently, there is a high risk that technologically innovative solutions could be inhibited by any guidance issued by us.

            Instead, we have set out a list of principles that issuers should be mindful of when publishing information on their website to comply with the above rules.

            The underlying rationale behind these principles is to ensure that the information published on the issuer's website is easily and readily available to all in a manner that is independent from HKEx. This is to ensure at all times, there is an alternative source of information apart from the HKEx website.

            List of guiding principles

            Availability: the website on which an issuer publishes information to comply with these rules must be available at all times (except for downtime required for essential maintenance reasons). An issuer should take all reasonable steps to ensure the availability of its website during normal circumstances and in contingency circumstances.
            Ease of access: the information an issuer publishes to comply with these rules must be easily accessible to a visitor to its website. It should be clear to the visitor where the information is located and how he can locate and view the information.
            Security: an issuer should take all reasonable steps to ensure that the information it publishes on a website to comply with these rules is secure to prevent any unauthorized tampering with the information once it has been published.
            Segregation: an issuer should ensure that the information it publishes on a website to comply with these rules is clearly segregated from the information of other issuers. An issuer should also take all reasonable steps to segregate information that has been published to comply with these rules from other non-regulatory corporate information of the issuer.
            Control: an issuer must at all times maintain control of the information it has published to comply with these rules. An issuer must take all reasonable steps to ensure that the information it has published is not in the control of another party.
            Independence from HKEx publication: an issuer must ensure that the information it publishes to comply with these rules is independent from the copy of the same information published on an HKEx website. An issuer should ensure that the availability of the information on its website does not rely upon the availability of the same information on an HKEx website.

            FAQ Series 3, FAQ No. 36
            LR reference: Main Board Rules 2.07C(6)(a) / GEM Rules 16.19(1)
            Released on 22/3/2007 (Updated on 7/3/2011)

            Question:

            Does an issuer's own website need to be in both English and Chinese?

            Answer:

            An issuer should publish on its own website the same information that it has published on the HKEx website. Consequently, if the information published on the HKEx website is in both English and Chinese, both language versions of that information should also be made available on the issuer's own website.

            FAQ Series 3, FAQ No. 37
            LR reference: Main Board Rules 2.07C(6)(a) / GEM Rules 16.19(1)
            Released on 22/3/2007 (Updated on 21/5/2007)

            Question:

            Does the document published on the issuer's own website have to be the same as that submitted to HKEx for publication?

            Answer:

            Yes. The two documents must be identical. This includes the file format and contents of the document.

            FAQ Series 3, FAQ No. 38
            LR reference: Main Board Rules 2.07C(6)(a) / GEM Rules 16.19(1)
            Released on 22/3/2007 (Updated on 21/5/2007)

            Question:

            Does an issuer have to display on its own website the headline categories and titles of the announcement, notice or document as published on the HKEx website?

            Answer:

            No. Publication of the announcement, notice or document on an issuer's website will be sufficient to satisfy the requirements of the Listing Rules.

            FAQ Series 3, FAQ No. 39
            LR reference: Main Board Rules 2.07C(6)(a) / GEM Rules 16.19(1)
            Released on 22/3/2007 (Updated on 21/5/2007)

            Question:

            When does the deadline for posting a document on the issuer's own website start to run?

            Answer:

            The general deadline for publishing a document on the issuer's own website is 1 hour after submission for publication of the document through the e-Submission System. Where, however, a document is submitted after 7.00 p.m., the deadline for publication on the issuer's own website is 8.30 a.m. the following business day (see Listing Rules MB 2.07C(6)(a) and GEM 16.19(1)).

            FAQ Series 3, FAQ No. 42
            LR reference: Main Board Rules 2.07C(6)(a) / GEM Rules 16.19(1)
            Released on 22/3/2007 (Updated on 7/3/2011)

            Question:

            How can an issuer ensure even dissemination of information between both its own website and the HKEx website?

            Answer:

            An issuer should take reasonable steps to ensure that information has been disseminated evenly between its own website and the HKEx website.

            An issuer can gain comfort that it has taken all reasonable steps in this regard by publishing information on its website, only after:

            receiving an acknowledgement from the e-Submission System that its approval of a submission for publication was successful; and
            receiving an e-mail from HKEx confirming that its submission has been published on the HKEx website; and/or
            visually inspecting the HKEx website to check that its submission has been published there.

            An issuer should adopt internal procedures that incorporate such assurances.

            FAQ Series 3, FAQ No. 43
            LR reference: Main Board Rules 2.07C(6)(a) / GEM Rules 16.19(1)
            Released on 22/3/2007 (Updated on 21/5/2007)

            Question:

            What are the implications of HKEx's review and monitoring procedures on listed issuers' compliance with the requirement to publish a document on its own website within an hour of publication on the HKEx website (or, where the document has been submitted to HKEx after 7.00 p.m. by no later than 8.30 a.m. the next business day)?

            Answer:

            HKEx may from time to time review compliance standards for posting times of documents on issuer's own websites. Listed issuers may be asked by HKEx to provide all relevant data in this regard. Issuers should maintain a log showing the date and time of the posting of their documents on their own websites.

            FAQ Series 3, FAQ No. 44
            LR reference: Main Board Rules 2.07C(6)(a) / GEM Rules 16.19(1)
            Released on 22/3/2007 (Updated on 7/3/2011)

            Question:

            Is an issuer permitted to publish a document on its own website when the same document cannot be published on the HKEx website for technical reasons?

            Answer:

            HKEx has back-up systems in place to ensure that there is not a single point of failure for the HKEx website. In the extreme circumstance of double point failure and both the main and back-up HKEx systems fail, HKEx will issue details of the contingency measures that all issuers should take. It is likely that these contingency measures will require that issuers publish documents on their own website to provide an alternative source of this information. HKEx will also publish headlines and titles of announcements and documents on an electronic bulletin board.

            You may refer to the Guide on Listed Company Information Dissemination and Related Trading Arrangements in the Event of Interruption to the HKExnews Website Service or the Information Dissemination System published by the Exchange on the HKEx website at:
            http://www.hkex.com.hk/eng/rulesreg/listrules/listadmin/conting_mtl.htm.

            FAQ Series 3, FAQ No. 45
            LR reference: Main Board Rules 2.07C(6)(a) / GEM Rules 16.19(1)
            Released on 22/3/2007 (Updated on 23/12/2011)

            Question:

            What procedures should an issuer follow if it has launched a new website, or the address of its existing website has changed?

            Answer:

            HKEx maintains a list of the websites of listed companies. This list can be accessed via the hyperlinks below:

            http://www.hkexnews.hk/hyperlink/hyperlist.htm

            http://www.hkgem.com/aboutgem/links/e_hyper1.htm

            If there is any change of the issuer's website information (either a launch of new website or change of website address), the e-Submission Administrator at the issuer should change the "Website" field in its "Company Details" page within ESS accordingly. HKEx will use this information to update its lists of websites of listed companies mentioned above.

            An issuer should ensure, if it changes its website, that all the information it has previously published under Listing Rule obligations continues to remain available for at least 5 years.

            FAQ Series 3, FAQ No. 48
            LR reference: Main Board Rules 2.07C(6)(a) / GEM Rules 16.19(1)
            Released on 22/3/2007 (Updated on 7/3/2011)

            Question:

            When does a new applicant need to publish an OC Announcement (as defined in Rule 1.01 (GEM Rule 1.01)) and what is the content requirement of such announcement?

            Answer:

            The requirement to publish an OC Announcement only applies to a placing involving bookbuilding activities in connection with a New Listing (Refer to Rule 3A.32(1)(a)(i) (GEM Rule 6A.39(1)(a)(i)).

            Publication of an OC Announcement is required:

            (i) on the same date as the new applicant files the listing application (Note) and publishes the Application Proof (or in the case of a listing of interests in a REIT, on the same date as it files an authorisation application with the Commission and publishes the Application Proof) (“Submission of the Application”).

            A new applicant that is allowed to make a confidential filing under the Listing Rules is required to publish an OC Announcement on the same date as it publishes its PHIP instead. For the avoidance of doubt, the OC Announcement shall be published immediately after and on the same date as the publication of the Application Proof (or PHIP, where applicable). Such OC Announcement shall set out the name(s) of all overall coordinator(s) appointed by the new applicant as at the date of the announcement;
            (ii) each time an additional overall coordinator is appointed after the Submission of the Application. In such a case, the OC Announcement shall be published as soon as practicable after the appointment is made and in any event no later than the first business day after the date of the appointment (which appointment shall be no later than the 14th day after the date of Submission of the Application). Each OC Announcement shall disclose the appointment and set out the name(s) of all overall coordinator(s) appointed by the new applicant as at the date of the announcement; and
            (iii) each time the appointment of an overall coordinator is terminated after the Submission of the Application (or after the publication of the first OC Announcement for applicants allowed to make a confidential filing). In such circumstances, the OC Announcement shall be published as soon as practicable after the termination takes place, and is expected to be published no later than the first business day after the date of the termination of the appointment. Each such OC Announcement shall disclose the termination and set out the name(s) of all overall coordinator(s) that remain appointed by the new applicant as at the date of the announcement.

            For the purpose of publication on the Exchange’s website, an OC Announcement must, among other things, be accompanied by appropriate disclaimer and warning statements and not contain any information regarding the proposed offering or other information that would result in it being deemed as (i) a prospectus under section 2(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance as amended from time to time (Cap. 32) (“CWUMPO”); (ii) an advertisement under section 38B(1) of the CWUMPO; or (iii) an invitation to the public in breach of section 103(1) of the SFO, as stipulated under paragraphs 4(d) and 5A of Practice Note 22 (paragraphs 3(d) and 4A of Practice Note 5 of the GEM Rules).

            Also, for the avoidance of doubt, while intermediaries appointed may be awarded titles such as “global coordinator”, “bookrunner”, “lead manager”, etc., if they fall within the definition of “overall coordinators” under the Rule Amendments by virtue of the activities they conduct or are engaged to conduct, each OC Announcement shall clearly identify them as “overall coordinators”, in addition to any other titles of these intermediaries which the new applicant may intend to disclose in the OC Announcement.

            Note: This includes a re-filing of a listing application.

            FAQ 077-2022, FAQ No. 15
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41(2),9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46(2),12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            What should a new applicant do if it failed to publish an OC Announcement at the prescribed timing under the Listing Rules?

            Answer:

            The new applicant shall publish the OC Announcement as soon as practicable and clearly state the following in the announcement:

            (i) when the OC Announcement should have been published under the Listing Rules;
            (ii) the reasons for the delay in publication;
            (iii) and that the Exchange may take action in respect of the new applicant’s listing application on the breach of the relevant Listing Rule.

            FAQ 077-2022, FAQ No. 16
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41(2),9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46(2), 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            Does a new applicant need to publish an OC Announcement on an appointment or termination of an overall coordinator that takes place before the submission of its listing application?

            Answer:

            No, the obligation to publish an OC Announcement arises only when a new applicant submits a listing application. See FAQ No. 15.

            However, the new applicant is required to notify the Exchange in writing, as soon as practicable, of a termination of an overall coordinator that takes place before the submission of the listing application, and provide the information required under Rule 3A.41(1) (GEM Rule 6A.46(1)) to the Exchange.

            Note: A new applicant that is allowed to make a confidential filing under the Listing Rules is not required to publish the first OC Announcement on the same date as it files the listing application and publishes the Application Proof. Instead, such new applicant shall publish its first OC Announcement on the same date as it publishes its PHIP.

            FAQ 077-2022, FAQ No. 17
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41, 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46, 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            Does a listed issuer need to publish an OC Announcement on an appointment or termination of an overall coordinator in relation to the placings other than in connection with a New Listing?

            Answer:

            No, the requirement for publication of an OC Announcement only applies to a new applicant effecting a placing involving bookbuilding activities in connection with a New Listing and does not apply to an offering by a listed issuer under Rule 3A.32(1)(a)(ii) or 3A.32(1)(b) (GEM Rule 6A.39(1)(a)(ii) or 6A.39(1)(b)).

            However, in an offering by a listed issuer under Rule 3A.32(1)(a)(ii) or 3A.32(1)(b) (GEM Rule 6A.39(1)(a)(ii) or 6A.39(1)(b)), it is required to notify the Exchange of the termination of an overall coordinator in writing as soon as practicable under Rule 3A.41(1) (GEM Rule 6A.46(1)).

            FAQ 077-2022, FAQ No. 18
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41, 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46, 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            (i) Where will OC Announcements be posted?
            (ii) Do OC Announcements need to be pre-vetted by the Exchange prior to publication?
            (iii) What are the publication requirements for OC Announcements?

            Answer:

            (i) OC Announcements will be posted on the “New Listings” page of the HKEXnews website.
            (ii) No
            (iii) As in the case of publication of Application Proofs and PHIPs, a new applicant shall submit the OC Announcement through HKEx-ESS for publication on the Exchange’s website, and is not required to publish the OC Announcement on its own website.
            FAQ 077-2022, FAQ No. 19
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41, 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46, 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            A new applicant has submitted a listing application before the Effective Date, which remains valid as at the Effective Date. If the new applicant appoints or terminates the engagement of an overall coordinator after the Effective Date, does it need to publish an OC Announcement?

            Answer:

            In the scenario described, the new applicant will not be required to publish an OC Announcement on the appointment or termination of the engagement of an overall coordinator that takes place after the Effective Date, as the Rule Amendments are not applicable to listing applications submitted prior to the Effective Date. For example, if a new applicant submits a listing application 1 week before the Effective Date, it will not be required to publish an OC Announcement in respect of the appointment of an overall coordinator during the 2-week period following the submission date of the listing application (even if such appointment takes place in the first week following the Effective Date).

            In the event the new applicant re-files a listing application on or after the Effective Date, it will need to comply with the applicable Rule Amendments, including those in relation to the publication of OC Announcements.

            FAQ 077-2022, FAQ No. 22
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41(2), 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46(2), 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            The Listing Rules require an issuer to ensure that published documents remain available on its website for 5 years. Does this mean an issuer has to upload to its website all the documents that the issuer published within the 5 years previous to the implementation of this new rule?

            Answer:

            No. An issuer need only upload documents to its website that have been published after the implementation of the amended Listing Rules on 25 June 2007.

            Any document which has been uploaded to its website pursuant to a pre-existing Listing Rule (e.g. Listing Rules MB 2.07A(4); GEM 16.04A(4)) must remain on its website for the remainder of the period prescribed under that Rule.

            FAQ Series 3, FAQ No. 40
            LR reference: Main Board Rules 2.07C(6)(b) / GEM Rules 16.19(2)
            Released on 22/3/2007 (Updated on 21/5/2007)

            Question:

            If an issuer fails to ensure that published documents remain available on its website for 5 years, does this constitute a breach of the Listing Rules?

            Answer:

            Yes and the breach should be rectified without delay. The Listing Rules state (MB 2.07C(6)(b) & GEM 16.19(2)) that an issuer must ensure that any document published on its website pursuant to these rules remains available on a continuous basis for at least 5 years.

            FAQ Series 3, FAQ No. 41
            LR reference: Main Board Rules 2.07C(6)(b) / GEM Rules 16.19(2)
            Released on 22/3/2007 (Updated on 21/5/2007)

            Question:

            A listed issuer proposes to acquire a target company, which constitutes a notifiable transaction. The listed issuer has prepared a valuation of the target company using the discounted cashflow method, which is regarded as a profit forecast under Main Board Rule 14.61/ GEM Rule 19.61.

            Is the listed issuer required to disclose such valuation in its announcement and circular for the notifiable transaction and comply with Main Board Rule 14.62/ GEM Rule 19.62 and paragraph 29(2) of Appendix 1B to the Main Board Rules/ GEM Rules?

            Answer:

            Under the Listing Rules, there is no specific requirement for the listed issuer to disclose the profit forecast for the target company to be acquired. However, the listed issuer must observe the general disclosure principle under Main Board Rule 2.13/ GEM Rule 17.56. For example, where the valuation of the target company was a primary factor in forming the basis for the consideration or other material terms of the transaction, disclosure of the valuation would need to be made in the relevant announcement and circular.

            Where a notifiable transaction announcement / circular contains a profit forecast in respect of the listed issuer or a company which is/ is proposed to become, one of its subsidiaries, the listed issuer is required to comply with Main Board Rule 14.62 / GEM Rule 19.62 and paragraph 29(2) of Appendix 1B to the Main Board Rules/ GEM Rules (as the case may be).

            FAQ Series 7, FAQ No. 21
            LR reference: Main Board Rules 14.62, 14.66(2), 2.13, Appendix 1B Paragraph 29(2) / GEM Rules 19.62, 19.66(3), 17.56, Appendix 1B Paragraph 29(2)
            Released on 28/11/2008 (Updated on 30/9/2009)

            Question:

            A listed issuer proposes to acquire a revenue generating asset, which constitutes a notifiable transaction. There is a valuation of such asset prepared using the discounted cashflow method, which is regarded as a profit forecast under Main Board Rule 14.61/ GEM Rule 19.61.

            Will the listed issuer be required to comply with the formal reporting requirements under Main Board Rule 14.62/ GEM Rule 19.62 if it discloses the valuation of the revenue generating asset in its announcement issued under the notifiable transaction rules?

            Answer:

            Under Main Board Rule 14.62 / GEM Rule 19.62, the formal reporting requirements apply where the announcement contains a profit forecast in respect of the listed issuer or a company which is/ is proposed to become, one of its subsidiaries.

            In this case, while the profit forecast made in respect of the revenue generating asset may not fall within Main Board Rule 14.62 / GEM Rule 19.62, the listed issuer must ensure compliance with Main Board Rule 2.13 / GEM Rule 17.56 when its announcement contains profit forecast of the asset to be acquired, particularly where the assets are material to the listed issuer.

            The listed issuer should also note that where the proposed acquisition constitutes a major transaction or above that requires a circular, it is required to comply with the formal reporting requirements in respect of the profit forecast of the asset contained in the circular pursuant to Paragraph 29(2) of Appendix 1B to the Main Board Rules / GEM Rules.

            FAQ Series 7, FAQ No. 22
            LR reference: Main Board Rules 14.62, 14.66(2), 2.13, Appendix 1B Paragraph 29(2) / GEM Rules 19.62, 19.66(3), 17.56, Appendix 1B Paragraph 29(2)
            Released on 28/11/2008 (Updated on 30/9/2009)

            Question:

            Will the Exchange return a listing application if the listing document does not comply with the Guidance Letter HKEX-GL86-16?

            Answer:

            The Guidance Letter HKEX-GL86-16 contains:

            (a) general guidance on producing clear and concise listing documents (General Guidance);
            (b) consolidated and updated version of a number of the Exchange's guidance letters on disclosure in listing documents, mostly included under the title "Simplification Series" (Consolidated Guidance); and
            (c) online hyperlinks to: (i) sample "Summary of the Constitution of the Company and the Companies Law" sections of listing documents of applicants incorporated in Bermuda, the Cayman Islands and the PRC (Specimen Sections); and (ii) the corresponding sample constitutional documents for the applicants (Sample Constitutional Documents).

            The Exchange will not return a listing application merely because it does not follow the General Guidance, the Specimen Sections or the Sample Constitutional Documents, but will remind applicants to do so.

            Applicants which submit their listing applications after 30 April 2016 should comply with the Consolidated Guidance.

            FAQ 001-2016
            LR reference: Main Board Rules 2.13, 11.07 / GEM Rules 14.08(7), 17.56
            Released on 2/2/2016 (Updated on 13/5/2016)

            Question:

            What are the changes in the Consolidated Guidance compared to the guidance letters on disclosure in listing documents, mostly included under the title "Simplification Series"?

            Answer:

            The changes in the Consolidated Guidance are limited to:

            (a) modifying or deleting certain overly specific content guidance which is only relevant in a limited number of cases. For example, the specific content guidance for product returns and warranty, and industry standards (e.g. International Organization for Standardization (ISO)), which does not apply to all listing applicants, and has been modified and deleted, respectively. This helps to ensure that the guidance remains high level and principles-based;
            (b) removing any repetition after consolidating the various guidance letters on disclosure in listing documents, mostly included under the title "Simplification Series"; and
            (c) updating the guidance based on the Exchange's most recent experience. For example, in respect of listing applicants in the banking and securities sectors, we have updated the content guidance so that the following financial information/ ratios are to be disclosed in the Summary section of a listing document:
             
            in respect of the banking sector, net interest spread, net interest margin, capital adequacy ratio, non-performing loan ratio and loan to deposit ratio; and
            in respect of the securities sector, the amount of securities underwritten, average commission rate, trading volumes, average rate of return, asset under management and balances of margin financing and securities lending.

            For marked-up version of the guidance letters included in the Consolidated Guidance, see:

            http://www.hkex.com.hk/eng/rulesreg/listrules/listsptop/guidepsld/psld_index.htm

            FAQ 002-2016
            LR reference: Main Board Rules 2.13, 11.07 / GEM Rules 14.08(7), 17.56
            Released on 2/2/2016 (Updated on 26/2/2016)

            Question:

            Will the guidance letters on disclosure in listing documents, mostly included under the title "Simplification Series", not to be used and be withdrawn after the publication of Guidance Letter HKEX-GL86-16 on 2 February 2016?

            Answer:

            The following guidance letters on disclosure in listing documents, mostly included under the title "Simplification Series", have been withdrawn:

            A. HKEX-GL27-12 on "Summary and Highlights" section
            B. HKEX-GL54-13 on "Risk Factors" section
            C. HKEX-GL48-13 on "Industry Overview" section
            D. HKEX-GL49-13 on "History and Development" section
            E. HKEX-GL-50-13 on "Business" section
            F. HKEX-GL59-13 on "Financial Information" or "Management discussion and analysis on the historical financial information (MD&A)" section
            G. HKEX-GL72-14 on "Applicable laws and Regulations" section
            H. HKEX-GL62-13 on "Directors, Supervisors and Senior Management" section
            I. HKEX-GL33-12 on "Use of Proceeds" section
            J. HKEX-GL64-13 on Application Forms and "How to Apply for Hong Kong Offer Shares" section

            Applicants which submit their listing applications after 30 April 2016 should comply with the Consolidated Guidance.

            FAQ 003-2016
            LR reference: Main Board Rules 2.13, 11.07 / GEM Rules 14.08(7), 17.56
            Released on 2/2/2016 (Updated on 13/5/2016)

          • Chapter 3

            View Current PDF

            Question:

            Authorised Representatives will be required to provide their email addresses to the Exchange. Is this requirement applicable to existing Authorised Representatives?

            Answer:

            Yes, it does apply to existing Authorised Representatives.

            FAQ Series 17, FAQ No. 9
            LR reference: Main Board Rules 3.06 / GEM Rules 5.25
            Released on 19/12/2011

            Question:

            If issuers do not follow the guides named in the Note ("A Guide on Directors' Duties" issued by the Companies Registry, and the Guidelines for Directors and Guide for Independent Non-executive Directors published by the Hong Kong Institute of Directors), do they breach the Listing Rules?

            Answer:

            No. These guides are suggested as resources for directors looking for further guidance on their duties and responsibilities to an issuer.

            FAQ Series 17, FAQ No. 10
            LR reference: Main Board Rules Note to Rule 3.08 / GEM Rules Note to Rule 5.01
            Released on 19/12/2011

            Question:

            The Corporate Governance Guide for Boards and Directors (Guide) published by the Exchange in December 2021 provides the best practice guidance for the delivery of good corporate governance, if issuers do not follow the Guide, do they breach the Listing Rules?

            Answer:

            No. The Guide aims to provide practical advice to boards and directors, and in some cases, set out the expectations placed on directors. However, the Guide does not form a part of the Listing Rules, nor do they amend or vary any Rule requirements, or absolve issuers and/or their directors of any obligations to make their own judgment.

            FAQ Series 17, FAQ No. 10A
            LR reference: Main Board Rules Note to Rule 3.08 / GEM Rules Note to Rule 5.01
            Released on 01/01/2022

            Question:

            Clarify the requirement of "appropriate professional qualifications".

            Clarify the requirement of "appropriate accounting and related financial management expertise".

            Answer:

            For the requirement of “appropriate professional qualifications”, we normally refer to professional accounting qualifications.

            For a candidate with other professional qualifications, we have set out our expectations in the note to Main Board Rule 3.10(2)/ GEM Rule 5.05(2). Issuers should also consider whether based on the experience and expertise of the candidate, the individual can fulfil the requirement under Main Board Rule 3.10(2)/ GEM Rule 5.05(2).

            FAQ Series 17, FAQ No. 10B (Previously published in FAQ Series 1 No.2)
            LR reference: Main Board Rules 3.10(2) / GEM Rules 5.05(2)
            Released on 30/3/2004 (Updated on 28/12/2018)

            Question:

            Is a professional qualification obtained from an overseas jurisdiction acceptable, such as a PRC or Singapore qualified accountant?

            Answer:

            Yes, a professional qualification obtained from a recognised body in an overseas jurisdiction would be acceptable.

            FAQ Series 17, FAQ No. 10C (Previously published in FAQ Series 1 No.3)
            LR reference: Main Board Rules 3.10(2) / GEM Rules 5.05(2)
            Released on 30/3/2004

            Question:

            Can a solicitor be said to have appropriate professional qualifications, or does the individual need to have the appropriate experience?

            Answer:

            A legal qualification is not considered to be an appropriate professional qualification even if the person has obtained some accounting knowledge in the course of their studies. A person with a legal qualification is acceptable if the person has the “appropriate accounting and related financial management expertise” required under the Rules. The Exchange may question the factors the board has considered when making the decision to accept a person.

            FAQ Series 17, FAQ No. 10D (Previously published in FAQ Series 1 No.4)
            LR reference: Main Board Rules 3.10(2) / GEM Rules 5.05(2)
            Released on 30/3/2004 (Updated on 28/12/2018)

            Question:

            Can a person who has served on the audit committee of an issuer for a number of years be considered to have the appropriate accounting and related financial management expertise required under the rules?

            Answer:

            Please refer to the note to Main Board Rule 3.10(2)/ GEM Rule 5.05(2) as to what the appropriate expertise means. Prima facie, we would not consider a person whose only experience has been a member of an audit committee to fulfil the criteria set out in the note to the Rule.

            FAQ Series 17, FAQ No. 10E (Previously published in FAQ Series 1 No.5)
            LR reference: Main Board Rules 3.10(2) / GEM Rules 5.05(2)
            Released on 30/3/2004 (Updated on 28/12/2018)

            Question:

            Is experience with a non-public company acceptable as having the appropriate accounting and related financial management expertise?

            Answer:

            Generally no, but the Exchange recognises that experience and scope of duties of a candidate may demonstrate that the individual is capable of discharging the role required of such person as set out in Main Board Rule 3.10(2)/ GEM Rule 5.05(2). It is up to the board to evaluate the totality of the individual's experience and education to consider if the individual is acceptable.

            FAQ Series 17, FAQ No. 10F (Previously published in FAQ Series 1 No.6)
            LR reference: Main Board Rules 3.10(2) / GEM Rules 5.05(2)
            Released on 30/3/2004 (Updated on 28/12/2018)

            Question:

            How does the board assess if the commitment of an independent non-executive directors (INEDs) or non-executive directors (NEDs) to the issuer’s affairs is sufficient (especially for smaller issuers that have infrequent changes to their business or group structure) when normally they are not required to be involved in the management of the issuer?

            Answer:

            The Code recognises that different directors have different roles and functions within the issuer. The time commitment required from a director varies from issuer to issuer and from year to year, depending on the issuer’s operations. A NED’s time commitment to the issuer is likely to be less than an ED’s because a NED is not involved in the day-to-day running of the business. According to the Code, the issuer should determine how much time it needs from each of its directors and review whether the director is meeting that requirement.

            You may refer to the Guide and Directors’ E-Training webcast entitled “INEDs’ Role in Corporate Governance”.

            FAQ Series 17, FAQ No. 11
            LR reference: Main Board Rules 3.08 / GEM Rules 5.01
            Released on 19/12/2011 (Last updated on 01/01/2022)

            Question:

            If an existing NED meets the independence requirements, can the NED be re-designated as an INED? Does an announcement need to be made for the re-designation?

            Answer:

            Yes, an existing NED may be re-designated as an INED, but we will consider the individual’s present or past relationship with a connected person or the issuer on a case-by-case basis. Where, in order to meet the Rule requirements, a director needs to comply with any relevant cooling off period under the Rules, the relevant cooling off period needs to have ended by the date on which the individual confirmation of independence is given.

            An announcement will need to be made for the redesignation from being a NED to an INED pursuant to Main Board Rule 13.51(2)/ GEM Rule 17.50(2).

            FAQ Series 17, FAQ No. 11A (Previously published in FAQ Series 1 No.7)
            LR reference: Main Board Rules 3.13 / GEM Rules 5.09
            Released on 30/3/2004  (Updated on 28/12/2018)

            Question:

            If a NED of an issuer is a legal adviser (say, a partner of a law firm) but for the past two years such director has not provided any services to the issuer, and also such director fulfils the other factors under the Main Board Rule 3.13/ GEM Rule 5.09, does this mean that such a NED can be an INED of the issuer?

            If the individual is accepted as an INED and in the future the individual provides services to the issuer again, will the individual continue to be considered independent?

            Answer:

            Yes, the individual can act as an INED provided that the individual’s firm is not providing or has not provided services to parties set out in Main Board Rule 3.13(3)/ GEM Rule 5.09(3) within two years before the individual’s appointment as an INED.

            As soon as the firm (whether or not the individual is directly involved) provides any services to parties set out in Main Board Rule 3.13(3)/ GEM Rule 5.09(3), the individual will immediately cease to be considered independent.

            FAQ Series 17, FAQ No. 11B (Previously published in FAQ Series 1 No.8) 
            LR reference: Main Board Rules 3.13 / GEM Rules 5.09
            Released on 30/3/2004 (Updated on 28/12/2018)

            Question:

            An existing INED is a partner of a law / Certified Public Accountant (CPA) firm and this firm is currently providing legal / accounting services to parties set out in Main Board Rule 3.13(3)/ GEM Rule 5.09(3). Is this existing INED not qualified as “independent” and does the issuer need to appoint a new one? How is materiality of the interest determined when considering independence? Are there any specific definitions or figures (e.g. %) that can be used as reference?

            Answer:

            The individual is not qualified to act as an INED and the issuer may or may not appoint a new INED depending on whether the issuer has sufficient INEDs on the board. However, the individual can still act as a NED. Materiality must be assessed from the issuer’s as well as the director’s perspective. There is no specific figure – materiality needs to be determined on a case-by-case basis.

            FAQ Series 17, FAQ No. 11C (Previously published in FAQ Series 1 No.9)
            LR reference: Main Board Rules 3.13 / GEM Rules 5.09
            Released on 30/3/2004 (Updated on 28/12/2018)

            Question:

            Once an INED has submitted to the Exchange the initial written confirmation concerning the INED’s independence comprising all the information required by Main Board Rule 3.13 / GEM Rule 5.09, what information must be included in the INED's annual confirmation of independence required to be provided to the listed issuer?

            Answer:

            Each INED is required to submit to the Exchange, at the same time as the submission of Form B/ H in Appendix 5 of the Main Board Rules or Form A/ B in Appendix 6 of the GEM Board Rules, a written confirmation regarding the INED's independence which must contain all the information required by Main Board Rule 3.13(a), (b) and (c)/ GEM Rule 5.09(a), (b) and (c). Each INED must provide to the issuer an annual confirmation regarding the INED's independence which must contain the information required by Main Board Rule 3.13 (a) and (c)/ GEM Rule 5.09 (a) and (c).

            FAQ Series 17, FAQ No. 11D (Previously published in FAQ Series 8 No.9)
            LR reference: Main Board Rules 3.13 / GEM Rules 5.09
            Released on 28/11/2008 (Updated on 28/12/2018)

            Question:

            For INEDs who fulfilled a one-year cooling off period and were appointed prior to 1 January 2019, would they be allowed to stay on if, on 1 January 2019, they are short of a two-year cooling off period provided they would be able to meet all other independence factors?

            Answer:

            In respect of the revised two-year cooling off period for professional advisers, the revised Rule (Main Board Rule 3.13(3) and (4) / GEM Rule 5.09(3) and (4)) will be grandfathered for INEDs appointed in 2018. It means that, if an INED was elected at an AGM held in 2018 at which time the INED had met the one-year cooling off period for a professional adviser, the INED may stay on even if the INED would not meet the new two-year cooling off requirement as at 1 January 2019. The individual will be able to serve their full term as an INED (unless there is an early termination).

            FAQ Series 17, FAQ No. 11E
            LR reference: Main Board Rules 3.13(3) and (4) / GEM Rules 5.09(3) and (4)
            Released on 28/12/2018

            Question:

            For any INED appointment to be effected after 1 January 2019, would the Exchange request for independence confirmation from the immediate family members of those INED?

            Answer:

            The Listing Rules do not require independence confirmation from the immediate family members of the INED. The Exchange, under this Note, encourages the inclusion of an INED’s immediate family members’ connection with the issuer in the assessment of their independence.

            FAQ Series 17, FAQ No. 11F
            LR reference: Main Board Rules Note 2 to 3.13 / GEM Rules Note 2 to 5.09
            Released on 28/12/2018

            Question:

            Directors/supervisors are required to provide their contact details to the Exchange using the contact details form as soon as practicable after their appointment.

            (i)    Can a director/supervisor provide his address in either English or Chinese?
            (ii)    Can a director/supervisor just provide his office phone number, instead of all the office, home and mobile numbers?

            Answer:

            (i)    Yes.
            (ii)    A director/supervisor should provide the mobile number and the telephone number (office or home, or both).

            FAQ Series N/A, FAQ No. 054-2019
            LR reference: Main Board Rules 3.20, 19A.07A / GEM Rules 5.13A, 17.91A
            Released on 01/03/2019 (Updated in February 2021)

            Question:

            As a transitional arrangement, existing directors and supervisors of listed issuers are required to provide their contact details to the Exchange by 31 March 2019.

            (i)    Can an issuer submit a single form for all its existing directors and supervisors?
            (ii)    Which “filing type” should be used for existing directors/supervisors? Are the directors/supervisors required to fill in the “effective date”?
            (iii)    If the residential address of an existing director/supervisor remains the same as that in the DU Form previously submitted to the Exchange, does he need to include such information in the form?

            Answer:

            (i)    Yes.
            (ii)    The issuer may submit the form with the filing type marked “first notification”. There is no need to fill in the “effective date” fields for existing directors and supervisors.
            (iii)    Yes.

            FAQ Series N/A, FAQ No. 055-2019
            LR reference: Main Board Rules 3.20, 19A.07A / GEM Rules 5.13A, 17.91A
            Released on 01/03/2019 (Updated in February 2021)

            Question:

            Can a NED who is a connected person of the issuer be a member of the Audit Committee?

            Answer:

            Although the Rules do not specifically prohibit this, we consider that members of the audit committee should be independent of connected persons.

            FAQ Series 17, FAQ No. 11G (Previously published in FAQ Series 1 No.10)
            LR reference: Main Board Rules 3.21 / GEM Rules 5.28
            Released on 30/3/2004

            Question:

            Can the qualified accountant (also executive director) be appointed as the audit committee's secretary?

            Answer:

            We consider that the secretary of the audit committee should not be a person who is involved in the financial reporting function of the issuer.

            FAQ Series 17, FAQ No. 11H (Previously published in FAQ Series 1 No.11)
            LR reference: Main Board Rules 3.21 / GEM Rules 5.28
            Released on 30/3/2004

            Question:

            Can the issuer's staff and executive directors be appointed as members of the remuneration committee as long as the committee is chaired by an INED and the majority of its members are INEDs?

            Answer:

            Yes. The Rules do not restrict issuers from appointing their staff or executive directors to act as members of the remuneration committee, as long as a majority of the remuneration committee are INEDs and it is chaired by an INED. However, the staff or executive directors must avoid actual or potential conflicts of interest. In case such conflicts arise, the staff or executive directors must excuse themselves from the meeting or abstain from voting on the relevant decisions.

            FAQ Series 17, FAQ No. 12
            LR reference: Main Board Rules 3.25 / GEM Rules 5.34
            Released on 19/12/2011 (Updated on 28/12/2018)

            Question:

            Are board resolutions sufficient for amending the terms of reference of an issuer’s audit and remuneration committees? Or are shareholder resolutions required?

            Answer:

            Board resolutions are sufficient for amending the terms of reference of an issuer’s audit and remuneration committees (and all other committees).

            FAQ Series 17, FAQ No. 12A (Previously published in FAQ Series 21 No.5)
            LR reference: Main Board Rules 3.22 and 3.26 / GEM Rules 5.29 and 5.35
            Released on 27/3/2013 (Updated on 28/12/2018)

            Question:

            The new requirement to establish a nomination committee chaired by the chairman of the board or an INED and comprising a majority of INEDs becomes effective from 1 January 2022. What happens if an issuer fails to meet any of the requirements set out in the Rule on 1 January 2022?

            Answer:

            If the issuer fails to set up a nomination committee or has failed to meet any of the other requirements in the Rule on 1 January 2022, it must set up a nomination committee and/or appoint appropriate members to the nomination committee to meet the requirement(s) within three months.

            From 1 April 2022, if the issuer fails to set up a nomination committee or at any time has failed to meet any of the other requirements in the Rule, it must immediately publish an announcement containing the relevant details and reasons. The issuer must set up a nomination committee and/or appoint appropriate members to the nomination committee to meet the requirement(s) within three months after failing to meet such requirement(s) (“Arrangement”). This is in line with the practice regarding the audit committee and remuneration committee. The issuer may select the current headline category “Miscellaneous – Other – Corporate Governance Related Matter” when submitting the announcement for publication on the HKEXnews website.

            The Arrangement would also apply to issuers with a WVR structure in respect of the requirements relating to the establishment and composition of the nomination committee under Rules 8A.27 and 8A.28.

            FAQ Series 17, FAQ No. 12B
            LR reference: Main Board Rules 3.27A, 8A.27 and 8A.28 / GEM Rules 5.36A
            Released on 01/01/2022

            Question:

            Does the Exchange provide any accreditation of professional training for company secretaries which could fulfil the requirement of this Rule?

            Answer:

            The Exchange does not generally provide accreditation of professional training courses although the Exchange considers The Hong Kong Chartered Governance Institute’s continuing professional development training (including their ECPD courses) satisfy the requirements of this Rule.

            FAQ Series 17, FAQ No. 13
            LR reference: Main Board Rules 3.29 / GEM Rules 5.15
            Released on 19/12/2011 (Last updated on 01/01/2022)

            Question:

            Does an accountant or lawyer acting as an issuer's company secretary fulfil the requirement to attend relevant professional training each year by attending CPD courses on subjects such as litigation and accounting standards?

            Answer:

            We intend that the training should be broad rather than restrictive. Where legal and accounting courses are relevant to a company secretary’s role and duties, they should count towards the 15-hour training requirement.

            FAQ Series 17, FAQ No. 13A
            LR reference: Main Board Rules 3.29 / GEM Rules 5.15
            Released on 19/12/2011 (Updated on 28/12/2018)

            Question:

            If a person is the company secretary of an issuer that is dual-listed on the Hong Kong and Shanghai stock exchanges and attends training courses relating to PRC listing requirements and regulations (to comply with Shanghai Stock Exchange requirements), do those courses count towards the 15-hour training requirement?

            Answer:

            As the company secretary of a Hong Kong issuer, this person should also undergo training on Hong Kong rules and regulations. However, the Exchange does not prescribe specific types of courses that a company secretary should attend, as long as they are relevant to their professional duties. If the training courses are of a general nature (e.g. a course on corporate governance), and not specifically on any PRC rules and regulations, then they may count towards the 15-hour training requirement.

            FAQ Series 17, FAQ No. 13B
            LR reference: Main Board Rules 3.29 / GEM Rules 5.15
            Released on 19/12/2011 (Updated on 28/12/2018)

          • Chapter 3A

            View Current PDFView Current PDF

            Question:

            What are the changes to the GEM transfer mechanism?

            Answer:

            The changes to GEM transfer mechanism are summarised below:

              Existing New
            Sponsor Not Required Required and must be appointed at least two months before the submission of the listing application
            Publication requirement

            •   Announcement of an application to transfer to Main Board

            •   Detailed transfer announcement

            •   Announcement of an application to transfer to Main Board

            •   Application Proof

            •   Listing Document

            •   Formal notice

            Certain GEM transfer applications note under transitional arrangements requires the issue of detailed transfer announcements only

            Initial listing fee 50% of the Main Board initial listing fee Standard initial listing fee for Main Board

            Note: A GEM transfer application submitted by an Eligible Issuer (as defined in Main Board Rule 9A.01A) that has not changed its principal business and controlling shareholder since listing on GEM, and is not an infrastructure or a mineral company. See FAQ No. 014-2017 for further information.

            FAQ Series N/A, FAQ No. 011-2017
            LR reference: Main Board Rules 3A, 9A.01A, Appendix 28 paragraph 9
            Released on 15/12/2017

            Question:

            A Main Board new applicant has appointed Entity A to be sponsor to its IPO. If the new applicant subsequently appoints Entity A (or one of its group companies) as an overall coordinator before the expiration of the 2-week period following the submission of its listing application, can Entity A (or its relevant group company) be regarded as a sponsor-overall coordinator?

            Answer:

            In the scenario described, while Entity A (or its relevant group company) would be acting as a sponsor and an overall coordinator for the IPO, it would not be a sponsor-overall coordinator under Rule 3A.43. In order to become a sponsor-overall coordinator for the purpose of Rule 3A.43, Entity A and/or its group company must be appointed as sponsor and overall coordinator at the same time and the appointment must be made at least 2 months before the submission of the listing application.

            See also FAQ No. 9A in relation to the appointment of a sponsor-overall coordinator for a placing involving bookbuilding activities (as defined under the Code of Conduct) in connection with the New Listing of a special purpose acquisition company (“SPAC”). 

            FAQ 077-2022, FAQ No. 5
            LR reference: Main Board Rules 3A.02, 3A.35, 3A.43
            Released on 22/4/2022 (Updated on 27/5/2022)

            Question:

            Can a Main Board new applicant contemplating a New Listing on the Exchange which does not fall within the New Code Provisions (e.g. listing by introduction or an offer by public subscription only) appoint a sponsor-overall coordinator in accordance with the Listing Rules to prevent the 2-month waiting period in case the new applicant subsequently decides during the listing process to conduct an IPO which will involve a placing tranche instead?

            Answer:

            Yes, in the scenario described, the new applicant can appoint a sponsor-overall coordinator (or other overall coordinators) when it is considering a listing on the Exchange, irrespective of whether the New Code Provisions apply to the initial proposed method of listing. It can rely on the sponsor-overall coordinator appointed to provide advice on the merits of, and the need to adopt, a placing tranche, depending on market conditions and the new applicant’s preference for its future shareholder base.

            Where a new applicant, which had initially planned to list on the Exchange by way of introduction or by public offering only and had not appointed any sponsor-overall coordinator no later than 2 months before the submission of its listing application, subsequently decides to include a placing tranche in its IPO after the submission of its listing application, the new applicant will have to re-file its listing application at least 2 months after the appointment of a sponsor-overall coordinator if it intends to continue with the listing application process.

            See also FAQ No. 9A in relation to the appointment of a sponsor-overall coordinator for a placing involving bookbuilding activities (as defined under the Code of Conduct) in connection with the New Listing of a SPAC.

            FAQ 077-2022, FAQ No. 6
            LR reference: Main Board Rules 3A.02, 3A.43
            Released on 22/4/2022 (Updated on 27/5/2022)

            Question:

            Under the Note to Rule 3A.02, a sponsor should, before accepting an appointment by a new applicant as sponsor, (a) be independent of the new applicant and fulfill all other criteria in Rule 3A.43, or (b) obtain a written confirmation from the new applicant that at least one sponsor-overall coordinator has been appointed in accordance with Rule 3A.43.

            Does this mean, under the Rule Amendments, a sponsor-overall coordinator (or an entity within its group of companies that is proposed to be appointed as sponsor, where applicable) will be required to complete its independence check and confirm its independence from the new applicant before accepting its appointment as sponsor, unless another sponsor-overall coordinator (or an entity within its group of companies that is appointed as sponsor, where applicable) had done so?

            Answer:

            Under Rule 3A.03, a sponsor must provide an undertaking and statement of independence to the Exchange at the same time as a listing application on behalf of a new applicant is submitted to the Exchange. No change has been introduced to this requirement in the Rule Amendments.

            We do not expect the current practice to change in regards to the independence confirmation of sponsors under Rule 3A.03. The confirmation of independence is done subject to the outcome of the due diligence exercise to be performed by the sponsor(s) in connection with the listing application.

            So if a sponsor accepts an appointment by a new applicant as a sponsor-overall coordinator under Rule 3A.43 on a preliminary basis subject to completion of the due diligence check, in the event the sponsor is concluded to be not independent of the new applicant, another sponsor (or an entity within its group of companies) will need to be appointed as a sponsor-overall coordinator in accordance with Rule 3A.43.

            FAQ 077-2022, FAQ No. 9
            LR reference: Main Board Rules 3A.03, 3A.02, 3A.43
            Released on 22/4/2022

            Question:

            What are the facilitative measures for GEM transfer applicants after the removal of the GEM streamlined process?

            Answer:

            Facilitative measures are as follows:

            (a) Dispensation from the following requirements for GEM transfer applicants which follow Chapter 9 application procedures2 (see new Main Board Rule 9A.03(1A) and Main Board Rule 9A.03(1B)):

            -   Main Board Rule 9.11(17a): production of certificate of incorporation;

            -   Main Board Rule 9.11(30): production of a HKSCC notice that the securities to be listed are Eligible Securities; and

            -   Main Board Rule 12.01B: publication of Post Hearing Information Pack requirement.

            (b) Dispensation from the post-IPO lock-up on controlling shareholders requirement is maintained (Main Board Rule 10.07(4)), provided that any plan by the controlling shareholders of the issuer to dispose of their interests in the issuer in the next 12 months has been prominently disclosed in the listing document.

            (c) Dispensation from the restriction on post-listing fund-raising is maintained (Main Board Rule 10.08(5)), provided that any plan to raise funds within six months from the date of the transfer of the issuer's listing to the Main Board has been prominently disclosed in the listing document.

            (d) Dispensation from the compliance adviser requirement under Main Board Rule 3A.19 is maintained (Main Board Rule 9A.13 and new Main Board Appendix 28, paragraph 16).

            (e) The GEM delisting procedures under Chapter 9 of the GEM Rules do not apply to GEM transfer applications.

            FAQ Series N/A, FAQ No. 018-2017
            LR reference: Main Board Rules 3A.199.11(17a), 9.11(30), 9A.1310.07(4), 12.01B / GEM Rule 9.20
            Released on 15/12/2017

            Question:

            Do the sponsor regime requirements implemented in 2013 apply to a GEM transfer?

            Answer:

            Yes, a GEM transfer applicant must appoint a sponsor to assist it in its application at least two months prior to the submission of the listing application. Where the GEM transfer requires the publication of a listing document, the sponsor must also submit a substantially complete application proof under Main Board Rule 9.03(3).

            FAQ Series N/A, FAQ No. 020-2017
            LR reference: Main Board Rules 3A.023A.02B, Appendix 28 Paragraph 4
            Released on 15/12/2017

            Question:

            Under Main Board Rule 3A.02B(1)/ GEM Rule 6A.02B(1) requires a listing application to be submitted by or on behalf of a new applicant no less than 2 months from the date of the sponsor's formal appointment. How is the “date of the sponsor’s formal appointment” determined?

            Answer:

            It shall be the later of the date of (i) the engagement letter; or (ii) the effective date of the sponsor’s appointment as stated in the engagement letter (if applicable). However, if a sponsor fails to notify the Exchange in writing of its appointment as soon as practicable as required under Main Board Rule 3A.02A(1)/ GEM Rule 6A.02A(1), which should normally be within five business days from the date of the engagement letter, the Exchange may treat the date of the notification as the date of the sponsor's formal appointment.

            FAQ Series 24, FAQ No. 3
            LR reference: Main Board Rules 3A.02A(1), 3A.02B(1) / GEM Rules 6A.02A(1), 6A.02B(1)
            Released on 26/7/2013 (Updated in February 2020)

            Question:

            Is a sponsor required to inform the Exchange in writing upon the expiry of its engagement? What if its engagement terminates prior to the filing of a listing application or after the listing application lapses?

            Answer:

            Yes. Pursuant to Main Board Rule 3A.02A(2) / GEM Rule 6A.02A(2), a sponsor should notify the Exchange in writing when it ceases to act as the sponsor of an applicant, whether as a result of termination or expiry of a sponsor's engagement, and regardless of whether there is a live listing application.

            FAQ Series 24, FAQ No. 3A
            LR reference: Main Board Rule 3A.02A(2) / GEM Rule 6A.02A(2)
            Released on 7/12/2018

            Question:

            In the case of an announcement to be published by an IPO applicant, why is a sponsor required to provide a confirmation that the announcement has been cleared by HKEx (where such clearance is required under the Listing Rules) or that the document is required to be published by the IPO applicant (where such clearance is not so required)?

            Answer:

            Under its undertaking pursuant to Listing Rules MB 3A.03 or GEM 6A.03, the sponsor must use reasonable endeavours to ensure that all information provided to HKEx during the listing application process is true in all material respects and does not omit any material information.

            The purpose of the undertaking is to help ensure that the sponsor is aware of its responsibility under the Listing Rules with regard to the announcement.

            FAQ Series 3, FAQ No. 104
            LR reference: Main Board Rules 3A.03 / GEM Rules 6A.03
            Released on 22/3/2007 (Updated on 21/5/2007)

            Question:

            What should the sponsor do if there is a change in circumstances rendering the sponsor no longer independent after filing the listing application?

            Answer:

            The sponsor and the new applicant must notify the Exchange as soon as possible. It should be noted if the change results in the applicant not having at least one sponsor that is independent under Main Board Rule 3A.07 (GEM Rule 6A.07), it must appoint a new independent sponsor and pursuant to Main Board Rule 3A.02B (GEM Rule 6A.02B), the applicant can resubmit its listing application no less than two months from the date such new independent sponsor is formally appointed.

            FAQ Series 8, FAQ No. 14
            LR reference: Main Board Rule 3A.09Appendix 17 to the Rules/ GEM Rule 6A.09Appendix 7K to the Rules
            Released on 28/11/2008 (Updated in February 2020)

            Question:

            Can the designated sponsor under Rule 3A.10(1) (GEM Rule 6A.10(1)) and the designated sponsor-overall coordinator under Rule 3A.44 (the designated overall coordinator under GEM Rule 6A.42) be two different intermediaries (not within the same group of companies)?

            Answer:

            Yes, they could be two different intermediaries (not within the same group of companies).

            FAQ 077-2022, FAQ No. 4A
            LR reference: Main Board Rules 3A.10(1), 3A.44 / GEM Rules 6A.10(1), 6A.42
            Released on 4/8/2022

            Question:

            Under the Rule Amendments, what are the types of equity capital market transactions that require the appointment of a capital market intermediary to be made under a written agreement before it conducts any of the specified activities?

            Answer:

            An issuer is required to appoint a capital market intermediary by way of a written agreement before such capital market intermediary conducts any specified activities in the following types of offering involving bookbuilding activities (as defined under the New Code Provisions) (Notes 1, 2 and 3):

            (a) a placing of equity securities or interests to be listed on the Exchange, including:
            (i) a placing in connection with a New Listing (Note 4) (whether by way of a primary listing or secondary listing), including, without limitation, a reverse takeover of a listed issuer which is a deemed new listing under Rule 14.54 (GEM Rule 19.54) and a transfer of listing of equity securities or interests from GEM to Main Board under Chapter 9A of the Listing Rules; and
            (ii) a placing of equity securities or interests (Note 5) of a class new to listing or of a class al listed under a general or specific mandate in accordance with Rule 7.12A (GEM Rule 10.13) or other relevant codes and guidelines; and
            (b) a placing of listed equity securities or interests (Note 6) by an existing holder of equity securities or interests if it is accompanied by a top-up subscription by the existing holder of equity securities or interests for new equity securities or interests in the issuer.

            An issuer is not under the above obligations in respect of offerings of equity securities or interests which do not involve bookbuilding activities (as defined under the New Code Provisions), such as:

            (i) bilateral agreements or arrangements between the issuer and the investors (sometimes referred to as “club deals”);
            (ii) transactions where only one or several investors are involved and the terms of the offering are negotiated and agreed directly between the issuer and the investors (sometimes referred to as “private placements”);
            (iii) transactions where equity securities or interests are allocated to investors on a pre-determined basis at a pre-determined price;
            (iv) selling of listed equity securities or interests by existing holders of equity securities or interests, other than a placing as referred to in (b) above (sometimes referred to as “secondary offering”); and
            (v) an offering of equity securities or interests which has been subscribed by an intermediary as principal deploying its own balance sheet, for onward selling to investors (sometimes referred to as “block transactions”).

            For the avoidance of doubt, if an equity offering involving bookbuilding or placing activities (as defined in the New Code Provisions) uses a back stop arrangement (where the capital market intermediary provides a guarantee or an underwriting commitment at a minimum price to the issuer), the capital market intermediary in this connection should be appointed under a written agreement before it conducts the specified activities for such transaction under Rule 3A.33 (GEM Rule 6A.40), even if the capital market intermediary may have a right to acquire the equity securities or interests offered as principal under the relevant back stop / underwriting agreement, given that it is uncertain whether any equity securities or interests would be acquired by the capital market intermediary as principal by deploying its own balance sheet, for onward selling to investors.

            Notes:

            1. The scope of offerings to which the Rule Amendments apply is the same as that set out in paragraph 21.1.2(a) of the New Code Provisions.
            2. If a capital market intermediary does not perform, and is not and will not be appointed to perform, the specified activities in an offering set out in points (a) and (b) above, the requirement under Rule 3A.33 (GEM Rule 6A.40) will not apply to that capital market intermediary.
            3. Placing and bookbuilding activities (as defined under the New Code Provisions) do not include market sounding that is conducted to gauge investors’ interest before an issuer has decided to pursue an offering. As the timing at which an issuer makes a decision to pursue an offering is solely within its knowledge and control, the issuer is expected to communicate its decision promptly to any capital market intermediary it has authorised to conduct market sounding and to appoint the capital market intermediary under a written agreement before it conducts the specified activities in accordance with Rule 3A.33 (GEM Rule 6A.40).
            4. “New Listing” shall have the meaning as defined in Rule 1.01 (GEM Rule 1.01) in the Rule Amendments.
            5. This refers to new equity securities or interests.
            6. This refers to existing equity securities or interests.

            FAQ 077-2022, FAQ No. 3
            LR reference: Main Board Rule 3A.32, 3A.33, 3A.35 / GEM Rule 6A.39, 6A.40, 6A.42
            Released on 22/4/2022

            Question:

            Is the written engagement agreement of a syndicate CMI (including a sponsor-overall coordinator or any other overall coordinator) required to be submitted to the Exchange?

            Answer:

            The written engagement agreement should only be submitted when requested by the Exchange.

            Where the written engagement agreement (including any supplemental engagement agreement) of a syndicate CMI is submitted to the Exchange voluntarily, it is at the discretion of the Exchange or the SFC whether to review it or express any comment on its compliance with the Rules or the Code of Conduct, and where no comment on the written engagement agreement is raised, this should not be taken as an indication that the Exchange or the SFC has reviewed the agreement and has no comments on its compliance with the Rules or the Code of Conduct, and should not prevent the Exchange or the SFC from raising comments or enquiries on the agreement(s) afterwards.

            FAQ 077-2022, FAQ No. 9D
            LR reference: Main Board Rules 3A.33, 3A.34, 3A.35, 3A.36, 3A.43 / GEM Rules 6A.40, 6A.41, 6A.42, 6A.43
            Released on 4/8/2022

            Question:

            (a) With regard to the fixed fee required to be specified in the written engagement of a CMI (including an overall coordinator) under Rule 3A.34(2) (GEM Rule 6A.41(2)) (for a syndicate CMI) or Rule 3A.36(2) (GEM Rule 6A.43(2)) (for an overall coordinator), would it be acceptable for it to be expressed in the form of (i) “no less than” or “no more than” a percentage of the Total Fees; or (ii) a percentage range of the Total Fees (e.g. between [x]% and [y]% of the Total Fees)?
            (b) Would the answer in (a) be different with regard to any discretionary fee specified in the written engagement agreement of a syndicate CMI or an overall coordinator?

            Answer:

            (a) (i) “no less than [x]%” of the Total Fees: If this expression is adopted, the fixed fee of the CMI would be regarded as [x]% at the time of its engagement, whereas any fees above [x]% would be regarded for the purpose of the Rules as discretionary fees.
              (ii) “no more than [x]%” of the Total Fees: If this expression is adopted, there is no certainty as to the minimum amount of fee that the CMI may get after rendering the specified services and all that fee is accordingly, for the purpose of the Rules, discretionary. This does not meet the requirements of Rule 3A.34(2)/ 3A.36(2) (GEM Rule 6A.43(2)/ 6A.41(2)).
              (iii) a percentage range of the Total Fees: If this expression is adopted, the minimum fee prescribed by the range would be regarded for the purpose of the Rules as the fixed fees of the CMI, while any additional fees within the range would be regarded as its discretionary fees for the purpose of the Rules.
                Where the fee arrangement is expressed in the form of a tiered commission structure where a higher commission rate will apply when the deal is priced higher, the minimum fee prescribed by the tiered commission structure would be regarded for the purpose of the Rules as the fixed fees of the CMI, whereas any fees above that minimum fee would be regarded as its discretionary fees for the purpose of the Rules. Such fee arrangement should be clearly disclosed in the IPO listing document.
              The industry is further reminded that, under paragraph 21.4.2(b)(i) of the Code of Conduct, overall coordinators are required to inform the issuer on market practices for the fee split ratio, which is stated to be around 75% fixed and 25% discretionary (“75:25 ratio”) in the Conclusions Paper, and issuers should assess whether they should deviate significantly from the 75:25 ratio.The ratio of fixed and discretionary fees to be paid to all syndicate members is also required to be (a) disclosed in the Application Proof submitted for vetting purposes in accordance with paragraph 3B of Appendix 1A/1E to the Rules (paragraph 3B of Appendix 1A to the GEM Rules), where the relevant fees have al been determined (see Note 8 to HKEX-GL56-13) (see also FAQ No. 11A); and (b) notified to the Exchange four clear business days prior to the date of the expected Listing Committee hearing in accordance with Rule 9.11(23a)(d) (see also FAQ No. 10G). Regulators may make enquiries where the ratio submitted significantly deviates from the 75:25 ratio.
            (b) The Rule Amendments do not prevent the discretionary fee entitlement of a CMI from being presented in its written engagement in any of the forms referred to in sub-paragraphs (a)(i), (ii) and (iii) of this FAQ above.
              However, it should be noted that the time schedule for payment of the fee to a capital market intermediary, which is required to be specified in its written engagement under Rule 3A.34(3) (GEM Rule 6A.41(3)) (for a syndicate CMI) or Rule 3A.36(3) (GEM Rule 6A.43(3)) (for an overall coordinator), is required to cover fixed fees and any discretionary fees. This means that if the new applicant has decided at the time of the engagement of the relevant capital market intermediary that a discretionary fee may be paid to that capital market intermediary, its written engagement is required to specify the timing of payment of such discretionary fee.

            FAQ 077-2022, FAQ No. 10A
            LR reference: Main Board Rules 3A.33, 3A.34, 3A.35, 3A.36, 3A.37, 3A.43 / GEM Rules 6A.40, 6A.41, 6A.42, 6A.43, 6A.44
            Released on 4/8/2022

            Question:

            Where there is a material change to the terms of the engagement of an overall coordinator, will the date of the change be regarded as the date of its appointment for the purpose of Rules 3A.35 and 3A.37 (GEM Rules 6A.42 and 6A.44) (for an overall coordinator (other than a sponsor-overall coordinator in a Main Board transaction)), or Rule 3A.43(2) (for a sponsor-overall coordinator in a Main Board transaction)?

            Answer:

            If the material change is treated as a new engagement, the date on which such material change is made will be regarded as the date of appointment of the overall coordinator for the purpose of Rules 3A.35 and 3A.37 (GEM Rules 6A.42 and 6A.44) (for an overall coordinator (other than a sponsor-overall coordinator in a Main Board transaction)), or Rule 3A.43(2) (for a sponsor-overall coordinator in a Main Board transaction). This is subject to (i) the terms of the new engagement complying with the relevant Rules, and (ii) FAQ No. 10F.

            If the material change results in, among other things, the requirements under Rule 3A.37 /3A.43 (GEM Rule 6A.44) not being complied with, the new applicant may be required to delay its listing timetable until the relevant requirements have been re-complied with.

            As set out in FAQ No. 10C above, where the regulators become aware that a material change has been made to the fee arrangement of an overall coordinator, they might make enquiries to assess, among others, whether the material change should be treated as constituting a new engagement.

            FAQ 077-2022, FAQ No. 10D
            LR reference: Main Board Rules 3A.33, 3A.34, 3A.35, 3A.36, 3A.37, 3A.43 / GEM Rules 6A.40, 6A.41, 6A.426A.43, 6A.44

            Released on 4/8/2022

            Question:

            Could a syndicate CMI (or overall coordinator) whose fixed fee entitlement was not presented in compliance with Rule 3A.34/ 3A.36 (GEM Rule 6A.41/ 6A.43) (see FAQ Nos. 10 and 10A above for details) enter into a supplemental engagement agreement with the new applicant to re-comply with the relevant Rule requirements?

            In that case, would the date of engagement of the relevant syndicate CMI (or overall coordinator) be taken as the date of the initial engagement agreement or that of the supplemental engagement agreement for the purpose of determining compliance with the relevant timing requirement under the Rules (e.g. the 2-week deadline under Rule 3A.37 (GEM Rule 6A.44) for overall coordinators (other than sponsor-overall coordinators) or the 2-month deadline under Rule 3A.43 (for sponsor-overall coordinators))?

            Answer:

            If the fixed fee entitlement of a syndicate CMI (including an overall coordinator) was not presented as an acceptable fixed fee formulation in accordance with the responses to FAQ Nos. 10 or 10A above, the CMI will not be considered as having been appointed in compliance with the Rules.

            The new applicant shall enter into a supplemental engagement with the CMI to comply with Rule 3A.34/ 3A.36 (GEM Rule 6A.41/ 6A.43). The appointment of the CMI for the purpose of the Rules will only be regarded as having commenced on the date when the CMI is appointed in strict compliance with the Rules, i.e. the date of the supplemental engagement. For example, where the CMI in the scenario described is a sponsor-overall coordinator, the 2-month period required under Rule 3A.43(2) shall only be regarded as having commenced on the date of the supplemental engagement.

            If the initial written engagement was entered into on or before 4 August 2022 and the supplemental engagement was entered into within 1 month from 4 August 2022, the Exchange would accept the date of the initial written engagement as the date of engagement of the relevant CMI for the purpose of the Rules. However, if the initial written engagement was entered into after 4 August 2022 and/or the supplemental engagement was entered into more than 1 month after 4 August 2022, the date of the supplemental engagement agreement will be taken as the date of engagement of the relevant CMI for the purpose of the Rules.

            Please refer to FAQ No. 21 where a new applicant intends to make use of the transitional arrangement.

            FAQ 077-2022, FAQ No. 10F
            LR reference: Main Board Rules 3A.33, 3A.34, 3A.35, 3A.36, 3A.37, 3A.43 / GEM Rules 6A.40, 6A.41, 6A.426A.43, 6A.44

            Released on 4/8/2022

            Question:

            How should the fixed fees payable to a capital market intermediary be presented in the written engagement in relation to its appointment by the issuer?

            Answer:

            The written engagement must at least specify the fixed fees payable to the relevant capital market intermediary as a percentage (“fixed fee percentage”) of the total fees (including both fixed fees and discretionary fees) to be paid to all syndicate CMIs (“Total Fees”) (Notes 1, 2 and 3). This will enable each syndicate CMI to know its fixed fee entitlement relative to the  Total Fees, which is expected to enable syndicate CMIs to focus their efforts and devote their resources to providing advice to the issuer, conducting bookbuilding and placing activities in compliance with the New Code Provisions, as the case may be, and, in turn, enhance the transparency and credibility of the price discovery and allocation process. Alternatively, it is also acceptable for the written engagement to contain sufficient information for the fixed fee percentage to be calculated. For example, if the written engagement contains the fixed fee payable to the relevant capital market intermediary and the Total Fees, then the fixed fee percentage does not need to be specifically calculated in the written engagement.

            As specified in Appendix D to the Conclusions Paper, “before the issuer could decide on the fixed fees to be paid to any syndicate CMI, the issuer would need to decide (i) its total fees; and (ii) the fee split ratio”. In order for the issuer to decide how much fixed fee each syndicate CMI is entitled to and determine the fixed fee percentage of each syndicate CMI to be specified in its written engagement, the issuer must have decided, at the time of engagement of the first syndicate CMI, the Total Fees, the total fixed fees payable to all syndicate CMIs and the total discretionary fees (if any) that may be paid to syndicate CMIs (e.g. each as a percentage of the gross proceeds to be raised in the offering). The issuer is expected to maintain proper documentation of the calculation of the fixed fee percentage required to be specified under Rules 3A.34 and 3A.36 (GEM Rules 6A.41 and 6A.43).

            For the sole purpose of classifying a fee payable to a capital market intermediary (including an overall coordinator) as a “fixed” fee specified in the engagement letter under Rules 3A.34 and 3A.36 (GEM Rules 6A.41 and 6A.43), the general principle is as follows:

            Assessment is made with respect to each capital market intermediary that is engaged pursuant to the engagement agreement.  Therefore, the engagement agreement should enable the capital market intermediary to ascertain the minimum amount of fees payable to it which is not subject to the discretion of the issuer (other than because of changes in the offer price or total offer size) (“fixed fee”).
            For a fee to be regarded as "fixed fee" for Rules 3A.34 and 3A.36 (GEM Rules 6A.41 and 6A.43), both the fee entitlement and the identity of the payee CMI (including an overall coordinator) must be indicated in its written engagement.
            "Discretionary fee" is any fee other than a fixed fee.

            It should be noted that the interpretation of a fee as “fixed” or “discretionary” for the purpose of Rules 3A.34 and 3A.36 (GEM Rules 6A.41 and 6A.43) might not necessarily be the same as the legal nature of the fee from the perspective of the issuer, e.g. under contract law. For example, if an engagement agreement specifies a contracted obligation to pay a fee of 3% of the gross proceeds from the offering to all overall coordinators where the actual allocation to each overall coordinator is to be determined at an issuer’s discretion, the fee is not a “fixed fee” from the perspective of each overall coordinator for Rules 3A.34 and 3A.36 (GEM Rules 6A.41 and 6A.43) (Note 4), but the total amount of such fees payable to all overall coordinators remains the issuer’s contractual obligation and any disclosure on such fee in the listing document should reflect this nature.

            In addition to providing information on the fixed fee percentage of a CMI in accordance with the principle described in the first paragraph of this response, the written agreement of the CMI may set out additional formulations of the fixed fee payable to it depending on the commercial negotiation and preferences of the parties involved. For example, in addition to providing information on the fixed fee percentage in its mandate, a CMI may agree with the issuer to also specify its fixed fee as an absolute cash amount, or as a percentage of the gross proceeds to be raised in the offering of equity securities or interests.

            Where the fixed fee entitlement expressed in an engagement may be increased subject to the discretion of the issuer (other than due to changes in the overall offer size or offer price), the discretionary portion of the fees will be regarded as a discretionary fee for the purpose of the Rules. This is further elaborated in FAQ No. 10A below.

            Notes:

            1. “Total fees” referred to in Rules 3A.34 and 3A.36 (GEM Rules 6A.41 and 6A.43) are commonly referred to as “underwriting fees”, and include both fixed and discretionary fees for providing one or more of the following services to the new applicant: underwriting the offer, providing advice, marketing, bookbuilding, making pricing and allocation recommendations and placing the equity securities or interests with the investors. For the avoidance of doubt, this shall comprise all fixed and discretionary fees to be paid in connection with all activities falling within the scope of the New Code Provisions.
            2. If the issuer has determined at the time of the engagement of the first syndicate CMI that no discretionary fees will be paid to any of its syndicate CMIs, a CMI’s fixed fee percentage to be specified in its written engagement shall be calculated and presented on such basis (i.e. the Total Fees, being the denominator in the formula for calculating the CMI’s fixed fee percentage, will not include any discretionary fees), provided that such basis and any relevant assumptions for the calculation are clearly set out in the CMI’s written engagement.
            3. Where, for example, (i) it is specified in a CMI’s written engagement that the total fixed fee and the total discretionary fee payable to all syndicate CMIs are 3% and 1% of the gross proceeds to be raised in the offering, respectively and (ii) it is agreed that the CMI shall be entitled to 50% of the total fixed fee payable to all syndicate CMIs, it may be specified in the CMI’s written engagement for the purpose of Rule 3A.34/ 3A.36 (GEM Rule 6A.41/ 6A.43) that its fixed fee percentage is 37.5% of the Total Fees assuming that the discretionary fee is paid in full.
            4. For the avoidance of doubt, where it is specified in an overall coordinator’s written engagement that a fixed percentage of the Total Fees must be paid by the issuer to the overall coordinators as incentive fee, but the precise allocation of such fee to each overall coordinator is at the sole discretion of the issuer to be exercised at a later stage, such fee would be regarded for the purpose of Rules 3A.34 and 3A.36 (GEM Rules 6A.41 and 6A.43) as a discretionary fee.

            See also FAQ Nos. 10A to 10F below.

            FAQ 077-2022, FAQ No. 10
            LR reference: Main Board Rules 3A.34, 3A.36/ GEM Rules 6A.41, 6A.43
            Released on 22/4/2022 (Updated on 4/8/2022)

            Question:

            Under the Rule Amendments, what information in relation to fee arrangements does an issuer need to provide to capital market intermediaries involved in the Relevant Activities in the issuer’s proposed placing?

            Answer:

            The issuer shall provide the following in relation to fee arrangements to the capital market intermediaries:

            (i) at the time of engagement of a capital market intermediary by the issuer, the issuer must specify, among others, the following in the capital market intermediary’s written engagement agreement:
              (a) the fee arrangement (including the capital market intermediary’s fixed fee percentage); and
              (b) the time schedule for payment of the fees (Note 1) to the capital market intermediary; and
            (ii) before commencement of dealings in the equity securities or interests to be placed in the transaction, the issuer must determine and communicate in writing to the syndicate CMI the allocation of discretionary fee, that is, the absolute amount to be paid (Note 2), and the time schedule for the payment (Note 2) of the total fees payable, to the syndicate CMI.

            Notes:

            1. This includes fixed and (if any) discretionary fees.
            2. See Notes 1 and 2 to FAQ No. 11.

            FAQ 077-2022, FAQ No. 12
            LR reference: Main Board Rules 3A.34, paragraph 10A of Form F in Appendix 5 / GEM Rules 6A.41, paragraph 10A of Form E in Appendix 5
            Released on 22/4/2022 (Updated 4/8/2022)

            Question:

            Is it permissible under the Rule Amendments for the fixed fees specified in the written engagement of a CMI (including an overall coordinator) to be subsequently amended, for example by way of a supplemental agreement? Are these changes required to be notified to the Exchange?

            Answer:

            Where any change proposed to the original fee structure may potentially result in the contravention of the Listing Rules / the Code of Conduct, regulators shall be consulted as early as possible and before the changes are made.

            Where there is any material change to previously submitted information on fee arrangements of syndicate CMIs (including overall coordinators), including the following, the Exchange should also be notified and be provided with the updated information and the reasons for such change as soon as practicable under Rule 9.11A (GEM Rule 12.26AA):

            the aggregate of the fees and the ratio of fixed and discretionary fees paid or payable to all syndicate members required to be included in the Application Proof submitted for vetting purposes under paragraph 3B of Appendix 1A/1E to the Rules (paragraph 3B of Appendix 1A to the GEM Rules), in cases where the relevant fees have al been determined (see Note 8 to HKEX-GL56-13). See also FAQ No. 11A; and
            information including, among others, the allocation of the fixed portion of the fees paid by the issuer to each overall coordinator and the ratio of fixed and discretionary fees to be paid to all syndicate CMIs required to be submitted by no later than four clear business days prior to the Listing Committee hearing under Rule 9.11(23a) (GEM Rule 12.23AA). See also FAQ No. 10G.

            In addition, regulators may request supporting documents at any time during the listing application process in order to assess whether the fee arrangement of any syndicate CMI or any change to the terms of its engagement complies with the applicable Rule / Code of Conduct requirements.

            Where the regulators become aware that a material change has been made to the fee arrangement, the regulators will assess such change on a case-by-case basis having regard to the scale of, and the reasons for, the change. Depending on the circumstances of the case, the regulators might make enquiries to assess whether the original incentive arrangements for the CMIs involved have been fundamentally changed (e.g. the fixed fee entitlement to some existing overall coordinators is reduced significantly to the effect that a significant percentage of the fee pool is now allocated to a few CMIs appointed at a very late stage) and hence whether such change should be treated as constituting a new engagement. Examples of situations where subsequent material adjustments to fees may be regarded as justifiable include (a) resignation of an overall coordinator which necessitates a re-allocation of fees and (b) a significant reduction in offer size, which results in a commercial negotiation of revised fee arrangements.

            Overall coordinators should document in writing the reasons for any changes to the fee arrangements in their internal records.

            FAQ 077-2022, FAQ No. 10C
            LR reference: Main Board Rules 3A.34, 3A.36, 9.11(23a) (Note 2), 9.11A, paragraph 3B of Part A of Appendix 1, paragraph 3B of Part E of Appendix 1 / GEM Rules 6A.41, 6A.43, 12.23AA (Note 2), 12.26AA, paragraph 3B of Part A of Appendix 1
            Released on 4/8/2022

            Question:

            If market conditions deteriorate in the course of a secondary placing that falls within Rule 3A.42 (GEM Rule 6A.39), can the placing agents agree with the issuer to reduce their fees so that the net proceeds from the placing would not be substantially reduced despite that the placing shares are priced below the bottom end of the initial price range?

            If a reduction of fee arrangement is permitted, must such reduction of fee arrangement be included in the engagement letter and if not, do the placing agents need to consult the regulators before changes are made to the fee structure?

            What disclosure is required in the announcement on the secondary placing in respect of the placing agents’ fees?

            Answer:

            We understand that it is not a common market practice for placing agents to agree at the time of engagement that they shall reduce their fees in the event that the placing price is set below the indicative price range in a placing. However, in the event that such fee reduction arrangements have been agreed at the time of the engagement, the arrangements should be reflected in the engagement letter.

            The placing agents are not required to consult the regulators before changes are made to the fee structure given the tight timeline to complete a secondary placing.

            The announcement on the secondary placing should disclose the final rate paid/ payable to the placing agents (after discount) based on the placing price, which should have been determined by the time the relevant announcement is made. Where a placing agent agrees to waive part or all of the fee after the announcement, the issuer is normally expected to update the market on this subsequent fee waiver as a material change in information previously announced.

            FAQ 077-2022, FAQ No. 18A
            LR reference: Main Board Rules 3A.34, 3A.36 / GEM Rules 6A.41, 6A.43
            Released on 31/8/2022

            Question:

            Could the Rule Amendments be interpreted as meaning that it would be sufficient to identify and appoint a sponsor-overall coordinator no less than 2 months before the submission (or re-filing, as the case may be) of a listing application for the purpose of Rule 3A.43(2), whereas the fee arrangement of the sponsor-overall coordinator required to be included in the engagement agreement under Rules 3A.35 and 3A.36 could be determined and agreed between the sponsor-overall coordinator and the new applicant after the appointment but no later than 2 weeks after the submission (or re-filing) of the listing application?

            Answer:

            No, this interpretation is inconsistent with the Rule Amendments. Rule 3A.43(2) requires a sponsor-overall coordinator and the affiliated sponsor (either the same firm or its group company) to be appointed as such at the same time and no less than 2 months before the submission (or re-filing) of the listing application. Under Rule 3A.35, the aforementioned appointment shall be made under a written engagement agreement, which must at least specify, among others, the fee arrangements of that sponsor-overall coordinator as required under Rule 3A.36(2).

            FAQ 077-2022, FAQ No. 9B
            LR reference: Main Board Rules 3A.35, 3A.36, 3A.43
            Released on 4/8/2022

            Question:

            A new applicant intends to appoint an overall coordinator before filing its listing application, and to appoint further syndicate CMIs closer to the date of the hearing of its listing application. It is therefore specified in the initial written engagement of the overall coordinator that the overall coordinator is entitled to a fixed fee of 60% of the Total Fees, so that the new applicant could allocate the remaining 40% of the Total Fees to the remaining syndicate CMIs to be appointed at a later stage.

            (i) If fewer syndicate CMIs are eventually appointed than initially budgeted, could additional fixed fees be subsequently allocated to the overall coordinator?
            (ii) Could the engagement letter of the overall coordinator include a re-allocation mechanism that would allow its fixed fee entitlement to be subsequently reduced if more syndicate CMIs than initially budgeted are eventually appointed?

            Answer:

            (i) If it is specified in the overall coordinator’s written engagement that it is entitled to a fixed fee of 60% of the Total Fees, this would be in compliance with the relevant Rule requirements. If the remaining 40% of the Total Fees is further allocated to the overall coordinator in future at the discretion of the issuer, such fee would be regarded as its discretionary fee for the purpose of the Rules.
            (ii) No, the engagement letter of the overall coordinator shall not include a re-allocation mechanism that would result in an unquantified subsequent reduction of its fixed fee entitlement in the event that more syndicate CMIs than initially budgeted are appointed at a later stage, as the fee percentage of the overall coordinator and the extent of the subsequent reduction are unclear at the time of its engagement, and there is no certainty as to the minimum amount of fixed fees that the overall coordinator may get after rendering the specified services.

            As the deadline for appointing overall coordinators is earlier than that for appointing other syndicate CMIs (“non-OC CMIs”), in light of the positions set out in (i) and (ii) above, issuers are reminded to make their best estimate as to the number of non-OC CMIs to be appointed when they communicate to an overall coordinator at the time of entering into its engagement letter how much of the Total Fees will be awarded to it as its fixed fee.

            FAQ 077-2022, FAQ No. 10B
            LR reference: Main Board Rule 3A.36 / GEM Rule 6A.43
            Released on 4/8/2022

            Question:

            (a) Where a new applicant engages more than one sponsor-overall coordinator through a joint engagement agreement (the “First Written Agreement”), whether specifying a joint fee arrangement (including the aggregate fixed fee to be paid to all the appointed joint sponsor-overall coordinators but without specifying the fee split between or among them) in the joint engagement agreement would be sufficient to satisfy the requirements under Rule 3A.36(2)?
            (b) If the answer to (a) is no, and the same parties enter into a supplemental engagement agreement to clarify the fee split among such joint sponsor-overall coordinators, whether the Exchange will regard the date of the First Written Agreement as the date of appointment of the joint sponsor-overall coordinators for the purpose of calculating the 2-month period required under Rule 3A.43(2)?

            Answer:

            (a) No. Under Rule 3A.36(2), the fixed fee to be paid to each overall coordinator as a percentage of the Total Fees should be specified in the joint engagement agreement. See also FAQ Nos. 10 and 10A above.
            (b) Subject to FAQ No. 10F, the 2-month period required under Rule 3A.43(2) shall commence on the date when the sponsor-overall coordinator is appointed in strict compliance with the Rules. In the scenario described, the date of the latest supplemental engagement agreement will be regarded as the date of appointment of the joint sponsor-overall coordinators.

            FAQ 077-2022, FAQ No. 10E
            LR reference: Main Board Rules 3A.43, 3A.36
            Released on 4/8/2022

            Question:

            Where a new applicant who had submitted a listing application before the Effective Date (i.e. a Pre-existing Listing Application not subject to the Rule Amendments) has entered into an overall coordinator engagement agreement with the existing sponsor (or its group company) before the Effective Date to ensure that it could make use of the transitional arrangement in Part (A) of FAQ No. 21 above in case the listing application needs to be re-filed on or after the Effective Date, would it be acceptable to specify in the overall coordinator engagement letter that the provisions relating to the existing sponsor’s (or its group company’s) appointment as a sponsor-overall coordinator and other terms required under Rule 3A.36 (“OC Appointment Provisions”) would not apply if listing takes place before the lapse of the Pre-existing Listing Application?

            Answer:

            As stated in the SFC’s Consultation Paper and Conclusions Paper, the major aim of the “sponsor-coupling” proposal was to ensure that, among others, (i) at least one sponsor would be free of potential incentives to compromise its due diligence in order to secure an overall coordinator role; and (ii) at least one sponsor-overall coordinator would have obtained a good understanding of the new applicant through its due diligence work and be in a good position to give comprehensive advice to the new applicant throughout the transaction.

            In the scenario described, this is acceptable as there appears to be no uncertainty over the existing sponsor’s (or its group company’s) appointment as a sponsor-overall coordinator and the terms of its sponsor-overall coordinator engagement for the purpose of the re-filing on or after the Effective Date, given that (i) the existing sponsor (or its group company) is appointed before the Effective Date as a sponsor-overall coordinator for the potential re-filing on or after the Effective Date; (ii) the OC Appointment Provisions required under Rule 3A.36 have been determined and set out in the overall coordinator engagement letter before the Effective Date; and (iii) the OC Appointment Provisions would apply once the Pre-existing Listing Application lapses (where listing does not take place).

            FAQ 077-2022, FAQ No. 24
            LR reference: Main Board Rules 3A.43, 3A.36
            Released on 4/8/2022

            Question:

            A new applicant intends to have 3 overall coordinators for its IPO and has appointed them in accordance with the Rule Amendments. If one of the appointed overall coordinators resigns after the 2-week period following the submission of its listing application, can the new applicant appoint another overall coordinator to replace the outgoing overall coordinator?

            Answer:

            In the case of a placing in connection with a New Listing, all overall coordinators must be appointed no later than 2 weeks following the date of the submission (or re-filing) of the listing application.

            In the scenario described, following the resignation of the outgoing overall coordinator, the new applicant can no longer appoint another overall coordinator due to the expiry of the 2-week period and may only proceed with its existing listing application with the remaining 2 overall coordinators for its IPO. The new applicant may however appoint additional syndicate CMIs (other than overall coordinators) to assist with the selling effort of its IPO.

            If the existing listing application lapses subsequently, the new applicant may consider appointing a new overall coordinator to replace the outgoing overall coordinator before the end of the 2-week period following the re-filing of its listing application.

            FAQ 077-2022, FAQ No. 7
            LR reference: Main Board Rules 3A.37, 3A.42, paragraph 17A of Practice Note 22 / GEM Rules 6A.44, 6A.47, paragraph 16A of Practice Note 5
            Released on 22/4/2022

            Question:

            When does a new applicant need to publish an OC Announcement (as defined in Rule 1.01 (GEM Rule 1.01)) and what is the content requirement of such announcement?

            Answer:

            The requirement to publish an OC Announcement only applies to a placing involving bookbuilding activities in connection with a New Listing (Refer to Rule 3A.32(1)(a)(i) (GEM Rule 6A.39(1)(a)(i)).

            Publication of an OC Announcement is required:

            (i) on the same date as the new applicant files the listing application (Note) and publishes the Application Proof (or in the case of a listing of interests in a REIT, on the same date as it files an authorisation application with the Commission and publishes the Application Proof) (“Submission of the Application”).

            A new applicant that is allowed to make a confidential filing under the Listing Rules is required to publish an OC Announcement on the same date as it publishes its PHIP instead. For the avoidance of doubt, the OC Announcement shall be published immediately after and on the same date as the publication of the Application Proof (or PHIP, where applicable). Such OC Announcement shall set out the name(s) of all overall coordinator(s) appointed by the new applicant as at the date of the announcement;
            (ii) each time an additional overall coordinator is appointed after the Submission of the Application. In such a case, the OC Announcement shall be published as soon as practicable after the appointment is made and in any event no later than the first business day after the date of the appointment (which appointment shall be no later than the 14th day after the date of Submission of the Application). Each OC Announcement shall disclose the appointment and set out the name(s) of all overall coordinator(s) appointed by the new applicant as at the date of the announcement; and
            (iii) each time the appointment of an overall coordinator is terminated after the Submission of the Application (or after the publication of the first OC Announcement for applicants allowed to make a confidential filing). In such circumstances, the OC Announcement shall be published as soon as practicable after the termination takes place, and is expected to be published no later than the first business day after the date of the termination of the appointment. Each such OC Announcement shall disclose the termination and set out the name(s) of all overall coordinator(s) that remain appointed by the new applicant as at the date of the announcement.

            For the purpose of publication on the Exchange’s website, an OC Announcement must, among other things, be accompanied by appropriate disclaimer and warning statements and not contain any information regarding the proposed offering or other information that would result in it being deemed as (i) a prospectus under section 2(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance as amended from time to time (Cap. 32) (“CWUMPO”); (ii) an advertisement under section 38B(1) of the CWUMPO; or (iii) an invitation to the public in breach of section 103(1) of the SFO, as stipulated under paragraphs 4(d) and 5A of Practice Note 22 (paragraphs 3(d) and 4A of Practice Note 5 of the GEM Rules).

            Also, for the avoidance of doubt, while intermediaries appointed may be awarded titles such as “global coordinator”, “bookrunner”, “lead manager”, etc., if they fall within the definition of “overall coordinators” under the Rule Amendments by virtue of the activities they conduct or are engaged to conduct, each OC Announcement shall clearly identify them as “overall coordinators”, in addition to any other titles of these intermediaries which the new applicant may intend to disclose in the OC Announcement.

            Note: This includes a re-filing of a listing application.

            FAQ 077-2022, FAQ No. 15
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41(2), 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46(2),12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            What should a new applicant do if it failed to publish an OC Announcement at the prescribed timing under the Listing Rules?

            Answer:

            The new applicant shall publish the OC Announcement as soon as practicable and clearly state the following in the announcement:

            (i) when the OC Announcement should have been published under the Listing Rules;
            (ii) the reasons for the delay in publication;
            (iii) and that the Exchange may take action in respect of the new applicant’s listing application on the breach of the relevant Listing Rule.

            FAQ 077-2022, FAQ No. 16
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41(2), 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46(2), 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            Does a new applicant need to publish an OC Announcement on an appointment or termination of an overall coordinator that takes place before the submission of its listing application?

            Answer:

            No, the obligation to publish an OC Announcement arises only when a new applicant submits a listing application. See FAQ No. 15.

            However, the new applicant is required to notify the Exchange in writing, as soon as practicable, of a termination of an overall coordinator that takes place before the submission of the listing application, and provide the information required under Rule 3A.41(1) (GEM Rule 6A.46(1)) to the Exchange.

            Note: A new applicant that is allowed to make a confidential filing under the Listing Rules is not required to publish the first OC Announcement on the same date as it files the listing application and publishes the Application Proof. Instead, such new applicant shall publish its first OC Announcement on the same date as it publishes its PHIP.

            FAQ 077-2022, FAQ No. 17
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41, 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46, 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            Does a listed issuer need to publish an OC Announcement on an appointment or termination of an overall coordinator in relation to the placings other than in connection with a New Listing?

            Answer:

            No, the requirement for publication of an OC Announcement only applies to a new applicant effecting a placing involving bookbuilding activities in connection with a New Listing and does not apply to an offering by a listed issuer under Rule 3A.32(1)(a)(ii) or 3A.32(1)(b) (GEM Rule 6A.39(1)(a)(ii) or 6A.39(1)(b)).

            However, in an offering by a listed issuer under Rule 3A.32(1)(a)(ii) or 3A.32(1)(b) (GEM Rule 6A.39(1)(a)(ii) or 6A.39(1)(b)), it is required to notify the Exchange of the termination of an overall coordinator in writing as soon as practicable under Rule 3A.41(1) (GEM Rule 6A.46(1)).

            FAQ 077-2022, FAQ No. 18
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41, 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46, 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            (i) Where will OC Announcements be posted?
            (ii) Do OC Announcements need to be pre-vetted by the Exchange prior to publication?
            (iii) What are the publication requirements for OC Announcements?

            Answer:

            (i) OC Announcements will be posted on the “New Listings” page of the HKEXnews website.
            (ii) No
            (iii) As in the case of publication of Application Proofs and PHIPs, a new applicant shall submit the OC Announcement through HKEx-ESS for publication on the Exchange’s website, and is not required to publish the OC Announcement on its own website.

            FAQ 077-2022, FAQ No. 19
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41, 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46, 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            A new applicant has submitted a listing application before the Effective Date, which remains valid as at the Effective Date. If the new applicant appoints or terminates the engagement of an overall coordinator after the Effective Date, does it need to publish an OC Announcement?

            Answer:

            In the scenario described, the new applicant will not be required to publish an OC Announcement on the appointment or termination of the engagement of an overall coordinator that takes place after the Effective Date, as the Rule Amendments are not applicable to listing applications submitted prior to the Effective Date. For example, if a new applicant submits a listing application 1 week before the Effective Date, it will not be required to publish an OC Announcement in respect of the appointment of an overall coordinator during the 2-week period following the submission date of the listing application (even if such appointment takes place in the first week following the Effective Date).

            In the event the new applicant re-files a listing application on or after the Effective Date, it will need to comply with the applicable Rule Amendments, including those in relation to the publication of OC Announcements.

            FAQ 077-2022, FAQ No. 22
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41(2), 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46(2), 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            In each of the scenarios below, how would a Main Board new applicant’s listing application be affected if a sponsor-overall coordinator resigns after the submission of its listing application:

            (i) one sponsor-overall coordinator was duly appointed 2 months before the submission of its listing application;
            (ii) one sponsor-overall coordinator and one sponsor were duly appointed 2 months before the submission of its listing application; and
            (iii) two sponsor-overall coordinators were duly appointed before the submission of its listing application.

            Answer:

            In the scenarios (i) and (ii) described, if the new applicant intends to continue with the listing process, it must file a new listing application with the Exchange not less than 2 months from the date of the formal appointment of a replacement sponsor-overall coordinator, detailing a revised listing timetable together with the initial listing fee. In the event of a termination of the engagement of an overall coordinator, the new applicant and the outgoing overall coordinator must also notify the Exchange in writing, as soon as practicable, of the termination of the engagement of the outgoing overall coordinator together with (a) the reasons therefor and (b) a confirmation on whether it had any disagreement with the new applicant.

            In the scenario (iii) described, the new applicant may proceed with its existing listing application provided that the remaining sponsor-overall coordinator remains duly appointed.

            See also FAQ No. 9A in relation to the appointment of a sponsor-overall coordinator for a placing involving bookbuilding activities (as defined under the Code of Conduct) in connection with the New Listing of a SPAC.

            FAQ 077-2022, FAQ No. 8
            LR reference: Main Board Rules 3A.41(1), 3A.43, 3A.45
            Released on 22/4/2022 (Updated on 27/5/2022)

            Question:

            Does the requirement under Rule 3A.43(2) that a sponsor-overall coordinator must be appointed no less than 2 months before the submission (or re-filing, as the case may be) of a listing application apply in the case of a SPAC New Listing?

            Answer:

            For a placing involving bookbuilding activities (as defined under the Code of Conduct) in connection with the New Listing of a SPAC, the Exchange would accept the submission (or re-filing, as the case may be) of the listing application where the sponsor-overall coordinator is appointed no less than 1 month (instead of 2 months as required under Rule 3A.43(2)) prior to the submission (or re-filing, as the case may be), which is in line with the modification of the timing requirement on appointment of sponsors for SPAC listing applications under Rule 18B.78.

            This means that in the transaction described above, the listing application for the New Listing of the SPAC must be submitted no less than 1 month after the date of the formal appointment of the sole sponsor-overall coordinator or (where more than 1 sponsor-overall coordinator is appointed) the last sponsor-overall coordinator.

            FAQ 077-2022, FAQ No. 9A
            LR reference: Main Board Rule 3A.43
            Released on 27/5/2022

            Question:

            In the event that a Main Board new applicant has al appointed a sponsor for its proposed New Listing (that involves a placing) before the Effective Date, is it required to terminate the existing sponsor engagement and re-appoint the relevant intermediary as a sponsor and an overall coordinator (or re-appoint the relevant intermediary as a sponsor and appoint an intermediary within its group of companies (“group company”) as an overall coordinator) at the same time for the purpose of complying with the requirement on sponsor-overall coordinators under Rule 3A.43(2) if the new applicant (A) re-files its listing application on or after the Effective Date after the previous listing application lapses, or (B) files its listing application for the first time on or after the Effective Date?

            Answer:

            In general, sponsors are reminded of their responsibilities to advise their issuer clients on compliance with the rules and regulations that are expected to apply to the relevant listing applications at the relevant times.

            (A) Re-filings of listing applications of Main Board new applicants submitted before the Effective Date (“Pre-existing Listing Applications”)

            As set out in the “Information Paper on (i) Rule amendments on bookbuilding and placing activities in equity capital market transactions and sponsor coupling to complement the SFC’s new Code of Conduct provisions; and (ii) housekeeping Rule amendments” published by the Exchange on 22 April 2022 and FAQ No. 20 above, the Rule Amendments will not apply to Pre-existing Listing Applications.

            This means that Main Board new applicants are not required to appoint an overall coordinator or a sponsor-overall coordinator or comply with Rule 3A.43(2) in respect of such Pre-existing Listing Applications. In the event that the Pre-existing Listing Application lapses and is re-filed (Note 1) on or after the Effective Date, provided that:
            (i) the existing independent sponsor has been appointed as such before the Effective Date and at least 2 months before the submission of the re-filing, and the notification of the sponsor engagement has been submitted to the Exchange in accordance with Rule 3A.02A(1) and in any event before the Effective Date (Notes 2 and 4);
            (ii) the independent sponsor referred to in condition (i) above or its group company has also been appointed as an overall coordinator for the purpose of Rule 3A.43 before the Effective Date and at least 2 months before the submission of the re-filing (Notes 3 and 5);
            (iii) the engagements of such sponsor and overall coordinator remain valid and effective as at the time of the re-filing; and
            (iv) the re-filing is submitted within 3 months from the lapse of the last listing application,
              we would accept the overall coordinator referred to in condition (ii) above as having been duly appointed as a sponsor-overall coordinator for the purpose of Rule 3A.43 even though its appointment as an overall coordinator was not made at the same time as it or its group company was appointed as a sponsor.
            (B) Certain listing applications submitted by Main Board new applicants for the first time on or after the Effective Date and their subsequent re-filings

            In the event that a Main Board new listing application is submitted for the first time on or after the Effective Date, the Rule Amendments shall apply. This means that, amongst other things, the Main Board new applicant whose listing is expected to involve a placing should appoint at least one sponsor-overall coordinator in accordance with the New Code Provisions and the Rule Amendments.

            However, we acknowledge that where a sponsor mandate has been entered into before the publication of the Rule Amendments (i.e. 22 April 2022) (“Publication Date”) but the listing application is only for submission on or after the Effective Date, the new applicant might not be able to strictly comply with the requirement to appoint the sponsor and the overall coordinator at the same time for the purpose of complying with the requirement on sponsor-overall coordinators under Rule 3A.43(2) when it submits the listing application for the first time on or after the Effective Date.

            The purpose of the Rule Amendments is not to require such new applicant to terminate the existing sponsor engagement and re-appoint the relevant intermediary as a sponsor and an overall coordinator (or re-appoint the relevant intermediary as a sponsor and appoint its group company as an overall coordinator) in connection with such application and subsequent re-filings, provided that:
            (i) the new applicant has al appointed an independent sponsor before the Publication Date, and the notification of the sponsor engagement has been submitted to the Exchange in accordance with Rule 3A.02A(1) before the Publication Date (Note 4);
            (ii) the independent sponsor referred to in condition (i) above or its group company has also been appointed as an overall coordinator (Note 3) for the purpose of Rule 3A.43 before the Effective Date and at least 2 months before the submission of the initial application or re-filing (where applicable) (Note 5);
            (iii) the engagements of such sponsor and overall coordinator remain valid and effective as at the time of the submission of the initial application or re-filing (where applicable); and
            (iv) where applicable, the re-filing is submitted within 3 months from the lapse of the last listing application.
              Provided that the four conditions described above in Part (B) are met, we would accept the overall coordinator referred to in condition (ii) above as having been duly appointed as a sponsor-overall coordinator for the purpose of Rule 3A.43.

            Under the circumstances where the conditions described above in Part (A) or (B) (as the case may be) are met, no application is required to be submitted by a new applicant or its sponsor for the Exchange’s consent for following the relevant transitional arrangement). However, where a new applicant intends to make use of the transitional arrangement in Part (A) or (B) above (as the case may be), the sponsor of the new applicant shall notify the Exchange in writing of the appointment of the overall coordinator under condition (ii) in Part (A) or (B) as soon as practicable after such appointment is made.

            If the fee arrangement in the initial written engagement for the appointment of the overall coordinator under condition (ii) above was not presented in compliance with the Rules (as detailed in FAQ Nos. 10 and 10A) and a supplemental engagement is entered into pursuant to FAQ No. 10F, the sponsor of the new applicant shall notify the Exchange in writing that such supplemental engagement has been entered into, the dates of the initial engagement and the supplemental engagement and the changes made pursuant to the supplemental engagement. For the avoidance of doubt, if the Exchange had al been notified of the initial engagement, the sponsor of the new applicant would be required to notify the Exchange where a supplemental engagement has been entered into pursuant to FAQ No. 10F, even if the new applicant may eventually be unable to make use of the transitional arrangement.

            The above notification(s) shall be made in writing by email to the relevant vetting team (where the listing application has al been filed) or to ipoteamadmin@hkex.com.hk (where the initial listing application has yet to be filed). 

            Notes:

            1. This applies to subsequent re-filings as well provided that the conditions set out in Part (A) above are met.
            2. For the avoidance of doubt, if the notification of the initial sponsor engagement of the existing independent sponsor had previously been submitted to the Exchange in accordance with Rule 3A.02A(1), such notification will not need to be re-submitted to the Exchange for the purpose of fulfilling condition (i) of Part (A) above.
            3. For the avoidance of doubt, in respect of a sponsor-overall coordinator other than that referred to in condition (ii) in Parts (A) and (B) above (e.g. if the engagement of the sponsor-overall coordinator referred to in condition (ii) above ceases and another intermediary or intermediaries is/are engaged as a replacement sponsor-overall coordinator), a Main Board new applicant shall comply fully with, inter alia, Rule 3A.43, including the requirement under Rule 3A.43(2) to make sure that the appointments of the sponsor and the overall coordinator in respect of such sponsor-overall coordinator are made at the same time.
            4. In line with Rule 18B.78, references to “2 months” in condition (i) in Parts A and B above shall be modified to 1 month in the case of a placing involving bookbuilding activities (as defined under the Code of Conduct) in connection with the New Listing of a SPAC.
            5. References to “2 months” in condition (ii) in Parts A and B above shall be modified to 1 month in the case of a placing involving bookbuilding activities (as defined under the Code of Conduct) in connection with the New Listing of a SPAC. See also FAQ No. 9A above.

            Considering the new obligations and additional responsibilities under the Rule Amendments, Main Board new applicants are reminded to take into account the conditions set out above if they wish to rely on the transitional arrangements to avoid any unintended delay in their listing timetables and be mindful of, among others, (a) the timing for negotiating and entering into a new/additional engagement with their existing independent sponsor (or its group company) and/or overall coordinator; (b) the preparation required in advance for a re-filing to be submitted within 3 months from the lapse of the last listing application; and (c) any contingencies which may result in a re-filing on or after the Effective Date (e.g. delay of the listing date to after the Effective Date and lapse of the listing application shortly before it).

            We have set out some illustrative examples highlighting the key dates in respect of the transitional arrangements in the Appendix.

            Appendix
            If a Main Board new applicant expects a potential need to re-file or submit its first listing application* on or after the Effective Date, the following examples# illustrate the key dates that should be noted for fulfilling the conditions in Part (A) (“Part (A)”) or Part (B) (“Part (B)”)* in FAQ No. 21 above in order to follow the transitional arrangements in relation to compliance with Rule 3A.43(2) in the Rule Amendments:

              (For illustration only) 
            Date of lapse of the last listing application
            (For illustration only)  
            Date of appointment of the existing independent sponsor (referred to in condition (i) in Part (A) or (B)*) (“Existing Sponsor”)
             
            (For illustration only) 
            Date of appointment of the Existing Sponsor or its group company as an overall coordinator for the purpose of Rule 3A.43
             
            Earliest date** of re-filing or first submission* under Part (A) or (B)*:
            Re-filing 
            under 
            Part (A)
            5 May 2022
             
            1 May 2021  5 June 2022 5 August 2022
            4 July 2022
             
            4 August 2022 4 October 2022
            4 July 2022
             
            5 August 2022 N/A (Note 1)
            4 May 2022
             
            5 June 2022 N/A (Note 2)
            First submission under
            Part (B)
            N/A 21 April 2022
             
            5 June 2022 5 August 2022
            21 April 2022
             
            4 August 2022 4 October 2022
            22 April 2022
             
            4 August 2022 N/A (Note 3)
            21 April 2022
             
            5 August 2022 N/A (Note 4)
             
            * As the case may be
            ** Earliest date in order to comply with the requirement of appointing the overall coordinator in condition (ii) of Part (A) or Part (B)* in FAQ No. 21 at least 2 months before the re-filing or first submission*
            # For the avoidance of doubt, the illustrative examples in this Appendix do not apply to a placing involving bookbuilding activities (as defined under the Code of Conduct) in connection with the New Listing of a SPAC. Please refer to Notes 4 and 5 to FAQ No. 21 for details.

            Notes:

            1. As the date of appointment of the Existing Sponsor or its group company as an overall coordinator is 5 August 2022, i.e. not before the Effective Date, condition (ii) of Part (A) is not met and the re-filing could not be made in reliance of the transitional arrangements in Part (A).

            Accordingly, for a new applicant which intends to rely on the transitional arrangements in Part (A) to comply with Rule 3A.43 and re-file its listing application on or after the Effective Date, the Existing Sponsor or its group company must be duly appointed as an overall coordinator for the purpose of Rule 3A.43 latest by 4 August 2022 (provided that the re-filing date is at least 2 months after such appointment date, but within 3 months from the date of lapse of the last listing application).
            2. As Part (A) provides that the overall coordinator appointment should be made at least 2 months before the re-filing, the earliest date** on which the re-filing could be made is 5 August 2022 in this example. However, this would result in the new applicant in this example not meeting condition (iv) of Part (A) (which requires the re-filing to be made by 4 August 2022, i.e. within 3 months from 4 May 2022, the date of lapse of the last listing application). Thus, re-filing could not be made in reliance of the transitional arrangements in Part (A) in this example.
            3. As the Existing Sponsor is appointed as a sponsor on 22 April 2022, i.e. not before the Publication Date, condition (i) of Part (B) is not met and the first submission of the listing application could not be made in reliance of the transitional arrangements in Part (B).

            Accordingly, for a new applicant which intends to rely on the transitional arrangements in Part (B) to comply with Rule 3A.43 and submit its initial listing application on or after the Effective Date, the Existing Sponsor must be duly appointed, together with the notification of the sponsor engagement submitted to the Exchange in accordance with Rule 3A.02A(1), no later than 21 April 2022.
            4. As the date of appointment of the Existing Sponsor or its group company as an overall coordinator is 5 August 2022, i.e. not before the Effective Date, condition (ii) of Part (B) is not met and the first submission could not be made in reliance of the conditions in Part (B).

            Accordingly, for a new applicant which intends to rely on the transitional arrangements in Part (B) to comply with Rule 3A.43 and submit its initial listing application on or after the Effective Date, the Existing Sponsor or its group company must be duly appointed as an overall coordinator for the purpose of Rule 3A.43 latest by 4 August 2022 (provided that the submission date of its listing application is at least 2 months after such appointment date).

            FAQ 077-2022, FAQ No. 21
            LR reference: Main Board Rules 3A.43
            Released on 22/4/2022 (Updated on 4/8/2022)

            Question:

            Is every sponsor-overall coordinator (or one of the companies within its group of companies) also required to be appointed as an independent sponsor, or would it be sufficient for the purpose of Rule 3A.43 where at least one sponsor-overall coordinator (or one of the companies within its group of companies) has been appointed as an independent sponsor?

            Answer:

            All criteria in Rule 3A.43 (including the sponsor independence requirement) must be fulfilled for an overall coordinator to qualify as a sponsor-overall coordinator. This means that each sponsor-overall coordinator must either be an independent sponsor or within the same group of companies as an independent sponsor.

            A capital market intermediary cannot be appointed as a sponsor-overall coordinator if it is neither a sponsor independent from the issuer nor any entity within the group of companies of an independent sponsor.

            FAQ 077-2022, FAQ No. 8A
            LR reference: Main Board Rules 3A.43
            Released on 4/8/2022

            Question:

            Is the requirement under Rule 3A.43 considered to have been satisfied if the overall coordinator engagement letter of the sponsor-overall coordinators are signed jointly, whilst each sponsor-overall coordinator enters into separate fee letters with the new applicant at the same time as the execution of the joint engagement letter due to confidentiality?

            Answer:

            Yes, in the scenario described, the requirement under Rule 3A.43 will be regarded as satisfied.

            FAQ 077-2022, FAQ No. 9C
            LR reference: Main Board Rules 3A.43
            Released on 4/8/2022

            Question:

            Under the Rule Amendments, a new applicant and its directors shall provide each syndicate member with a list of the directors and existing shareholders of the new applicant, their respective close associates and any person who is engaged by or will act as a nominee for any of the foregoing persons to subscribe for, or purchase shares in connection with a New Listing (“Restricted Investors”).

            (i) Does this requirement apply to new applicants with a primary listing on an overseas exchange given they may have a large shareholder base and the compilation of the list of Restricted Investors may be cumbersome?
            (ii) Does the requirement apply to a placing of shares by a listed issuer that falls under Rules 3A.32(1)(a)(ii) or 3A.32(1)(b) (GEM Rule 6A.39(1)(a)(ii) or 6A.39(1)(b))?

            Answer:

            (i) In the case of a placing in connection with a New Listing, the Listing Rules prohibit Restricted Investors from subscribing for the equity securities or interests of a new applicant unless with consent from the Exchange. The provision of the required information set out in Rule 3A.46 (GEM Rule 6A.48) is to assist the syndicate members to identify such Restricted Investors.

            A new applicant seeking a secondary listing or a dual primary listing with an offering on the Exchange has the same obligation under Rule 3A.46 (GEM Rule 6A.48) to assist their syndicate members to meet their general obligation to take all reasonable steps to identify Restricted Investors.

            Under the current practice, given there may be material changes in the Restricted Investors during the listing process of a new applicant seeking a secondary listing or a dual primary listing on the Exchange, it may apply for the Exchange’s consent under paragraphs 5(1) and (2) of Appendix 6 to the Listing Rules (GEM Rule 10.12(1A)(a) and (b)) and a waiver of Rule 10.04 (GEM Rule 13.02(1)) in order to allow certain existing shareholders of the new applicant to subscribe for equity securities or interests in its IPO.

            Guidance Letter HKEX-GL85-16 provides that the Exchange will consider giving the above consent and granting the above waiver to a new applicant’s existing shareholders or their close associates to participate in an IPO if any actual or perceived preferential treatment arising from their ability to influence the listing applicant during the allocation process can be addressed (for example, where all the conditions set out in paragraph 4.20 of the above guidance letter are fulfilled, the Exchange may consider that the actual or perceived preferential treatment given to the relevant existing shareholders or their close associates by virtue of their relationship with the new applicant can be addressed and will ordinarily give its consent for allocation of securities to such shareholders or their close associates).
            (ii) No, this requirement only applies to a placing in connection with a New Listing.

            However, listed issuers are reminded to comply with the requirement of the Listing Rules in connection with the placing of (a) equity securities or interests of a class new to listing or of a class al listed under a general or specific mandate or (b) listed equity securities or interests (if it is accompanied by a top-up subscription) to any “connected person” as defined in Chapter 14A of the Listing Rules. For example, a listed issuer may provide information to assist the syndicate members to identify the listed issuer’s connected persons.
            FAQ 077-2022, FAQ No. 14
            LR reference: Main Board Rule 3A.46 / GEM Rule 6A.48
            Released on 22/4/2022

          • Chapter 4

            View Current PDF

            Question:

            As from 1 October 2019 (“Effective Date”), the amendments to the Financial Reporting Council Ordinance (Cap. 588) (“FRCO”) took effect and the Financial Reporting Council (“FRC”) became Hong Kong’s independent regulator of listed entity auditors.

            After the Effective Date, all audit firms intending to carry out a PIE Engagement are subject to a system of registration (for Hong Kong audit firms) and recognition (for non-Hong Kong audit firms) as PIE Auditors.

            Any non-Hong Kong audit firm is required to be recognized by the FRC before the audit firm can (i) “undertake” (i.e. accept an appointment to carry out) any PIE Engagement; and (ii) carry out any PIE Engagement for an overseas entity. Under the FRCO, the Exchange needs to issue a Statement of No Objection (“SNO”) before the FRC considers an application of the overseas audit firm to be recognized as a Recognized PIE Auditor. The overseas audit firm must not accept an appointment for carrying out any PIE Engagement for an overseas entity unless the application for recognition has been granted.

            (i) Which types of engagements fall within the PIE Engagements?
            (ii) On the appointment of a non-Hong Kong audit firm for the PIE Engagement, who should submit the formal application to the FRC?

            Answer:

            (i) In relation to equity issuers and applicants, the audit engagements falling within the PIE Engagements are summarized below:
             
            Preparation of auditors’ or accountants’ report Is it a PIE Engagement?
            Annual financial statements
            Listing document
            Very substantial acquisition
            Reverse takeover
            Major transaction ×
            Very substantial disposal ×
            Extreme transaction ×
            De-SPAC transaction ×

            For those engagements not falling within the PIE Engagements, such as accountants’ reports included in major transaction and very substantial disposal circulars, the Listing Rules continue to apply after the Effective Date. Therefore, it is at the Exchange’s discretion to accept an overseas audit firm as the reporting accountant under the Listing Rules and recognition with the FRC is not required.
            (ii) The FRC considers the recognition application of a non-Hong Kong audit firm on a case-by-case basis. Therefore, the application should be submitted by the overseas entity. Please see the table below:
             
            Location of audit firm Application should be submitted by
            Overseas audit firm Overseas entity,
            together with a SNO issued by the Exchange
            Endorsed Mainland audit firm Not applicable.
            (Endorsed Mainland audit firms are recognized as a PIE Auditors without a recognition application being made to the FRC.)
            Notes:
            1. A public interest entity (PIE) is either (a) a listed corporation whose listed securities comprise at least shares or stocks; or (b) a listed collective investment scheme. Therefore, an entity with only listed debts without listed shares or stocks is not a PIE.
            2. For further details on the recognition of overseas audit firms, please refer to the FRC’s website.

            FAQ No. 059-2019
            LR reference: Main Board Rules 4.03, 19.20, 19C.16 / GEM Rules 7.02, 24.13
            Released on 06/09/2019 (Updated in January 2022)

            Question:

            The overseas equity issuer or applicant must seek a SNO from the Exchange to engage an overseas audit firm to undertake its PIE Engagements. After the SNO is obtained, that issuer or applicant can submit the recognition application to FRC.

            What are the assessment criteria to be considered by the Exchange for the issue of a SNO?

            Answer:

            SNO is granted on by a case-by-case basis.

            As set out in note 2 to Main Board Rule 4.03(1) (note 2 to GEM Rule 7.02(1)), we will issue a SNO if the overseas audit firm:

            (a) has an international name and reputation;
            (b) is a member of a recognized body of accountants; and
            (c) is subject to independent oversight by a regulatory body of a jurisdiction that is a full signatory to the IOSCO MMOU. It would be acceptable if the relevant audit oversight body is not a signatory to the IOSCO MMOU but the securities regulator in the same jurisdiction is a full signatory to the IOSCO MMOU.

            In this regard, the overseas equity issuers and applicants are reminded that they should plan their application ahead and allow sufficient time for them to seek the SNO and obtain the FRC’s approval for recognition of a Recognized PIE Auditor.

            FAQ No. 060-2019
            LR reference: Main Board Rules 4.03, 19.20, 19C.16 / GEM Rules 7.02, 24.13
            Released on 06/09/2019 (Updated in January 2022)

            Question:

            What information should be submitted to the Exchange when making an application for a SNO?

            Answer:

            The SNO application must be made in writing. Based on all relevant facts and circumstances, the overseas equity issuer or applicant should provide an explanation, that supports the SNO application, and all other relevant information that it reasonably believes should be brought to the Exchange’s attention, including but not limited to:

            (1) Details of the PIE Engagement (see FAQ No. 059-2019) and role of the overseas audit firm acting as:
            a. auditors; and/or
            b. reporting accountants.
            (2) Information of the issuer or the applicant or the business, company or companies being acquired (collectively “target” in the case of an acquisition), including its name, address, place of incorporation and nature of the business of the group/target.
            (3) Information of the overseas audit firm, including:
            a. having an international name and reputation;
            b. being a member of, or registered with, an accountancy body (please specify the name of accountancy body in the home country) that is a member of the International Federation of Accountants (IFAC) (see note 1 below); and
            c. being subject to independent oversight by a regulatory body of a jurisdiction (please specify the name of regulatory body in the home country) that is a signatory to the IOSCO MMOU (see note 2 below).
            (4) Auditing and financial reporting standards adopted in relation to the PIE Engagement.
            (5) Reasons of why an overseas audit firm is needed to undertake the PIE Engagement (see note 3 below), such as:
            a. the overseas audit firm has a geographical proximity and familiarity with the businesses of that overseas applicant or issuer or the target; and/or
            b. that overseas applicant or issuer or the target is listed on a Recognised Stock Exchange (as defined in Rule 1.01), and the overseas audit firm is the auditor of that overseas applicant or issuer or the target; and/or
            c. the overseas audit firm is the statutory auditor of that overseas applicant or issuer or the target.

            Note 1: A SNO issued by the Exchange is one of the eligibility criteria to be a Recognized PIE Auditor. There is no indication that the overseas audit firm mentioned in the SNO will be approved by the FRC, as the FRC has the following additional criteria:

            (a) the overseas audit firm is subject to the regulation of an overseas regulatory organization recognized by the FRC; and
            (b) the overseas audit firm has adequate resources and possesses the capability to carry out a PIE Engagement for the overseas entity.

            Generally, an overseas regulatory organization is recognized by the FRC, if it is a member of the International Forum of Independent Audit Regulators (IFIAR); or from a jurisdiction which has attained equivalence status granted by the European Commission under Article 46 of the Statutory Audit Directive 2006/43/EC. For details, please refer to the FRC’s website.

            Note 2: It would be acceptable if the relevant audit oversight body is not a signatory to the IOSCO MMOU but the securities regulator in the same jurisdiction is a full signatory to the IOSCO MMOU.

            Note 3: The Exchange will consider exercising its discretion not to issue a SNO if the overseas issuer or applicant fails to satisfy the Exchange of its reasons for its engagement of an overseas audit firm to undertake the PIE Engagement.

            FAQ No. 061-2019
            LR reference: Main Board Rules 4.03, 19.20, 19C.16 / GEM Rules 7.02, 24.13
            Released on 06/09/2019 (Updated in January 2022)

            Question:

            Main Board Rule 4.03 (GEM Rule 7.02) requires the reporting accountants to be normally qualified under the Professional Accountants Ordinance (Cap. 50).

            After the amendments to the FRCO became effective, is the overseas equity issuer or applicant still required to apply the waiver of Main Board Rule 4.03 (GEM Rule 7.02), in addition to seeking the SNO, when it proposes to appoint an overseas audit firm to act as a reporting accountant for its PIE Engagement?
             

            Answer:

            Yes. After the Effective Date, the overseas equity issuer or applicant is still required to apply for this waiver to the Exchange together with its SNO application.

            We will grant this waiver subject to the overseas audit firm to be recognized by the FRC. The issuer or applicant should also disclose this waiver (including details and reasons) in its circular or listing document.

            FAQ No. 063-2019
            LR reference: Main Board Rule 4.03 / GEM Rule 7.02
            Released on 06/09/2019 (Updated in January 2022)

            Question:

            Is an overseas equity issuer required to apply a “new” SNO in the following circumstances:

            (i) Annual renewal of the recognition (i.e. “same” overseas audit firm) to the FRC?
            (ii) To appoint an overseas audit firm (who is the auditors of the issuer) as its reporting accountants for a transaction circular, which falls within the PIE Engagements?
            (iii) To appoint “another” overseas audit firm as its auditors or reporting accountants for a transaction circular (which falls within the PIE Engagements)?

            Answer:

            In the circumstances described:

            (i) No. The SNO is not required when applying for renewal of the recognition to the FRC.
            (ii) No. The SNO is not required. In addition, the issuer does not have to re-apply for recognition to the FRC when the recognition of that audit firm remains valid.
            (iii) Yes. The issuer should make a fresh recognition application, together with the SNO, to the FRC.

            FAQ No. 065-2019
            LR reference: Main Board Rules 4.03, 19.20, 19C.16 / GEM Rules 7.02, 24.13
            Released on 06/09/2019 (Updated in January 2022)

            Question:

            Does an overseas equity issuer or applicant need to disclose the fact that its auditors or reporting accountants for a PIE Engagement are the Registered or Recognized PIE Auditors in the annual report, circular or listing document?

            Answer:

            Yes. It should disclose that fact.

            FAQ No. 066-2019
            LR reference: Main Board Rules 4.03, 19.20, 19C.16 / GEM Rules 7.02, 24.13
            Released on 06/09/2019 (Updated in January 2022)

            Question:

            Does an overseas equity applicant need to disclose the name of the auditors after listing in the listing document?

            Answer:

            Yes. For clarity, the overseas applicant should disclose the name of its auditors after listing at the time of the publication of the listing document.

            In case where an overseas applicant engaged a Hong Kong audit firm to act as its reporting accountant for preparing the accountants’ report in its listing document, but it intends to appoint an overseas audit firm as its auditors after listing, it should seek a SNO from the Exchange and submit a recognition application to the FRC. At the time of the publication of the listing document, if its application is under the FRC’s consideration, that fact should be disclosed.

            FAQ No. 067-2019
            LR reference: Main Board Rules 4.03, 19.20, 19C.16 / GEM Rules 7.02, 24.13
            Released on 06/09/2019 (Updated in January 2022)

            Question:

            Is an equity issuer incorporated in the PRC (“PRC issuer”) permitted to appoint an overseas audit firm as its reporting accountant for the preparation of the accountants’ report in a notifiable transaction circular relating to the acquisition of an overseas company (regardless of whether it constitutes a PIE Engagement)?

            Answer:

            Yes. The PRC issuer is permitted to appoint an overseas audit firm to carry out an engagement in relation to the acquisition of an overseas company, provided that the PRC issuer seeks a waiver from strict compliance with Main Board Rule 4.03 (GEM Rule 7.02), and obtains a SNO (in the case of PIE Engagements) from the Exchange.

            FAQ No. 076-2022
            LR reference: Main Board Rules 4.03, 19A.08 / GEM Rule 7.02
            Released on 01/01/2022

            Question:

            The relevant Rules requires, among other things, the ageing analysis be presented on the basis of the date of the relevant invoice or demand note.

            For issuers in industries that do not issue invoices to their customers, but have sales and purchase contracts with its customers which set out the agreed payment schedule, how should they present their ageing analysis of accounts receivable and accounts payable?

            Answer:

            These issuers should present the ageing analysis based on the payment schedule set out in the sales and purchase contracts.

            FAQ Series 31, FAQ No. 7
            LR reference: Main Board Rules 4.05(2)(a) and (b), Note 2 to Rule 4.05(2), paragraph 4(2)(a) and (b) of Appendix 16, Note 4.2 of Appendix 16 / GEM Rules 7.04(2)(a) and (b), Note 2 to Rule 7.04(2), Rules 18.50B(2)(a) and (b), Note to Rule 18.50B(2)
            Released on 6/2/2015 (Updated in February 2020)

            Question:

            In a VSD, Listco proposes to sell its interest in a company acquired two years ago. Can Listco include, in the circular, the company's financial information from the acquisition date?

            Answer:

            The circular should contain the company's financial information for at least three financial years.

            FAQ Series 11, FAQ No. 5
            LR reference: Main Board Rules 14.68(2)(a)(i), 4.06(1)(a) note / GEM Rules 19.68(2)(a)(i), 7.05(1)(a) note
            Released on 20/5/2010

            Question:

            Whether the Exchange will allow an applicant, including a biotech company, to adopt generally accepted accounting principles in the United States (US GAAP) in the preparation of accountants' report and subsequent financial reports after listing?

            Answer:

            Rule 4.11 requires an accountants' report in a listing document be prepared in Hong Kong Financial Reporting Standards or International Financial Reporting Standards (IFRS) for non-PRC companies.

            US GAAP is acceptable for an overseas issuer with, or seeking, a dual primary or secondary listing in the U.S. and on the Exchange (paragraph 29 of Guidance Letter HKEX-GL111-22).

            An applicant al listed in U.S. may apply for a waiver from Rule 4.11 and note 2.1 to paragraph 2 of the Appendix 16 to use US GAAP in the preparation of an accountant's report in its prospectus and the financial statements issued after listing.

            In considering whether to grant the waiver, the Exchange will take into account the following:

            (i) the applicant's place of operation is in the U.S., and whether it has been adopting US GAAP;
            (ii) whether the adoption of US GAAP enables its investors to make a more meaningful comparison of its performance with its peers;
            (iii) the comparability between US GAAP and IFRS; and
            (iv) whether there is any material difference between the financial statements prepared using US GAAP and IFRS.

            Please refer to Guidance Letter HKEX-GL102-19 for the details of the conditions, at a minimum, required by the Exchange on granting such waiver.

            Secondary listed issuers that are listed in the US and new secondary listing applications from US-listed applicants should refer to Guidance Letter HKEX-GL111-22 for the transitional arrangements on the use of US GAAP for secondary listing.

            FAQ Series N/A, FAQ No. 034-2018
            LR reference: Main Board Rules 4.10, 4.11, 19.13, 19.14, 19.25A, 19C.10D, 19C.23 / GEM Rules 7.12, 7.14, 24.18A
            Released on 24/8/2018 (Updated on 01/01/2022)

            Question:

            Where and for how long should documents on display be published online?

            How will these documents be removed from the relevant websites after the expiry of the prescribed display period?

            Answer:

            Issuers should publish documents on display on both the HKEX website (through EPS under the new headline category “Documents on Display”) and the issuer’s website.

            For documents that are published to meet transaction disclosure obligations only, issuers are required to publish them for time period prescribed by the Listing Rules (which is the same as what the Listing Rules originally require for physical display of such documents).

            For documents that are published to meet ongoing disclosure obligations (e.g. constitutional documents, audited financial information and previous transaction circulars), these should be published on a continuous basis. There is no time limit on the length of time listing documents should remain online. (Note: These documents are al published online on a continuous basis. Issuers will not have to publish them again to meet any transaction disclosure obligations as such obligations will be removed with the changes to the Listing Rules.)

            After the expiry of any relevant display period prescribed by the Listing Rules, issuers should remove the documents on display manually from the EPS themselves and can also remove them from their own website. They should not do so before the expiry of the relevant display period. The Exchange will not automatically remove documents of display from EPS after a relevant display period has expired.

            FAQ Series N/A, FAQ No. 075-2021
            LR reference: Main Board Rules 4.14, 5.01B(1)(b), 5.02B(2)(b), 14.66(10), 14.67A(2)(b)(viii), 14A.70(13), 15A.21(4), 17.02(2), 19.10(5)(e) and (6), 19A.27(4), 19A.50, 19C.10B, 29.09, 29.10, 36.08(3), Appendix 1A paragraph 53, Appendix 1B paragraph 43, Appendix 1C paragraph 54, Appendix 1D paragraph 27, Appendix 1E paragraph 76, Appendix 1F paragraph 66, Appendix 4 paragraph 9(b), Appendix 7H paragraphs 5 and 15, Appendix 24 / GEM Rules 7.18, 8.01B(1)(b), 8.02B(2)(b), 19.66(11), 19.67A(2), 20.68(13), 23.02(2), 24.09(2), (3), (5)(a),(e) and (6), 25.20(4), 25.37, 32.05(3), 35.10, 35.11, Appendix 1A paragraph 52, Appendix 1B paragraph 42, Appendix 1C paragraph 53, Appendix 4 paragraph 9, Appendix 17
            Released on 18/6/2021 (Updated on 01/01/2022)

            Question:

            (i) Given the Exchange has now updated the audit terminology in the Rules with reference to the revised HKSAs on auditor reporting, the terms “modified opinion” and “modified report” are defined in Main Board Rule 1.01/ GEM Rule 1.01. However, there is no definition of “modification” in the Rules.

            Please clarify the use of the term “modification”.
            (ii) Where the financial information has been reviewed and a review conclusion has been expressed by the auditors/ reporting accountants (e.g. FAQ 004-2017), what is meant by “modification” referred to in the Rules, interpretation and guidance issued by the Exchange?

            Please clarify the use of the term “modification” in that context.

            Answer:

            (i) “Modification” is a generic term which should be read in the context of the Rule.

            Audit engagements

            The terms “modified opinion” and “modified report” defined in Main Board Rule 1.01/ GEM Rule 1.01 relate to an accountants’ report or auditors’ report containing an audit opinion.

            Where a Rule explicitly refers to a “modified opinion”, then the term “modification” should be read in the context of that Rule and should refer to a “modified opinion”.

            The same applies when a Rule explicitly refers to a “modified report”, then the term “modification” should be read in the context of that Rule and should refer to a “modified report”.

            For reference, the table below summarises the terminologies used in the current Rules and the HKSAs:
             
              Terminology used
            Meanings Current Rules HKSAs

            Matters that affect the audit opinion:
             -  qualified opinion
             -  adverse opinion
             -  disclaimer of opinion

            Modified
            opinion
            Modified
            opinion

            Matters that affect the audit opinion:
             -  qualified opinion
             -  adverse opinion
             -  disclaimer of opinion

            AND/OR

            Matters that do not affect the audit opinion:
             -  emphasis of matter
             -  material uncertainty related to going concern

            Modified report No specific
            equivalent term
            (ii) Where the financial information has been reviewed and a review conclusion has been expressed by the auditors/ reporting accountants, then the term “modification” in the Rules and FAQs should refer to:

            Review engagements
            (a) a modified review conclusion (i.e. qualified conclusion, an adverse conclusion or a disclaimer of conclusion); and/or
            (b) an emphasis of matter paragraph or a paragraph to highlight a material uncertainty related to going concern without modifying the review conclusion.
            (Note: A review is substantially less in scope than an audit conducted in accordance with relevant HKICPA standards (or equivalent standards issued by IAASB and China Ministry of Finance). Currently, the applicable HKICPA standards for a review engagement are Hong Kong Standards on Review Engagements 2400 (Revised) and 2410.)
             

            FAQ 053-2019
            LR reference: Main Board Rules 
            1.01, 4.18, 14.68(2)(a)(i), Appendix 1A Paragraph 35, Appendix 1C Paragraph 42(2), Appendix 1E Paragraph 35, Appendix 16 Paragraphs 45(7) and 46(8)/ GEM Rules 1.017.22, 18.50(8), 18.64, 18.76, 19.68(2)(a)(i), Appendix 1A Paragraph 35, Appendix 1C Paragraph 42(2)
            Released on 1/3/2019

            Question:

            What are the disclosure requirements under Section 436 of the New Companies Ordinance for a Hong Kong incorporated issuer in relation to the publication of non-statutory accounts in its:

            (a) Annual/interim results announcement; and
            (b) interim report, quarterly results announcement / financial report, circulars or listing documents?

            Answer:

            The issuer must include a statement indicating that the statement of comprehensive income for a full financial year and/or the statement of financial position at a financial year end (the "Statements") presented in the account are not statutory financial statements under the New Companies Ordinance. The issuer must also disclose whether (i) an auditor's report had been prepared; and (ii) the auditors gave a qualified or modified audit opinion on the Statements.

            For details, please refer to Accounting Bulletin 6 "Guidance on the Requirements of Section 436 of the Hong Kong Companies Ordinance Cap.622" issued by Hong Kong Institute of Certified Public Accountants at: https://www.hkicpa.org.hk/-/media/HKICPA-Website/Members-Handbook/volumeII/ab6.pdf

            FAQ Series 31, FAQ No. 13
            LR reference: Main Board Rules 13.48, 13.49(1), 13.49(6), 14.66 to 14.69, 11.03 & 11.04, 11.16 to 11.19, 14.61 & 14.62, 4.25 to 4.29 / GEM Rules 18.49, 18.53, 18.66, 18.78, 18.79, 19.66 to 19.69, 14.03 & 14.06, 14.29 to 14.31, 19.61 & 19.62, 7.27 to 7.31
            Released on 11/9/2015 (Updated the hyperlink to Accounting Bulletin 6 in October 2019) (Updated in February 2020)

            Question:

            A listed issuer proposes to place new shares to independent third parties for cash consideration, details of which will be disclosed by way of an announcement as required under Main Board Rule 13.28 / GEM Rule 17.30.

            Where the listed issuer provides information about the impact of the proposed placing on its financial position, is it required to comply with Main Board Rule 4.29 / GEM Rule 7.31 if the announcement contains the following information?

            (a) The adjusted net asset value of the listed issuer group calculated based on the net proceeds from the proposed placing and its latest published consolidated net asset value.
            (b) A qualitative explanation of the effect of the proposed placing on its financial position (for example, the proposed placing would increase the net asset value of the listed issuer group).

            Answer:

            Main Board Rule 4.29 / GEM Rule 7.31 sets out the standards of preparation and assurance associated with any disclosure of pro forma financial information (whether mandatory or voluntary) in any documents issued by the listed issuer under the Listing Rules. This requirement would therefore apply to announcements of the listed issuer.

            In the present case, the "adjusted net asset value" described in scenario (a) is regarded as pro forma financial information subject to Main Board Rule 4.29 / GEM Rule 7.31.

            In scenario (b), while a qualitative explanation of the effect of the proposed placing on the listed issuer financial position is not subject to Main Board Rule 4.29 / GEM Rule 7.31, the listed issuer must ensure that information contained in the announcement is accurate and complete in all material respects and not misleading or deceptive under Main Board Rule 2.13 / GEM Rule 17.56.

            FAQ Series 7, FAQ No. 68
            LR reference: Main Board Rules 4.29 / GEM Rules 7.31
            Released on 28/11/2008

            Question:

            What are the accounting and auditing related requirements applicable to an overseas issuer?

            Answer:

            Qualification requirements for auditors and reporting accountants

            Where the preparation of an accountants’ report constitutes a PIE Engagement under the Financial Reporting Council Ordinance (“FRCO”), the issuer must normally appoint a firm of practising accountants that is qualified under the Professional Accountants Ordinance and is a Registered PIE Auditor under the FRCO.

            An overseas issuer is permitted to appoint an overseas audit firm as its reporting accountant for the preparation of the accountants’ report, provided that the overseas issuer seeks a waiver from strict compliance with Main Board Rule 4.03 (GEM Rule 7.02), and obtains a Statement of No Objection (“SNO”) (in case of a PIE Engagement) from the Exchange.

            An overseas audit firm is required to be recognised by the FRC before the audit firm can: (a) “undertake” (i.e. accept an appointment to carry out) any PIE Engagement; and (b) carry out any PIE Engagement for an overseas issuer. An issuer is required to apply to the Exchange for, and the Exchange is required to issue, a SNO before the FRC considers an application to recognise an overseas audit firm. The Exchange grants the SNO on a case by case basis.

            For details of the SNO application (including the auditor after listing), please refer to “Frequently asked questions on recognition of overseas audit firms in relation to the amendments to the Financial Reporting Council Ordinance – Effective on 1 October 2019” (FAQ No. 059-2019 to 067-2019).

            Preparation of reconciliation statement

            Where the Exchange allows an accountants’ report or annual financial statements to be drawn up otherwise than in conformity with HKFRS or IFRS, the accountants’ report or annual financial statements will be required to conform with financial reporting standards acceptable to the Exchange. In such cases the Exchange will normally require the accountants’ report or, as the case may be, the annual financial statements, to contain a reconciliation statement setting out the financial effect of the material differences (if any) from either HKFRS or IFRS.

            For US-listed secondary listing applicants, the requirement for the preparation of a reconciliation statement in respect of the accountants’ report prepared under US GAAP in a listing document applies to listing applications submitted on or after 1 January 2023.

            For US-listed issuers with a secondary listing on the Exchange that adopted US GAAP in the preparation of their financial statements, the requirement for the preparation of a reconciliation statement applies to the first annual financial statements for the financial year commencing on or after 1 January 2022 and subsequent interim and annual financial statements.

            For details, please refer to Section F of the Guidance Letter on the guidance for overseas issuers (HKEX-GL111-22).

            Requirement to convert to HKFRS or IFRS upon de-listing

            An overseas issuer with a dual primary or secondary listing that adopts one of the alternative overseas financial reporting standards (other than issuers incorporated in a member state of the European Union which have adopted EU-IFRS) for the preparation of its annual financial statements must adopt HKFRS or IFRS if it de-lists from the jurisdiction of that alternative overseas financial reporting standards and must do so for any annual and interim financial statements (and quarterly financial statements for GEM issuer only) that fall due under the Listing Rules, and are published, after the first anniversary of the date of its de-listing.

            FAQ Series 25, FAQ No. 20
            LR reference: Main Board Rules 4.03, 19.14, Note 4 to 19.14, 19.20, 19.25A, 19C.10D, Note 4 to 19C.10D, 19C.16, 19C.23, Note 4 to 19C.23 and Note 4 to 19.25A / GEM Rules 7.02, 7.14, Note 4 to 7.14, 24.13 and Note 4 to 24.18A
            Released on 01/01/2022

          • Chapter 5

            View Current PDF

            Question:

            How is the acquisition cost determined if an acquisition is made after the latest consolidated audited accounts?

            Answer:

            The acquisition cost should be determined based on the appropriate accounting treatment used by the acquiror in preparing the financial statements.

            FAQ Series 15, FAQ No. 2
            LR reference: Main Board Rule 5.01(1) / GEM Rule 8.01(1)
            Released on 20/10/2011

            Question:

            How should an applicant ascertain the carrying amount of a property interest?

            Answer:

            The carrying amount of a property interest must be ascertainable from the books and records of the applicant and consolidated into its balance sheet. Disclosure of a breakdown of property interests in the listing document is not required.

            The carrying amount of a property interest used to calculate the percentages under which a property valuation is not required should be the amount reported in the consolidated balance sheet of the applicant. It should not be the effective value based on the applicant's percentage holding in the subsidiary (or the entity that is consolidated into the balance sheet). For example, an 80% owned subsidiary of an applicant holds a property interest with a carrying amount of $200 million. The carrying amount of $200 million should be used instead of $160 million.

            FAQ Series 15, FAQ No. 3
            LR reference: Main Board Rule 5.01(1) / GEM Rule 8.01(1)
            Released on 20/10/2011

            Question:

            Can an applicant engage in both property activities and non-property activities?

            Answer:

            An applicant can engage in both property activities and non-property activities. An applicant should consider each property's use. If a property is for letting or sale, then it would be categorised into property activity. So even where an applicant's core business is not property development or investment, its property interest may still be categorised into property activity.

            FAQ Series 15, FAQ No. 4
            LR reference: Main Board Rule 5.01(2) / GEM Rule 8.01(2)
            Released on 20/10/2011

            Question:

            Does "holding (directly or indirectly)" means holding by the applicant or its subsidiaries, or does it also include holding by entities that the applicant has no control of, such as associated companies or jointly controlled entities?

            Answer:

            "Holding (directly or indirectly)" includes property interests that are recognised in the consolidated balance sheet of the applicant. Whether a property interest held by a jointly controlled entity is recognised in the consolidated balance sheet of the applicant depends on the accounting treatment adopted by the applicant.

            FAQ Series 15, FAQ No. 5
            LR reference: Main Board Rule 5.01(2) / GEM Rule 8.01(2)
            Released on 20/10/2011

            Question:

            Should retail outlets occupied by an applicant for its operations be categorised into a property activity or a non-property activity?

            Answer:

            Retail outlets occupied by an applicant for its operations should be categorised into non-property activity.

            FAQ Series 15, FAQ No. 6
            LR reference: Main Board Rule 5.01(2) / GEM Rule 8.01(2)
            Released on 20/10/2011

            Question:

            How should an applicant identify properties up to the 10% limit in Main Board Rule 5.01A(1)/GEM Rule 8.01A? If there are two properties with similar carrying amounts crossing the 10% limit at the same time, which property should be valued?

            Answer:

            Generally, an applicant should identify the carrying amount of each property interest and add up from the lowest values until the 10% limit is reached. Property valuations will not be required for property interests comprising the lowest 10%. Property valuations will be required for the remaining property interests. Full text of valuation reports will be required to be disclosed in the listing document except where summary disclosure is allowed (see Main Board Rule 5.01B/GEM Rule 8.01B).

            Where two properties have similar carrying amounts that would cross the 10% limit, we would leave it to the applicant and its advisers to determine taking into account the general disclosure obligation. For example, an applicant may have 15 properties representing 10.12% of its total assets. The largest and second largest of these 15 properties are a property in Mongolia representing 0.97% of its total assets and a Hong Kong property representing 0.85% of its total assets. The total amount of non-valued properties would be less than the 10% limit if either one of these two properties (each with an amount below 1% threshold) is valued.

            An applicant may value the 0.85% Hong Kong property instead of the 0.97% Mongolian property on the basis that it would be unduly burdensome.

            FAQ Series 15, FAQ No. 7
            LR reference: Main Board Rule 5.01A(1) / GEM Rule 8.01A
            Released on 20/10/2011

            Question:

            Where and for how long should documents on display be published online?

            How will these documents be removed from the relevant websites after the expiry of the prescribed display period?

            Answer:

            Issuers should publish documents on display on both the HKEX website (through EPS under the new headline category “Documents on Display”) and the issuer’s website.

            For documents that are published to meet transaction disclosure obligations only, issuers are required to publish them for time period prescribed by the Listing Rules (which is the same as what the Listing Rules originally require for physical display of such documents).

            For documents that are published to meet ongoing disclosure obligations (e.g. constitutional documents, audited financial information and previous transaction circulars), these should be published on a continuous basis. There is no time limit on the length of time listing documents should remain online. (Note: These documents are al published online on a continuous basis. Issuers will not have to publish them again to meet any transaction disclosure obligations as such obligations will be removed with the changes to the Listing Rules.)

            After the expiry of any relevant display period prescribed by the Listing Rules, issuers should remove the documents on display manually from the EPS themselves and can also remove them from their own website. They should not do so before the expiry of the relevant display period. The Exchange will not automatically remove documents of display from EPS after a relevant display period has expired.

            FAQ Series N/A, FAQ No. 075-2021
            LR reference: Main Board Rules 4.14, 5.01B(1)(b), 5.02B(2)(b), 14.66(10), 14.67A(2)(b)(viii), 14A.70(13), 15A.21(4), 17.02(2), 19.10(5)(e) and (6), 19A.27(4), 19A.50, 19C.10B, 29.09, 29.10, 36.08(3), Appendix 1A paragraph 53, Appendix 1B paragraph 43, Appendix 1C paragraph 54, Appendix 1D paragraph 27, Appendix 1E paragraph 76, Appendix 1F paragraph 66, Appendix 4 paragraph 9(b), Appendix 7H paragraphs 5 and 15, Appendix 24 / GEM Rules 7.18, 8.01B(1)(b), 8.02B(2)(b), 19.66(11), 19.67A(2), 20.68(13), 23.02(2), 24.09(2), (3), (5)(a),(e) and (6), 25.20(4), 25.37, 32.05(3), 35.10, 35.11, Appendix 1A paragraph 52, Appendix 1B paragraph 42, Appendix 1C paragraph 53, Appendix 4 paragraph 9, Appendix 17
            Released on 18/6/2021 (Updated on 01/01/2022)

            Question:

            What is the timing reference point for the statement "except for the property interests in the valuations reports, no single property interest that forms part of its non-property activities has a carrying amount of 15% or more of total assets"?

            Answer:

            The timing reference point for the statement is the listing document date.

            FAQ Series 15, FAQ No. 8
            LR reference: Main Board Rule 5.01B(b)(ii) / GEM Rule 8.01B(b)(ii)
            Released on 20/10/2011

            Question:

            Please clarify whether an issuer must comply with Main Board Rule 5.02A(e)/GEM Rule 8.02A(e) and Main Board Rule 5.02B(ii)/GEM Rule 8.02B(ii) as well as the current Rule that requires a valuation for an acquisition or disposal of a company whose assets consist solely or mainly of property and where any of the percentage ratios of the transaction is or is above 25%.

            Answer:

            The property valuation requirement is triggered when an issuer acquires or disposes of a company whose assets consist solely or mainly of property and where any of the percentage ratios of the transaction is or is above 25% under Main Board Rule 5.02/GEM Rule 8.02.

            An issuer should then identify each property interest in the company being acquired or disposed of and consider whether the carrying amount is below 1% of the issuer's total assets. Valuation is not required if a property interest 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.

            FAQ Series 15, FAQ No. 9
            LR reference: Main Board Rule 5.02 / GEM Rule 8.02
            Released on 20/10/2011

            Question:

            Please clarify how to determine when information under Main Board Rule 5.10/GEM Rule 8.36 should be disclosed.

            Answer:

            An applicant must disclose information on its material property interests. The information must be meaningful for investors to make an informed decision regarding the company. We expect applicants and sponsors to consider materiality taking into account all the relevant facts and circumstances and disclose property valuations and/or relevant information for material property interests.

            There is no definition of materiality in the Listing Rules. In considering whether a property interest is material or not, applicants and sponsors may consider:

            (a) whether the property interest (individually or in aggregate) is used for a reportable segment of the applicant. If so, whether it contributes a significant portion of revenue to the applicant;
            (b) whether there are any encumbrances on the property or use of the property that may, at any time, directly or indirectly impact the operations of the applicant's reportable segment;
            (c) whether there are any defects relating to the property or its operations that may have major impact on the applicant's business or operations, for example, breach of environmental regulations or title defects; and
            (d) whether there is re-development potential for the property that may impact the applicant's financial position.

            These factors are only for guidance and are not an exhaustive list. Applicants and sponsors should carefully consider how the information could influence investors' decision. Materiality judgement can only be properly made taking in account all the facts and circumstances of the applicant.

            FAQ Series 15, FAQ No. 10
            LR reference: Main Board Rule 5.10 / GEM Rule 8.36
            Released on 20/10/2011

            Question:

            Is an applicant/issuer only required to disclose valuation information relating to its property interests under Chapter 5 of the Main Board Rules/Chapter 8 of the GEM Rules in the listing document/circular?

            Answer:

            No. Under the general disclosure obligation in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32) and the Listing Rules (for applicant, see Main Board Rule 11.07/GEM Rule 14.08(7); for issuer, see Main Board Rule 14.63(2)(a)/GEM Rule 19.63(2)(a)), a listing document/circular must contain sufficient particulars and information necessary for an investor to make an informed decision.

            FAQ Series 15, FAQ No. 1
            LR reference: Main Board Rules Chapter 5 / GEM Rules Chapter 8
            Released on 20/10/2011 (Updated on 1/4/2015)

          • Chapter 6

            View Current PDFView Current PDF

            Question:

            The Financial Institutions (Resolution) Ordinance (Cap.628)("FIRO") vests in the three sectoral resolution authorities (being the Monetary Authority, the SFC or the Insurance Authority) with a range of powers to enable orderly resolution of a non-viable, systemically important financial institution for the purpose of maintaining financial stability, while seeking to protect public funds.

            In particular, Part 9 of the FIRO empowers a resolution authority to temporarily defer certain entities' disclosure obligations under section 307B of the SFO in certain circumstances (including that the disclosure would cause or contribute to the non-viability of the entity or its group company or impede the ability of the resolution authority to achieve orderly resolution), and in that case, the entities' disclosure obligations under the Rules will also be deferred automatically.

            Where an issuer's disclosure obligations are deferred under the FIRO, will dealings in securities of such issuer be suspended?

            Answer:

            There is no automatic suspension of dealings in securities of such issuer, but the FIRO provides that the resolution authority may direct the Exchange to suspend, or not to suspend, dealings in securities of an issuer despite its disclosure obligations have been deferred under the FIRO.

            The resolution authority must consult the SFC (if the SFC is not the resolution authority) before its exercise of any powers to defer disclosure obligations or suspend, or not suspend, dealings to enable the SFC's views to be ascertained (including e.g. on the effects of deferral, suspension or non-suspension on the market, and financial stability).

            Any decision to exercise such powers would not be taken lightly by a resolution authority given their potential risks and ramifications for the stability and effective functioning of the financial system. Ultimately, the extent to which the resolution authority would use any of these powers on failure of an institution would depend upon its assessment of the risks posed to the orderly resolution, its balancing of the resolution objectives in the context of securing its financial stability objectives as set out in the FIRO and the operational mechanics (to be developed by the resolution authorities) for the implementation of the FIRO stabilization options.

            FAQ Series N/A, FAQ No. 005-2017
            LR reference: Main Board Rule 6.01 / GEM Rule 9.01
            Released on 20/10/2017

            Question:

            Part 9 of the FIRO, as currently drafted, does not cover suspension of dealings in structured products listed under Chapter 15A of the Main Board Listing Rules that are cash settled only.

            What will happen to dealings in the cash-settled structured products of an issuer that is subject to Part 9 of the FIRO in the three scenarios below?

            (a) Prior to the application of a stabilization option under the FIRO, where the relevant issuer also has securities as defined under the FIRO (e.g. shares) listed on the Exchange;
            (b) Prior to the application of a stabilization option under the FIRO, where the relevant issuer does not have any securities as defined under the FIRO (e.g. shares) listed on the Exchange (i.e. the issuer issues cash-settled structured products only); or
            (c) When and if a "bail-in" under the FIRO is in effect.

            Answer:

            (a) Where the relevant resolution authority has served a direction under the FIRO on the Exchange to suspend, or not to suspend, the issuer's securities as defined under the FIRO (e.g. shares), the Exchange shall exercise its power under Main Board Rule 6.01 to suspend dealings, or refrain from directing a suspension of dealings, in the issuer's cash-settled structured products in the same way.
            (b) The relevant resolution authority shall inform the Exchange when the issuer's disclosure obligations have been deferred under the FIRO, and request the Exchange to suspend, or not to suspend, dealings in the issuer's cash-settled structured products.

            The Exchange shall exercise its power under Main Board Rule 6.01 to suspend dealings, or refrain from directing a suspension of dealings, upon receipt of the resolution authority's request.
            (c) The relevant resolution authority shall inform the Exchange when and if a "bail-in" under the FIRO is in effect and the issuer's disclosure obligations are suspended by force of law pursuant to section 153 of the FIRO.

            The Exchange shall exercise its power under Main Board Rule 6.01 to suspend dealings upon receipt of the notice.
            FAQ Series N/A, FAQ No. 007-2017
            LR reference: Main Board Rule 6.01
            Released on 20/10/2017

            Question:

            Has there been any change in the procedure for requesting a trading halt or suspension?

            Answer:

            The procedure for requesting a trading halt or suspension has not changed as such. As before, it will be necessary to liaise with the Listing Division of the HKEx and make a written request stating the specific reasons for requesting a trading halt or suspension. If appropriate, the Listing Division of the HKEx will arrange for trading in the issuer's securities to be halted or suspended.

            The change is with regard to the way in which the trading halt or suspension is notified to the market. Under the pre-existing procedure, a trading halt or suspension is first notified to the market by means of a short notice prepared by HKEx which is published on the HKEx website. Under the new information dissemination model, the market will be notified by means of a trading halt or suspension announcement which is prepared by the issuer and submitted through the e-Submission System for publication on the HKEx website.

            Where the announcement has al been submitted by the issuer for publication, HKEx will publish this announcement immediately via the HKEx website following a trading halt or suspension. If the issuer has not submitted the announcement for publication before the trading halt or suspension, the issuer must do so as soon as possible after the trading halt or suspension has been effected.

            The announcement must also be published on the issuer's own website (if any), but does not have to be published in the newspapers.

            FAQ Series 3, FAQ No. 139
            LR reference: Main Board Rules 6.02, 6.03 / GEM Rules 9.06, 9.07, 9.08
            Released on 22/3/2007 (Updated on 2/1/2013)

            Question:

            What is the trading halt/ suspension policy applicable to Main Board and GEM issuers in respect of publication of announcements containing inside information and/or notifiable transactions?

            Answer:

            Trading in the securities of an issuer may be halted or suspended due to publication failure (i.e. to publish an announcement on HKEx websites) where the subject matter of the announcement is information discloseable under Listing Rules MB 13.09/ GEM 17.10 or relates to a notifiable transaction and trading halt or suspension is required under Listing Rules MB 14.37/ GEM 19.37. This is consistent with the principle set out in Chapter 6 of Main Board Rules/ Chapter 9 of GEM Rules on trading halts and suspensions, i.e. that halt or suspension is only required where the HKEx considers it necessary for the protection of the investor or the maintenance of an orderly market.

            Where an obligation to issue an announcement containing inside information has arisen for an issuer, it should publish the announcement during the next available publication window. For example, where the issuer has signed an agreement in relation to a notifiable transaction that is inside information after trading hours on a normal business day, and an announcement is published on the HKEx website by 8.30 a.m. of the next business day (i.e. either during the publication windows from 4.30 p.m. to 11.00 p.m. of that business day, or between 6.00 a.m. to 8.30 a.m. of the next business day), no trading halt or suspension would be necessary. Similarly, where an agreement is signed after the morning trading session and an announcement is published on the HKEx website between 12.00 noon to 12.30 p.m. of the same business day, no trading halt or suspension is necessary. In both circumstances where an announcement cannot be published before the next trading session, a halt or suspension in the trading of the issuer's securities would be required until commencement of the trading session (morning or afternoon) after the publication of the announcement. For example, where the announcement is published during the 12.00 noon to 12.30 p.m. publication window of the next business day, the issuer may apply for resumption of trading in its securities at 1.00 p.m.

            Where an issuer's obligation to publish an announcement relating to inside information is triggered during trading hours (for example, where confidentiality cannot be maintained and an obligation to publish an announcement on inside information arises under Listing Rule MB 13.09/ GEM 17.10 or in the circumstances described in Listing Rules MB 14.37 / GEM 19.37), the issuer should request a halt or suspension in trading of its securities, and publish an announcement as soon as possible during the next publication window. Resumption in trading of the issuer's securities may take place during the commencement of the next trading session after the publication of the announcement.

            A resumption announcement should clearly set out that an application will be made for resumption in the trading of securities and the expected time of resumption (i.e. at the commencement of the next trading session after the publication of the announcement).

            Issuers are reminded of their obligations to submit an announcement for clearance by the Exchange before publication where the subject matter of the announcement requires pre-vetting under the Listing Rules. Please refer to the Guide on Pre-vetting requirements and Selection of Headline Categories for Announcements at http://www.hkex.com.hk/eng/rulesreg/listrules/listguid/listpp/eppguid/epp.htm which sets out categories of announcements requiring pre-vetting.

            Issuers are also reminded that they should manage their affairs, particularly with regard to the signing of agreements, to ensure that there will be continuous and informed trading of their securities save in exceptional circumstances. It follows that, as far as practicable, issuers should seek to ensure that complex and lengthy announcements are disseminated as soon as possible during either the lunchtime publication window or outside trading hours to allow investors adequate time to consider the content of such disclosures.

            FAQ Series 3, FAQ No. 178
            LR reference: Main Board Rules Chapter 6, 13.09, 13.10A, 14.37 / GEM Rules Chapter 9, 17.10, 17.11A, 19.37
            Released on 22/3/2007 (Updated on 25/7/2016)

            Question:

            What is the trading suspension arrangement for issuers with A shares and H shares listed on SSE / SZSE and SEHK?

            Answer:

            There will be no change in the general policy for trading suspension of A+H issuers as a result of the implementation of Shanghai and Shenzhen Connect:

            (a) Suspension arrangement
            (i) Suspension pending release of inside or material information or clarification to address false market concern

            Where an A+H issuer has any inside information1 or material information2 or where there is concern about the possible development of a false market3, the issuer's A and H shares will be suspended in both markets to prevent potential or actual market disorder.

            Note
            1: See SEHK Listing Rule 13.09
            2: See SSE listing rules 2.3 and 2.10 / SZSE listing rule 2.7
            3: See SEHK Listing Rule 13.10
            (ii) Suspension due to other reasons (i.e. other than those mentioned in (i) above)

            In other specific circumstances where trading suspension is required in one market, and not the other, under the respective home market rules, the current practice will continue to apply. They include:

            Reasons for suspension SSE / SZSE SEHK
            Non-routine suspension
            Insufficient public float Suspend after the public float falls below the minimum requirement4 for 20 consecutive days Suspend when the public float falls below the minimum requirement4 and there is a lack of open market in the listed securities
            Delay in publication of annual results Suspend when the issuer fails to publish the annual report by the deadline (which is 4 months from the year end date) Suspend when the issuer fails to publish the results announcement by the deadline (which is 3 months from the year end date)
            Failure to meet continuing listing criteria Listing may be suspended if the issuer fails to meet financial requirements after it is put under delisting risk warning:
            •   Net loss for the latest 3 consecutive years; or
            •   Net liability in the latest 2 consecutive years; or
            •   Revenue less than RMB10 million for the latest 2 consecutive years; or
            •   Auditors issued a disclaimer opinion or adverse opinion on its financial statements for the latest 2 consecutive years
            Suspend if the issuer fails to maintain sufficient assets or operations for listing
            Material asset restructuring5,7
            (a) An issuer announces that it may undertake a possible material asset restructuring
            (a) Suspend for not more than three months (unless an extension is permitted) when the possible material asset restructuring is in contemplation
            (a) No suspension where the announcement contains inside information concerning the possible material asset restructuring
            (b) The issuer convenes a board meeting and announces details of its material asset restructuring proposal
            (b) Suspend for not more than 10 days when the announcement is subject to post-vetting by SSE / SZSE
            (b) No suspension after the announcement of the proposed transaction.6
            (c) The issuer publishes an announcement upon the receipt of the CSRC's notice in relation to the vetting of the issuer's material asset restructuring proposal
            (c) Suspend during the vetting period
            (c) No suspension
            Non-public issuance of new shares7 Suspend for not more than 10 days (unless an extension is permitted) when an issuer announces that it may undertake a possible issuance of new shares No suspension where the announcement contains inside information concerning the possible issuance of new shares
            Other material matters7 Suspend for not more than 10 days when an issuer announces that it is contemplating material matters (e.g. change in control, material contract, acquisition or disposal subject to shareholder approval, external investment) No suspension where the announcement contains inside information concerning the possible material matters
            Routine suspension
            Rights issue Suspend during the acceptance period No suspension
            Delay in publication of quarterly results Suspend for 1 day if the issuer fails to publish quarterly report by the due date No suspension
            (There is no requirement under the SEHK Listing Rules for Main Board issuers to publish quarterly results.)
            Issuers under delisting risk warnings Suspend for 1 day if the issuer is put under the delisting risk warning (*ST) or other kinds of special treatment (ST) under the SSE / SZSE rules No suspension

            Note
            4: Under the SSE/SZSE listing rules, an issuer shall maintain a public of at least 25% of the total issued share capital (or 10% if the issuer's share capital exceeds RMB400 million).

            Under SEHK Listing Rules, an issuer shall maintain a public of at least 25% of the total issued share capital (or a lower percentage if wavier was previously granted by SEHK).
            5: See the "Measures for the Administration of the Material Asset Restructurings of Listed Companies" issued by the CSRC
            6: Issuers are reminded that if the proposed transaction constitutes a very substantial disposal, very substantial acquisition or reverse takeover under the SEHK Listing Rules, the issuer should submit the draft announcement for the transaction to SEHK for pre-vetting.
            7: See the "Guidelines on trading suspension and resumption for listed companies in contemplation of material matters" 《上市公司籌劃重大事項停復牌業務指引》 and the "Disclosure memorandum for Main Board no.9 - Listed companies' trading suspension and resumption" 《主板信息披露業務備忘錄第9 號——上市公司停復牌業務》 issued by SSE and SZSE respectively
            (b) Communications with exchanges

            A+H issuers are reminded that they must notify both SEHK and SSE / SZSE as soon as possible after they become aware of any matter that may require a trading suspension of their shares on SEHK and/or SSE / SZSE. The issuers should, to the extent practicable, make early contact with SEHK and SSE / SZSE to allow sufficient time for each exchange to deal with the matter before the markets open.
            (c) Disclosure in announcements

            Where trading is to be suspended in one market only (see paragraph (a)(ii) above), timely disclosure of the suspension details (including the time of suspension and the reason for the suspension) in the other market is necessary to ensure that shares in the other market can continue to be traded in an orderly manner.

            FAQ Series 29, FAQ No. 5
            LR reference: Main Board Rules Chapter 6
            Released on 14/11/2014 (Updated on 13/07/2018)

            Question:

            Once suspended, will trading resumption of an issuer's A and H shares take place at the same time?

            Answer:

            (a) Resumption arrangement
            (i) Normally, if an issuer's A and H shares are suspended due to inside or material information or false market concern, trading in the shares will resume in both markets at the same time after the issuer has published an appropriate announcement through SEHK and SSE / SZSE.
            (ii) Nevertheless, as mentioned in paragraph (a)(ii) under question 5, there may be specific circumstances where trading suspension is required in one market, and not the other, under the respective home market rules. In those circumstances, trading in the issuer's shares may resume in one market when it has satisfied the requirements of that market, but remain suspended in the other market under its rules.
            (b) Communication with exchanges

            The suspended issuer should keep both SEHK and SSE / SZSE informed of its developments and should allow sufficient time for the exchanges to decide whether and when trading can be resumed.
            (c) Disclosure in announcements

            Where trading is to be resumed in one market only (see paragraph (a)(ii) above), the issuer should publish an announcement setting out the reasons for the continued suspension of its shares in the other market.

            FAQ Series 29, FAQ No. 6
            LR reference: Main Board Rule Chapter 6
            Released on 14/11/2014 (Updated on 04/11/2016)

          • Chapter 7

            View Current PDF

            Question:

            Six months ago, Listco conducted a rights issue of one rights share for every existing share (the "Previous Rights Issue"). It now proposes another rights issue of one rights share for every two existing shares.

            Listco had obtained independent shareholders' approval for the Previous Rights Issue according to Rules 7.19A(1) and 7.27A. Does it need to seek independent shareholders' approval for the proposed rights issue?

            Answer:

            Yes. This is because the proposed rights issue would increase Listco's issued share capital by more than 50% when aggregated with the Previous Rights Issue.

            FAQ Series 20, FAQ No. 27
            LR reference: Main Board Rules 7.19A(1) / GEM Rules 10.29
            Released on 28/2/2013 (Rule references updated in July 2018)

            Question:

            Company A has 100 shares in issue, trading at HK$1.0 for the past five trading days. It proposes to issue 50 new shares at HK$0.75 through a rights issue (i.e. a 1-for-2 rights issue issued at a 25% discount to market price).

            (a)    What is the theoretical dilution effect of this rights issue?
             
            (b)    If Company A decides to issue the offer shares at a premium over the market price, what is the theoretical dilution effect of this rights issue?
             

            Answer:

            (a)    Please see Attachment.
             
            (b)    Where the offer price is at a premium over the market price, the theoretical dilution effect as computed under Rule 7.27B would produce a positive figure, i.e. there is no value dilution to non-participating shareholders.
             

            FAQ Series N/A, FAQ No. 024-2018
            LR reference: Main Board Rules 7.27B / GEM Rules 10.44A
            Released on 04/05/2018 (Updated on 03/07/2018)

            Question:

            Company B proposes a placing of convertible bonds (or warrants) under specific mandate.

            How should Company B compute the theoretical dilution effect of the proposed placing?

            Answer:

            The theoretical dilution effect of the placing of convertible bonds (or warrants) should be computed on an as-converted basis, i.e. applying the initial conversion price (or the sum of the initial placing price and the exercise price) and the corresponding number of conversion shares (or subscription shares) for the computation.

            FAQ Series N/A, FAQ No. 025-2018
            LR reference: Main Board Rules 7.27B / GEM Rules 10.44A
            Released on 04/05/2018

            Question:

            Company C conducted an open offer under the authority of an existing general mandate 6 months ago. It further proposes to conduct a specific mandate placing with theoretical dilution effect of 24%.

            (a)    Is Company C required to aggregate the previous open offer and the proposed specific mandate placing?
             
            (b)    How should Company C compute the cumulative theoretical dilution effect?
             

            Answer:

            (a)    Yes. All open offers are subject to the aggregation requirements under Rule 7.27B. This is notwithstanding the authority upon which the offer shares are issued.
             
            (b)    Please see Attachment.
             

            The cumulative value dilution can be calculated by the following formula:

            Sh = Number of issued shares immediately before the 1st offer or placing
            C1 = Number of shares to be issued in the 1st offer or placing
            C2 = Number of shares to be issued in the 2nd offer or placing
            Cn = Number of shares to be issued in the nth offer or placing
            Y1 = Price discount of the 1st offer or placing
            Y2 = Price discount of the 2nd offer or placing
            Yn = Price discount of the nth offer or placing

            FAQ Series N/A, FAQ No. 026-2018
            LR reference: Main Board Rules 7.27B / GEM Rules 10.44A
            Released on 04/05/2018 (Updated on 03/07/2018)

            Question:

            Company D conducted a rights issue that is not underwritten and the rights issue was undersubscribed.

            For the purpose of computing cumulative dilution effect for the next capital raising by Company D, should it use the maximum number of shares issuable or the actual number of shares issued under the previous rights issue?

            Answer:

            Company D should use the actual number of shares issued under the previous rights issue for the purpose of computing cumulative dilution effect.

            FAQ Series N/A, FAQ No. 027-2018
            LR reference: Main Board Rules 7.27B / GEM Rules 10.44A
            Released on 04/05/2018

            Question:

            Will there be any change in what is meant in the Rules by "fully paid" and "partly paid" shares for Hong Kong-incorporated issuers after the New Companies Ordinance becomes effective?

            Answer:

            Yes. When the New Companies Ordinance becomes effective, "fully paid" will mean that the shareholder to whom shares are issued has paid the full consideration which was agreed to be paid for those shares, i.e., the issue price (and not that the shareholder has paid the full nominal value of those shares, as is the case under the existing Companies Ordinance). "Partly paid" will mean that the full issue price has not been paid.

            FAQ Series 26, FAQ No. 7
            LR reference: Main Board Rules 7.28, 8.11, 8.13, 10.06 (1)(a)(i); App 1A (paras 15(2)(d), 23(1) and 26); App 1B (paras 22(1) and 24); App 1C (para 34); App 1E (paras 23(1), 26 and 49(2)(d)); App 1F (paras 18(1) and 20); App 2A (para 4(3)); App 5 Forms / GEM Rules 10.45, 11.25, 11.27, 13.07(1); App 1A (paras 23(1) and 26); App 1B (paras 22(1) and 24); App 1C (para 34); App 2A (para 4(3)); App 5 Forms
            Released on 21/2/2014 (Updated on 01/01/2022)

            Question:

            Are there new PRC requirements for Eligible SEHK Issuers and Other Connect Issuers to offer or distribute securities to Southbound Shareholders in the above corporate actions?

            Answer:

            (a) Rights issues and open offers

            Yes. The China Securities and Regulatory Commission (CSRC) has issued the Announcement [2016] No. 21 "Filing Requirements for Hong Kong Listed Issuers Making Rights Issues to Mainland Shareholders through Mainland-Hong Kong Stock Connect". The document sets out the requirements for Eligible SEHK Issuers and Other Connect Issuers offering securities to their Southbound Shareholders in rights issues / open offers (see also question 3 below).

            Issuers should also note that under Shanghai and Shenzhen Connect, China Securities Depository and Clearing Corporation Limited (ChinaClear) will provide nominee services for Southbound Shareholders to (i) sell their nil-paid rights on SEHK; and/or (ii) subscribe for their entitlement securities under the rights issues / open offers in accordance with relevant laws and regulations. However, it will not support excess applications by Southbound Shareholders through Shanghai and Shenzhen Connect1.

            Note 1: See Article 23 of ChinaClear's Implementing Rules for Registration, Depository and Clearing Services under Mainland-Hong Kong Stock Connect (ChinaClear Stock Connect Implementing Rules) 中國證券登記結算有限責任公司《內地與香港股票市場交易互聯互通機制登記、存管、結算業務實施細則》
            (b) Bonus issues, scrip dividend schemes and distributions in specie

            No rules or guidance has been published by the CSRC.

            FAQ Series 29, FAQ No. 2
            LR reference: Main Board Rules Chapter 7, 13.36(2)(a) Note 1
            Released on 14/11/2014 (Updated on 13/07/2018)

            Attachment

            The cumulative value dilution is calculated by reference to (i) the aggregate number of shares issued during the 12-month period, compared to the number of issued shares immediately prior to the first offer or placing; and (ii) the weighted average of the price discounts (each price discount is measured against the market price of shares at the time of the offer).

            Company A conducted the following capital raisings:

            (i)    a 1-for-2 rights issue with offer price at a price discount of 25%;
             
            (ii)    a 1-for-1 rights issue with offer price at a price discount of 40%; and
             
            (iii)    a specific mandate placing of 50% of existing issued shares at a price discount of 70%.
             
              Rights issue
            August 2018
            Rights issue
            November 2018
            Placing
            March
            2019
            Theoretical value dilution of each pre-emptive offer / placing
            No. of issued shares before capital raising A 100 150 300
            Issue size B 50% 100% 50%
            Number of offer/placing shares to be issued
            (= A x B)
            C 50 150 150
                     
            Benchmarked price X HK$1.0 HK$0.92 HK$0.73
            Price discount Y 25% 40% 70%
            Offer / placing price (= X x (1- Y)) Z HK$0.75 HK$0.55 HK$0.22
                     
            Shareholding value before rights issue / placing
            = A x X
            J HK$100.00 HK$137.50 HK$220.00
            Subscription amount
            = C x Z
            K HK$37.50 HK$82.50 HK$33.00
            No. of enlarged issued shares
            = A + C
            L 150 300 450
                     
            Theoretical ex-price
            = (J + K) / L
            TEP HK$0.92 HK$0.73 HK$0.56
            Theoretical value dilution (TD)
            = (TEP - X) / X
            TD -8.3% -20.0% -23.3%

             

             

              Rights issue
            August 2018
            Rights issue
            November 2018
            Placing
            March
            2019
            Cumulative theoretical value dilution
            Share in issue immediately before 12-month period Sh 100 100 100
            Benchmarked price immediately before 12-month period Pr HK$1.00 HK$1.00 HK$1.00
                     
            Number of offer/placing shares to be issued C 50 150 150
            Aggregated number of offer/placing shares (i.e. Sum of C) D 50 200 350
                     
            Price discount Y 25% 40% 70%
            Average price discount (i.e. weighted average of Y by reference to C) R 25% 36% 51%
                     
            Shareholding value before 1st rights issue
            = Sh x Pr
            M HK$100.00 HK$100.00 HK$100.00
            Cumulative subscription amount
            = D x [Pr x (1 - R)]
            N HK$37.50 HK$128.00 HK$171.50
            No. of enlarged issued shares L 150 300 450
                     
            Cumulative theoretical ex-price
            = (M + N) / L
            CTEP HK$0.92 HK$0.76 HK$0.60
            Cumulative theoretical value dilution
            = (CTEP - Pr) / Pr
            CTD -8.3% -24.3% -39.7%

             

             

             

            The cumulative value dilution can also be calculated by the following formula:

             

            Sh = Number of issued shares immediately before the 1st offer or placing
            C1 = Number of shares to be issued in the 1st offer or placing
            C2 = Number of shares to be issued in the 2nd offer or placing
            Cn = Number of shares to be issued in the nth offer or placing
            Y1 = Price discount of the 1st offer or placing
            Y2 = Price discount of the 2nd offer or placing
            Yn = Price discount of the nth offer or placing

          • Chapter 8

            View Current PDF

            Question:

            What are the listing requirements for HDR issuers? How do they compare with the requirements for issuers of ordinary shares?

            Answer:

            The listing requirements for HDR issuers are essentially the same as for issuers of shares, ie Chapter 8 of the Listing Rules applies to issuers of HDRs as well as to issuers of shares.

            HDR issuers have to comply with certain additional requirements set out in the new Chapter 19B of the Listing Rules. These additional requirements concern the contents of the deposit agreement and other DR-specific matters.

            FAQ Series 6, FAQ No. B2
            LR reference: Main Board Rules 8.01, 19B.01
            Released on 9/5/2008

            Question:

            Under Rule 8.05, incidental income (not arising out of the principal business) and results of associated companies should not be accounted for in arriving at the profit figure. How will the results of a jointly controlled entity which has been accounted for by the proportional consolidation method under International Auditing Standards be treated?

            Answer:

            Normally, results of jointly controlled entities will be excluded for the purposes of Rule 8.05, unless the issuer can demonstrate positive control over the entities.

            FAQ Series 1, FAQ No. 17
            LR reference: Main Board Rule 8.05
            Released on 30/3/2004

            Question:

            In the case of an H-share issuer whose domestic shares are quoted on NEEQ, will the Exchange count any domestic shares held by public shareholders as part of the issuer’s public float under Rules 8.08 and 13.32?

            Answer:

            No. In this case, only listed H-shares held by members of the public are counted towards the issuer’s public float under the Rules.

            For the avoidance of doubt, when calculating the percentage of public float, the total number of issued shares of the issuer (i.e. denominator) refers to all classes of shares in issue including H shares and domestic shares.

            FAQ Series N/A, FAQ No. 068-2019
            LR reference: Main Board Rules 8.08, 13.32 / GEM Rule 11.23(7)
            Released on 30/09/2019

            Question:

            How is the market capitalization of shares held in the hands of the public ascertained for a biotech company?

            Answer:

            A biotech company listing under Chapter 18A must meet both Rule 8.08(1) and 18A.07. For the purpose of Rule 18A.07, the applicant must ensure that it has at least HK$375 million of public float at the time of listing, which must exclude subscriptions by existing shareholders at IPO and subscriptions through cornerstone investments.

            FAQ Series N/A, FAQ No. 040-2018
            LR reference: Main Board Rules 8.08(1), 8.24, 18A.07
            Released on 24/08/2018

            Question:

            Please clarify what the issuer's total issued share capital refers to for the purpose of calculating public float under Rule 8.08(1)(b)?

            Answer:

            It refers to all classes of shares in issue including shares listed on the Exchange and other regulated exchanges and other unlisted shares.

            FAQ Series 1, FAQ No. 20
            LR reference: Main Board Rule 8.08(1)(b) / GEM Rules 11.23(7)
            Released on 30/3/2004 (Updated in February 2020)

            Question:

            What are the changes to the Main Board Listing Rules?

            Answer:

            The minimum market capitalisation at the time of listing will increase from HK$200 million to HK$500 million.

            The minimum public float value at the time of listing will increase from HK$50 million to HK$125 million.

            FAQ Series N/A, FAQ No. 010-2017
            LR reference: Main Board Rules 8.08(1)(b), 8.09(1), 8.09(2)
            Released on 15/12/2017

            Question:

            If a listed issuer has high shareholding concentration, its bonus issue of a new class of securities involving options, warrants or similar rights to subscribe or purchase shares will be subject to the minimum spread of securities holders requirement. How does the Exchange determine whether the issuer has a high shareholding concentration for this purpose?

            Answer:

            A listed issuer is considered to have high shareholding concentration if it has published relevant announcements pursuant to Main Board Rule 13.34(a) (GEM Rule 17.36), or SFC has published relevant press releases on the issuer, during the five year period immediately preceding the date of the issuer’s announcement on the proposed bonus issue.

            FAQ Series 8, FAQ No. 15
            LR reference: Main Board Rules 8.08(2), 8.08(3) / GEM Rules 11.23(3)(b)(ii), 11.23(8)
            Released on 28/11/2008 (Updated in February 2020)

            Question:

            How should a transfer applicant demonstrate compliance with the minimum market capitalisation requirement under Rule 8.09(2) or paragraph 7(1)(a) of Appendix 28 to Main Board Rules (“MB Mkt Cap Requirement”)?

            Answer:

            Market capitalisation should be calculated using the share price on the date of listing on the Main Board.

            In practice, the Exchange assess whether the applicant will be able to meet the MB Mkt Cap Requirement based on the closing share price on the trading day immediately before the first day of the proposed transfer (i.e. Main Board listing). The Exchange will also examine the applicant’s share price movement during the trading record period, and if the applicant had not been able to meet the MB Mkt Cap Requirement for a prolonged period of time, the Exchange will closely monitor the applicant’s share price movement and critically examine any unusual increase, especially when close to the day of transfer. The Exchange may not approve the transfer application until the applicant and its sponsor provide reasonable and satisfactory explanation on the unusual share price movement. Further, if the applicant’s share price and/ or trading volume had been volatile, the Exchange will require the applicant to make relevant prominent disclosure in the transfer announcement/ listing document.

            FAQ Series 5, FAQ No. 21
            LR reference: Main Board Rule 9A.02(1), 8.09(2), paragraph 7(1)(a) of Appendix 28
            Released on 2/5/2008 (Updated in February 2020)

            Question:

            Will there be any change in what is meant in the Rules by "fully paid" and "partly paid" shares for Hong Kong-incorporated issuers after the New Companies Ordinance becomes effective?

            Answer:

            Yes. When the New Companies Ordinance becomes effective, "fully paid" will mean that the shareholder to whom shares are issued has paid the full consideration which was agreed to be paid for those shares, i.e., the issue price (and not that the shareholder has paid the full nominal value of those shares, as is the case under the existing Companies Ordinance). "Partly paid" will mean that the full issue price has not been paid.

            FAQ Series 26, FAQ No. 7
            LR reference: Main Board Rules 7.28, 8.11, 8.13, 10.06 (1)(a)(i); App 1A (paras 15(2)(d), 23(1) and 26); App 1B (paras 22(1) and 24); App 1C (para 34); App 1E (paras 23(1), 26 and 49(2)(d)); App 1F (paras 18(1) and 20); App 2A (para 4(3)); App 5 Forms / GEM Rules 10.45, 11.25, 11.27, 13.07(1); App 1A (paras 23(1) and 26); App 1B (paras 22(1) and 24); App 1C (para 34); App 2A (para 4(3)); App 5 Forms
            Released on 21/2/2014 (Updated on 01/01/2022)

            Question:

            Listco has appointed Trustee A the trustee of its employee share scheme established for a wide scope of participants including Listco's directors and certain employees who are not connected persons. Since the interests of Listco's directors in the scheme are together less than 30%, Trustee A is not an "associate" of the directors under Rule 14A.12(1)(b) and therefore not a connected person of Listco.

            (a)    Is Trustee A a "close associate" of the directors under Rule 1.01?
            (b)    Will the shares held by Company A on behalf of the beneficiaries of the scheme be regarded as being "in public hands"?
            (c)    Trustee A, acting as the trustee of the scheme, holds more than 10% of Listco's total issued shares. Under the scheme, it is not allowed to exercise the voting rights attaching to shares. Is Trustee A a substantial shareholder of Listco?

            Answer:

            (a)    Yes. The exclusion for the definition of "associate" under Rule 14A.12(1)(b) does not apply to the definition of "close associate" under Rule 1.01.
            (b)    No, because Trustee A is a close associate of Listco's directors and therefore a core connected person for the purpose of Rule 8.24.
            (c)    No. Trustee A does not fall under the definition of "substantial shareholder" under Rule 1.01.

            FAQ Series 28, FAQ No. 4A
            LR reference: Main Board Rule 1.01, 8.24, 14A.12(1)(b) / GEM Rules 1.01, 11.23(11) Notes 2 and 3, 20.10(1)(b)
            Released on 1/7/2014

            Question:

            Are all overseas issuers, regardless of their place of incorporation and/ or place of central management and control (if different), eligible to apply for a primary listing, a dual primary listing or a secondary listing on the Exchange?

            Answer:

            The Listing Rules require that each of the statutory securities regulator of an overseas issuer’s jurisdiction of incorporation and the statutory securities regulator of the place of central management and control must be a full signatory to the IOSCO Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information.

            An issuer must also demonstrate how the domestic laws, rules and regulations to which it is subject and its constitutional documents, in combination, provide the protection set out in the Core Standards.

            FAQ Series 25, FAQ No. 7
            LR reference: Main Board Rules 8.02A and Appendix 3/ GEM Rules 11.05A and Appendix 3
            Released on 01/01/2022

          • Chapter 8A

            View Current PDF

            Question:

            What information is required for an applicant to demonstrate it is innovative under Guidance Letter HKEX-GL93-181 ("GL93-18") (or as the case may be, Guidance Letter HKEX-GL94-18 2 (“GL94-18”)) and suitable to list with a WVR structure?

            Answer:

            To establish whether an applicant is "innovative" for the purpose of Chapter 8A, the Exchange will take into consideration the characteristics set out in paragraph 4.2 of GL93-18 (or as the case may be, paragraph 3.2 of GL94-18). An innovative company would normally be expected to possess more than one of the characteristics set out in paragraph 4.2 of GL93-18 (or as the case may be, paragraph 3.2 of GL94-18).

            In relation to the characteristic in paragraph 4.2(a) of GL93-18 (or as the case may be, paragraph 3.2(a) of GL94-18), an applicant should elaborate on how its operations differ from conventional methods of operating a business in its industry which sets it apart from peers. If the applicant's peers are employing similar technology/business model, the Exchange will take into account whether the applicant was the "first mover" in the industry by reference to the timeline of the implementation of its technology, innovation and/or business model compared to its closest peers.

            In relation to the characteristic in paragraph 4.2(b) of GL93-18 (or as the case may be, paragraph 3.2(b) of GL94-18), the applicant should, in addition to providing the amount of its research and development (R&D) expenses during the track record period (both as a figure and as a percentage of revenue/total expenses), also explain how the R&D contributes value to the applicant. In this connection, the Exchange will examine whether the R&D expenses are capitalised as intangible assets in the accounts of the applicant as an indicator of the value generated through the R&D activities. Where a significant portion of the R&D expenses are not capitalised, the applicant should provide the reasons for this.

            In relation to the characteristic in paragraph 4.2(c) of GL93-18 (or as the case may be, paragraph 3.2(c) of GL94-18), providing a list of patents and trademarks alone is not sufficient to demonstrate this characteristic. The applicant should provide detailed explanation on how its intellectual properties enabled it to achieve business success.

            In providing this information, the applicant should avoid jargons, use plain language and provide graphical illustrations where this aids understanding.

            Where appropriate, the relevant details and explanations should be included in the prospectus.

            Notes:

            1    GL93-18 provides guidance to an applicant on some of the factors that the Exchange will take into account when considering whether an applicant is suitable for listing with a WVR structure that is required to comply with the safeguards of Chapter 8A. For the avoidance of doubt, GL93-18 applies to Non-Grandfathered Greater China Issuers with a WVR structure applying for a secondary listing under Chapter 19C (or a dual primary listing under Chapter 19) because they are required to comply with the WVR safeguards of Chapter 8A.
            2    For Grandfathered Greater China Issuers or Non-Greater China Issuers with a WVR structure applying for a dual primary listing under Chapter 19 or a secondary listing under Chapter 19C, they shall refer to GL94-18 for guidance on some the factors that the Exchange will take into account when considering whether it is suitable for listing.

            FAQ Series N/A, FAQ No. 030-2018
            LR reference: Main Board Rules 8A.04
            Released on 24/8/2018 (Updated on 01/01/2022)

            Question:

            What information is required for a WVR beneficiary demonstrate that they have been materially responsible for the growth of an applicant's business?

            Answer:

            Paragraph 4.4 of GL93-18 requires the applicant to demonstrate that each WVR beneficiary has been materially responsible for the growth of the business. It is therefore not sufficient for the applicant to simply state the identity of the proposed WVR beneficiary and that the WVR beneficiaries would be directors of the applicant. The applicant should clearly disclose the role of each proposed WVR beneficiary in the applicant and how the knowledge and skills of each proposed WVR beneficiary contributed to the business growth of the applicant.

            FAQ Series N/A, FAQ No. 031-2018
            LR reference: Main Board Rules 8A.11
            Released on 24/8/2018

            Question:

            Whether the Exchange will accept a corporate WVR holder?

            Answer:

            Following a public consultation on Corporate WVR Beneficiaries, the Exchange concluded that it would treat Greater China Issuers that were (a) controlled by corporate WVR beneficiaries (as at 30 October 2020) and (b) primary listed on a Qualifying Exchange (on or before 30 October 2020) in the same manner as Grandfathered Greater China Issuers. Grandfathered Greater China Issuers applying for a dual primary listing under Chapter 19 or a secondary listing under Chapter 19C may retain their existing corporate WVR structure by virtue of the special concession. For details, please refer to HKEX-GL94-18.

            Save for the above, the Exchange will not accept other applicants with a corporate WVR structure.

            FAQ Series N/A, FAQ No. 032-2018
            LR reference: Main Board Rules 8A.11, 8A.17, 8A.18, 8A.19
            Released on 24/8/2018 (Updated on 01/01/2022)

            Question:

            The new requirement to establish a nomination committee chaired by the chairman of the board or an INED and comprising a majority of INEDs becomes effective from 1 January 2022. What happens if an issuer fails to meet any of the requirements set out in the Rule on 1 January 2022?

            Answer:

            If the issuer fails to set up a nomination committee or has failed to meet any of the other requirements in the Rule on 1 January 2022, it must set up a nomination committee and/or appoint appropriate members to the nomination committee to meet the requirement(s) within three months.

            From 1 April 2022, if the issuer fails to set up a nomination committee or at any time has failed to meet any of the other requirements in the Rule, it must immediately publish an announcement containing the relevant details and reasons. The issuer must set up a nomination committee and/or appoint appropriate members to the nomination committee to meet the requirement(s) within three months after failing to meet such requirement(s) (“Arrangement”). This is in line with the practice regarding the audit committee and remuneration committee. The issuer may select the current headline category “Miscellaneous – Other – Corporate Governance Related Matter” when submitting the announcement for publication on the HKEXnews website.

            The Arrangement would also apply to issuers with a WVR structure in respect of the requirements relating to the establishment and composition of the nomination committee under Rules 8A.27 and 8A.28.

            FAQ Series 17, FAQ No. 12B
            LR reference: Main Board Rules 3.27A, 8A.27 and 8A.28 / GEM Rules 5.36A
            Released on 01/01/2022

            Question:

            Can an overseas issuer with a weighted voting rights structure seek a primary listing, a dual primary listing or a secondary listing on the Exchange?

            Answer:

            Yes. Refer to Appendix IV (click here) for a summary of the eligibility requirements for a Main Board overseas issuer seeking a primary listing, a dual primary listing or a secondary listing with (and without) a weighted voting rights structure on the Exchange.

            FAQ Series 25, FAQ No. 13
            LR reference: Main Board Rule Chapter 8A
            Released on 01/01/2022

          • Chapter 9

            View Current PDF

            Question:

            How long would it take to effect a HDR listing in Hong Kong?

            Answer:

            The procedures for applications for listing are set out in Chapter 9 of the Listing Rules. The Listing Rules apply as much to HDR issuers as they do to issuers of shares. Consequently, the time taken to effect a listing of HDRs should be similar to that taken to effect a listing of shares.

            Any specific questions such as those concerning the issuer's place of incorporation or specific waivers may be dealt with by way of a preliminary hearing prior to filing of a Form A1.

            FAQ Series 6, FAQ No. B7
            LR reference: Main Board Rules 9.03
            Released on 9/5/2008 (Updated on 3/9/2013)

            Question:

            A new applicant intends to effect electronic transfer to the Exchange’s designated bank account for payment of the initial listing fee.

            (i) Where can it obtain information for effecting such electronic transfer?
            (ii) In the event that the Exchange returns the listing application before it issues its first comment letter to the sponsor, does the new applicant need to separately apply for a refund of the amount electronically transferred?

            Answer:

            (i) The new applicant may refer to the relevant information set out in Guidance Letter HKEX-GL55-13 (under item 5 of Attachment I) or Guidance Letter HKEX-GL79-14 (under item 5 of Attachment 1) (as the case may be) for effecting electronic transfer to the Exchange’s designated bank account for payment of the initial listing fee.
            (ii) No, in the situation described, the new applicant needs not separately apply for a refund of the initial listing fee. In its letter to the sponsor setting out its decision to return the listing application, the Exchange will notify the sponsor that the initial listing fee previously transferred to its designated bank account will be refunded and, where applicable, require the sponsor to provide the information required for effecting the refund.

            FAQ Series 2, FAQ No. 4
            LR reference: Main Board Rules 9.03(1)(b), Appendix 5 (Form A1 and Form A2) / GEM Rules 12.14(4), Appendix 5 (Paragraph 19 of Form A, paragraph 15 of Form B and paragraph 12 of Form C)
            Released on 6/6/2006 (Updated on 4/8/2022)

            Question:

            What are the "other relevant documents"/ "other documents" referred to in the Listing Rules that should be submitted and included in the CD-ROMs at the same time of filing a listing application?

            Answer:

            They are documents referred in items 3 to 7 of Attachment and items 3 to 14 of Attachment II in Guidance Letter HKEx-GL55-13, where applicable.

            FAQ Series 24, FAQ No. 2
            LR reference: Main Board Rules 9.03(3), 9.11(1), Guidance Letter HKEx-GL55-13 / GEM Rules 12.09(1), 12.22(1), Guidance Letter HKEx-GL55-13
            Released on 26/7/2013 (Updated on 13/07/2018)

            Question:

            For Returned Applications, when will the eight weeks moratorium start?

            Answer:

            The eight weeks moratorium starts from the date of the return letter.

            FAQ Series 24, FAQ No. 13
            LR reference: Main Board Rules 9.03(3) / GEM Rules 12.09(3)
            Released on 26/7/2013

            Question:

            If there are complaints/ allegations in media reports made against an applicant after its Application Proof/ PHIP is published on the Exchange's website, can the applicant respond to the complaints/ allegations?

            Answer:

            An applicant at its own discretion may publish a statement on the Exchange's website stating that no reliance should be placed on any media reports relating to its published Application Proof/ PHIP as permitted under the Listing Rules. This statement does not need to be vetted by the Exchange before they are published but a copy should be submitted to the Exchange before its publication

            A template of the statement has been included in Guidance Letter HKEx-GL57-13. However, other statements that do not comply with the Listing Rules will require the Exchange's approval before its publication.

            FAQ Series 24, FAQ No. 7
            LR reference: Main Board Rules 9.08(2), Guidance Letter HKEx-GL57-13 / GEM Rules 12.10(2), Guidance Letter HKEx-GL57-13
            Released on 26/7/2013 (Updated on 13/07/2018)

            Question:

            When does a new applicant need to publish an OC Announcement (as defined in Rule 1.01 (GEM Rule 1.01)) and what is the content requirement of such announcement?

            Answer:

            The requirement to publish an OC Announcement only applies to a placing involving bookbuilding activities in connection with a New Listing (Refer to Rule 3A.32(1)(a)(i) (GEM Rule 6A.39(1)(a)(i)).

            Publication of an OC Announcement is required:

            (i) on the same date as the new applicant files the listing application (Note) and publishes the Application Proof (or in the case of a listing of interests in a REIT, on the same date as it files an authorisation application with the Commission and publishes the Application Proof) (“Submission of the Application”).

            A new applicant that is allowed to make a confidential filing under the Listing Rules is required to publish an OC Announcement on the same date as it publishes its PHIP instead. For the avoidance of doubt, the OC Announcement shall be published immediately after and on the same date as the publication of the Application Proof (or PHIP, where applicable). Such OC Announcement shall set out the name(s) of all overall coordinator(s) appointed by the new applicant as at the date of the announcement;
            (ii) each time an additional overall coordinator is appointed after the Submission of the Application. In such a case, the OC Announcement shall be published as soon as practicable after the appointment is made and in any event no later than the first business day after the date of the appointment (which appointment shall be no later than the 14th day after the date of Submission of the Application). Each OC Announcement shall disclose the appointment and set out the name(s) of all overall coordinator(s) appointed by the new applicant as at the date of the announcement; and
            (iii) each time the appointment of an overall coordinator is terminated after the Submission of the Application (or after the publication of the first OC Announcement for applicants allowed to make a confidential filing). In such circumstances, the OC Announcement shall be published as soon as practicable after the termination takes place, and is expected to be published no later than the first business day after the date of the termination of the appointment. Each such OC Announcement shall disclose the termination and set out the name(s) of all overall coordinator(s) that remain appointed by the new applicant as at the date of the announcement.

            For the purpose of publication on the Exchange’s website, an OC Announcement must, among other things, be accompanied by appropriate disclaimer and warning statements and not contain any information regarding the proposed offering or other information that would result in it being deemed as (i) a prospectus under section 2(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance as amended from time to time (Cap. 32) (“CWUMPO”); (ii) an advertisement under section 38B(1) of the CWUMPO; or (iii) an invitation to the public in breach of section 103(1) of the SFO, as stipulated under paragraphs 4(d) and 5A of Practice Note 22 (paragraphs 3(d) and 4A of Practice Note 5 of the GEM Rules).

            Also, for the avoidance of doubt, while intermediaries appointed may be awarded titles such as “global coordinator”, “bookrunner”, “lead manager”, etc., if they fall within the definition of “overall coordinators” under the Rule Amendments by virtue of the activities they conduct or are engaged to conduct, each OC Announcement shall clearly identify them as “overall coordinators”, in addition to any other titles of these intermediaries which the new applicant may intend to disclose in the OC Announcement.

            Note: This includes a re-filing of a listing application.

            FAQ 077-2022, FAQ No. 15
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41(2), 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46(2),12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            What should a new applicant do if it failed to publish an OC Announcement at the prescribed timing under the Listing Rules?

            Answer:

            The new applicant shall publish the OC Announcement as soon as practicable and clearly state the following in the announcement:

            (i) when the OC Announcement should have been published under the Listing Rules;
            (ii) the reasons for the delay in publication;
            (iii) and that the Exchange may take action in respect of the new applicant’s listing application on the breach of the relevant Listing Rule.

            FAQ 077-2022, FAQ No. 16
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41(2), 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46(2), 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            Does a new applicant need to publish an OC Announcement on an appointment or termination of an overall coordinator that takes place before the submission of its listing application?

            Answer:

            No, the obligation to publish an OC Announcement arises only when a new applicant submits a listing application. See FAQ No. 15.

            However, the new applicant is required to notify the Exchange in writing, as soon as practicable, of a termination of an overall coordinator that takes place before the submission of the listing application, and provide the information required under Rule 3A.41(1) (GEM Rule 6A.46(1)) to the Exchange.

            Note: A new applicant that is allowed to make a confidential filing under the Listing Rules is not required to publish the first OC Announcement on the same date as it files the listing application and publishes the Application Proof. Instead, such new applicant shall publish its first OC Announcement on the same date as it publishes its PHIP.

            FAQ 077-2022, FAQ No. 17
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41, 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46, 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            Does a listed issuer need to publish an OC Announcement on an appointment or termination of an overall coordinator in relation to the placings other than in connection with a New Listing?

            Answer:

            No, the requirement for publication of an OC Announcement only applies to a new applicant effecting a placing involving bookbuilding activities in connection with a New Listing and does not apply to an offering by a listed issuer under Rule 3A.32(1)(a)(ii) or 3A.32(1)(b) (GEM Rule 6A.39(1)(a)(ii) or 6A.39(1)(b)).

            However, in an offering by a listed issuer under Rule 3A.32(1)(a)(ii) or 3A.32(1)(b) (GEM Rule 6A.39(1)(a)(ii) or 6A.39(1)(b)), it is required to notify the Exchange of the termination of an overall coordinator in writing as soon as practicable under Rule 3A.41(1) (GEM Rule 6A.46(1)).

            FAQ 077-2022, FAQ No. 18
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41, 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46, 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            (i) Where will OC Announcements be posted?
            (ii) Do OC Announcements need to be pre-vetted by the Exchange prior to publication?
            (iii) What are the publication requirements for OC Announcements?

            Answer:

            (i) OC Announcements will be posted on the “New Listings” page of the HKEXnews website.
            (ii) No
            (iii) As in the case of publication of Application Proofs and PHIPs, a new applicant shall submit the OC Announcement through HKEx-ESS for publication on the Exchange’s website, and is not required to publish the OC Announcement on its own website.
            FAQ 077-2022, FAQ No. 19
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41, 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46, 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            A new applicant has submitted a listing application before the Effective Date, which remains valid as at the Effective Date. If the new applicant appoints or terminates the engagement of an overall coordinator after the Effective Date, does it need to publish an OC Announcement?

            Answer:

            In the scenario described, the new applicant will not be required to publish an OC Announcement on the appointment or termination of the engagement of an overall coordinator that takes place after the Effective Date, as the Rule Amendments are not applicable to listing applications submitted prior to the Effective Date. For example, if a new applicant submits a listing application 1 week before the Effective Date, it will not be required to publish an OC Announcement in respect of the appointment of an overall coordinator during the 2-week period following the submission date of the listing application (even if such appointment takes place in the first week following the Effective Date).

            In the event the new applicant re-files a listing application on or after the Effective Date, it will need to comply with the applicable Rule Amendments, including those in relation to the publication of OC Announcements.

            FAQ 077-2022, FAQ No. 22
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41(2), 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46(2), 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            What are the facilitative measures for GEM transfer applicants after the removal of the GEM streamlined process?

            Answer:

            Facilitative measures are as follows:

            (a) Dispensation from the following requirements for GEM transfer applicants which follow Chapter 9 application procedures (see new Main Board Rule 9A.03(1A) and Main Board Rule 9A.03(1B)):
             
            - Main Board Rule 9.11(17a): production of certificate of incorporation;
            - Main Board Rule 9.11(30): production of a HKSCC notice that the securities to be listed are Eligible Securities; and
            - Main Board Rule 12.01B: publication of Post Hearing Information Pack requirement.
            (b) Dispensation from the post-IPO lock-up on controlling shareholders requirement is maintained (Main Board Rule 10.07(4)), provided that any plan by the controlling shareholders of the issuer to dispose of their interests in the issuer in the next 12 months has been prominently disclosed in the listing document.
            (c) Dispensation from the restriction on post-listing fund-raising is maintained (Main Board Rule 10.08(5)), provided that any plan to raise funds within six months from the date of the transfer of the issuer's listing to the Main Board has been prominently disclosed in the listing document.
            (d) Dispensation from the compliance adviser requirement under Main Board Rule 3A.19 is maintained (Main Board Rule 9A.13 and new Main Board Appendix 28, paragraph 16).
            (e) The GEM delisting procedures under Chapter 9 of the GEM Rules do not apply to GEM transfer applications.

            FAQ Series N/A, FAQ No. 018-2017
            LR reference: Main Board Rules 3A.19, 9.11(17a), 9.11(30), 9A.13, 10.07(4), 12.01B / GEM Rule 9.20
            Released on 15/12/2017

            Question:

            Is it permissible under the Rule Amendments for the fixed fees specified in the written engagement of a CMI (including an overall coordinator) to be subsequently amended, for example by way of a supplemental agreement? Are these changes required to be notified to the Exchange?

            Answer:

            Where any change proposed to the original fee structure may potentially result in the contravention of the Listing Rules / the Code of Conduct, regulators shall be consulted as early as possible and before the changes are made.

            Where there is any material change to previously submitted information on fee arrangements of syndicate CMIs (including overall coordinators), including the following, the Exchange should also be notified and be provided with the updated information and the reasons for such change as soon as practicable under Rule 9.11A (GEM Rule 12.26AA):

            the aggregate of the fees and the ratio of fixed and discretionary fees paid or payable to all syndicate members required to be included in the Application Proof submitted for vetting purposes under paragraph 3B of Appendix 1A/1E to the Rules (paragraph 3B of Appendix 1A to the GEM Rules), in cases where the relevant fees have al been determined (see Note 8 to HKEX-GL56-13). See also FAQ No. 11A; and
            information including, among others, the allocation of the fixed portion of the fees paid by the issuer to each overall coordinator and the ratio of fixed and discretionary fees to be paid to all syndicate CMIs required to be submitted by no later than four clear business days prior to the Listing Committee hearing under Rule 9.11(23a) (GEM Rule 12.23AA). See also FAQ No. 10G.

            In addition, regulators may request supporting documents at any time during the listing application process in order to assess whether the fee arrangement of any syndicate CMI or any change to the terms of its engagement complies with the applicable Rule / Code of Conduct requirements.

            Where the regulators become aware that a material change has been made to the fee arrangement, the regulators will assess such change on a case-by-case basis having regard to the scale of, and the reasons for, the change. Depending on the circumstances of the case, the regulators might make enquiries to assess whether the original incentive arrangements for the CMIs involved have been fundamentally changed (e.g. the fixed fee entitlement to some existing overall coordinators is reduced significantly to the effect that a significant percentage of the fee pool is now allocated to a few CMIs appointed at a very late stage) and hence whether such change should be treated as constituting a new engagement. Examples of situations where subsequent material adjustments to fees may be regarded as justifiable include (a) resignation of an overall coordinator which necessitates a re-allocation of fees and (b) a significant reduction in offer size, which results in a commercial negotiation of revised fee arrangements.

            Overall coordinators should document in writing the reasons for any changes to the fee arrangements in their internal records.

            FAQ 077-2022, FAQ No. 10C
            LR reference: Main Board Rules 3A.34, 3A.36, 9.11(23a) (Note 2), 9.11A, paragraph 3B of Part A of Appendix 1, paragraph 3B of Part E of Appendix 1 / GEM Rules 6A.41, 6A.43, 12.23AA (Note 2), 12.26AA, paragraph 3B of Part A of Appendix 1
            Released on 4/8/2022

            Question:

            How should the information required to be submitted to the Exchange under Rule 9.11(23a)(b), (c) and (d) (GEM Rule 12.23AA(b), (c) and (d)) be presented?

            Answer:

            Rule 9.11(23a)(b) (GEM Rule 12.23AA(b))

            Rule 9.11(23a)(b) (GEM Rule 12.23AA(b)) requiring a confirmation of the “fixed fees to be paid by the issuer to each overall coordinator” does not prescribe the form in which the fixed fee information should be presented. The Exchange would expect this to include (i) the fees to which each overall coordinator is entitled as a percentage of the Total Fees (Note 1) and (ii) the fixed fees as a percentage of the offer size for all overall coordinators (which is consistent with the presentation of the Total Fees as a percentage of the gross proceeds to be raised from the New Listing in respect of both the public subscription and the placing tranches as required under Rule 9.11(23a)(c) (GEM Rule 12.23AA(c))).

            Rule 9.11(23a)(c) (GEM Rule 12.23AA(c))

            Rule 9.11(23a)(c) (GEM Rule 12.23AA(c)) requires the Total Fees (as a percentage of the gross proceeds to be raised from the New Listing) in respect of both the public subscription and the placing tranches to be paid to all syndicate CMIs. The Exchange would expect this to include both (a) the percentage calculated on the basis that the over-allotment option (if any) is not exercised; and (b) the percentage calculated on the basis that the over-allotment option (if any) is exercised in full (Note 1).

            Rule 9.11(23a)(d) (GEM Rule 12.23AA(d))

            Rule 9.11(23a)(d) (GEM Rule 12.23AA(d)) requires the ratio of fixed and discretionary fees to be paid to all syndicate CMIs for both the public subscription and the placing tranches (in percentage terms). The Exchange would expect this to include:

            (a) the total fixed fees (as a percentage (Note 2) of the Total Fees) paid or to be paid to all syndicate CMIs for both the public subscription and the placing tranches (Notes 1 and 3); and
            (b) the total discretionary fees (as a percentage (Note 2) of the Total Fees) paid or to be paid to all syndicate CMIs for both the public subscription and the placing tranches (Notes 1 and 4).

            Notes:

            1. If any information required to be submitted under Rule 9.11(23a) (GEM Rule 12.23AA) is calculated and/or presented on the basis that the discretionary fees (if any) will be fully paid, such basis should be clearly stated in the submission.
            2. Both (a) the percentage calculated on the basis that the over-allotment option (if any) is not exercised; and (b) the percentage calculated on the basis that the over-allotment option (if any) is exercised in full shall be submitted.
            3. The fixed fee percentages shall be expressed in compliance with FAQ Nos. 10 and 10A above.
            4. For the avoidance of doubt, the payment of discretionary fees (if any) to any syndicate member is at the absolute discretion of the issuer and therefore it would be acceptable for the discretionary fee percentages to be subject to language such as "up to” or “no less than” a particular percentage.

            FAQ 077-2022, FAQ No. 10G
            LR reference: Main Board Rule 9.11(23a) / GEM Rule 12.23AA

            Released on 4/8/2022

            Question:

            Under the Rule Amendments, the fixed fees payable to syndicate CMIs shall be determined at the time of their respective appointments by the issuer. What is the position on discretionary fees payable to syndicate CMIs? When is the latest time by which the total discretionary fees which may be paid to syndicate CMIs and the allocation of discretionary fees to each syndicate CMI (including an overall coordinator), if any, must be determined by the issuer?

            Answer:

            Total discretionary fees to syndicate CMIs:

            At the time of engagement of the first syndicate CMI, an issuer should consider the total amount of discretionary fees that it might, at its discretion, pay to syndicate CMIs, for the purpose of arriving at the Total Fees to be paid to syndicate CMIs in the determination of the fixed fee percentage of each syndicate CMI to be specified in its written engagement. See also FAQ No. 10.

            Allocation of discretionary fees to each syndicate CMI:

            A new applicant is required to have determined the allocation of discretionary fees to each syndicate CMI (including each overall coordinator) by the time it submits its Issuer’s Declaration (Form F in Appendix 5 (Form E in Appendix 5 to GEM Rules)), that is after the issue of the listing document but in any event before the grant of the final listing approval. Specifically, the Issuer’s Declaration includes a confirmation that, among other things, the following has been determined and communicated in writing to each syndicate CMI at the time of the declaration:

            (i) the allocation of discretionary fees, that is, the absolute amount to be paid, to each syndicate CMI (Note 1); and
            (ii) the time schedule for the payment (Note 1) of the Total Fees (see Note 1 to FAQ No. 10) payable to each syndicate CMI has been determined (Note 2).

            For the avoidance of doubt, information on the discretionary fee which may be payable to each overall coordinator / other syndicate CMI is not required to be submitted at least 4 clear business days before the expected hearing date under Rule 9.11(23a) (GEM Rule 12.23AA). See also FAQ 10G.

            Notes:

            1. The issuer may not make payment of any portion of the Total Fees subject to a condition to be satisfied following listing. The exception to this is fees in relation to the New Listing of a SPAC if, in accordance with a common market practice, the syndicate members are to be paid a portion of their fees at the time of the New Listing of the SPAC, and the remaining portion is to be paid on a deferred basis only following successful de-SPAC. For the avoidance of doubt, the Rule Amendments are not applicable to the fees that are payable to a SPAC promoter for its services in relation to the New Listing of the SPAC or the de-SPAC transaction provided that the services do not fall within the scope of activities described in paragraph 21.1.1 of the New Code Provisions.
            2. For the avoidance of doubt, if the new applicant has decided at the time of the engagement of a capital market intermediary that its fee arrangement should include a discretionary fee, the capital market intermediary’s written engagement is required to specify the timing of payment of such discretionary fee under Rule 3A.34(3)/ 3A.36(3) (GEM Rule 6A.41(3)/ 6A.43(3)).

            FAQ 077-2022, FAQ No. 11
            LR reference: Main Board Rules 9.11(23a), 9.11(37), paragraph 10A of Form F in Appendix 5 / GEM Rules 12.23AA, 12.26(7), paragraph 10A of Form E in Appendix 5
            Released on 22/4/2022 (Updated on 4/8/2022)

            Question:

            In the event that a Pre-existing Listing Application which has passed the hearing is refiled after the Effective Date and assuming that a new hearing is not required, at what point in time should the information required under Rule 9.11(23a) (GEM Rule 12.23AA) be submitted to the Exchange?

            Answer:

            In the scenario described, the required information should be submitted when the listing application is re-filed.

            However, if such information had been submitted in the previous application and there is no material change to the information previously submitted, it would not be required to be re-submitted during the re-filing of the listing application.

            FAQ 077-2022, FAQ No. 23
            LR reference: Main Board Rule 9.11(23a) / GEM Rule 12.23AA
            Released on 4/8/2022

            Question:

            Is there any change to the requirement that issuers must submit printed copies of prospectuses to the Exchange?

            Answer:

            Issuers are required to submit two printed copies of a prospectus, duly signed by every director or proposed director of the issuer (or by his agent), to the Exchange on the intended date of authorisation of the prospectus in accordance with the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) (“C(WUMP)O”). We currently do not propose any change to this requirement as it is for prospectus registration purpose under C(WUMP)O.

            FAQ Series N/A, FAQ No. 075-2021
            LR reference: Main Board Rule 9.11(33)/ GEM Rule 12.25(2)
            Released on 18/06/2021

            Question:

            A director of a listing applicant is subject to an investigation, hearing, proceeding or judicial proceeding in respect of which disclosure is prohibited by law.

            How does the director ensure that the listing document complies with the requirement in Appendix 1A Paragraph 41(1) regarding disclosure of all "other information which shareholders should be aware pertaining to the competence or integrity of such director"?

            Answer:

            The director and the sponsor should assess whether the relevant investigation, hearing, proceeding or judicial proceeding relates to the director’s competence or integrity, and try. If yes, the director is encouraged to seek consent from the relevant regulator or authority to disclose relevant details of the investigation, hearing, proceeding or judicial proceeding to the Exchange for assessment of his suitability under the Listing Rules.

            If the director is unable to obtain the relevant consent, or the Exchange determines (following confidential disclosure by the director) that the investigation, hearing, proceeding or judicial proceeding gives rise to material concerns regarding his competence or integrity, the listing document will not be able to comply with Appendix 1A Paragraph 41(1).

            Applicants may submit pre-IPO enquiries to the Exchange to seek informal and confidential guidance on such issues.

            FAQ Series 1, FAQ No. 20A
            LR reference: Main Board Rules 9.11(38), Appendix 1A Paragraph 41(1), Appendix 5 Form B/H/I Paragraph 2 / GEM Rules 12.26(9), Appendix 1A Paragraph 41(1), Appendix 6 Form A/B/C Paragraph 2
            Released on 8/5/2015 (Updated in February 2020)

            Question:

            What is the Exchange's policy on pre-IPO enquires?

            Answer:

            The Exchange will only consider pre-IPO enquires which are novel and specific. Sponsors cannot shift their responsibility to ensure that an Application Proof is substantially complete to the Exchange or the Commission by abusing the pre-IPO enquiry process. The pre-IPO enquiry process should not be taken as a means to get a listing document vetted before an application is submitted.

            Any such enquiries will not be considered. Sponsors and advisors are advised to follow the guidance in the relevant Listing Decisions and Guidance Letters issued by the Exchange from time to time. Pre-IPO enquires on a no-name basis will also not be considered.

            FAQ Series 24, FAQ No. 4
            LR reference: Main Board Rules Chapter 9 / GEM Rules Chapter 12
            Released on 26/7/2013

            Question:

            How long does it take for a listing application to be presented to the Listing Committee/ GEM Listing Approval Group for consideration?

            Answer:

            The timeframe may vary depending on, among other things, the quality of the Application Proof , the time required for the sponsor to respond to the regulators' comments.

            The quality of the sponsor's responses, and the number of application being processed by the regulators at the relevant time.

            In the case of an applicant which is a mineral company under Chapter 18 of the Listing Rules/ Chapter 18A of the GEM Listing Rules, in addition to the factors stated above, the timeframe will also depend on the quality of the Competent Person's Report. The independent consultants on the panel to assist the Exchange in the review of the Competent Person's Reports have agreed to endeavour to meet the timeline set forth by the Exchange . But there may be cases where some delay may occur (e.g. due to the quality of the Competent Person's Report).

            FAQ Series 24, FAQ No. 9
            LR reference: Main Board Rules Chapter 9 / GEM Rules Chapter 12
            Released on 26/7/2013

            Question:

            Whether the amount of sponsor's fees is required to be disclosed in a listing document?

            Answer:

            The total amount of sponsor fees paid and payable should be disclosed in the listing document according to the Commission's Consultation Conclusions on the regulation of IPO sponsors.

            FAQ Series 24, FAQ No. 15
            LR reference: Main Board Rules Chapter 9, Guidance Letter HKEx-GL56-13 / GEM Rules Chapter 12, Guidance Letter HKEx-GL56-13
            Released on 3/9/2013

          • Chapter 9A

            View Current PDFView Current PDF

            Question:

            What are the changes to the GEM transfer mechanism?

            Answer:

            The changes to GEM transfer mechanism are summarised below:

              Existing New
            Sponsor Not Required Required and must be appointed at least two months before the submission of the listing application
            Publication requirement
            •   Announcement of an application to transfer to Main Board
            •   Detailed transfer announcement
            •   Announcement of an application to transfer to Main Board
            •   Application Proof
            •   Listing Document
            •   Formal notice

            Certain GEM transfer applications note under transitional arrangements requires the issue of detailed transfer announcements only

            Initial listing fee 50% of the Main Board initial listing fee Standard initial listing fee for Main Board

            Note: A GEM transfer application submitted by an Eligible Issuer (as defined in Main Board Rule 9A.01A) that has not changed its principal business and controlling shareholder since listing on GEM, and is not an infrastructure or a mineral company. See FAQ No. 014-2017 for further information

            FAQ Series N/A, FAQ No. 011-2017
            LR reference: Main Board Rules 3A.02, 9A.01A, Appendix 28 paragraph 9 / GEM Rules N/A
            Released on 15/12/2017

            Question:

            How will the changes affect new listing applicants?

            Answer:

            New listing applicants will be affected by the following changes:

              Before the Rule Amendment Effective Date On and after the Rule Amendment Effective Date
            GEM listing applicants Applications will be processed under the Main Board or GEM Listing Rules in force immediately before the Rule Amendment Effective Date, with only one renewal of such applications permitted thereafter Applications will be processed under amended GEM Listing Rules (see FAQ No. 009-2017) and any subsequent GEM transfer applications will be processed under the amended Main Board Listing Rules (see FAQ No. 010-2017)
            Main Board listing applicants Applications will be processed under amended Main Board Listing Rules (see FAQ No. 010-2017)

            FAQ Series N/A, FAQ No. 012-2017
            LR reference: Main Board Rules 9A.01A / GEM Rules 10.11A, 10.12(1A), 11.12A, 11.14(3), 11.23(2), 11.23(6), 11.23(9), 13.16A, PN6
            Released on 15/12/2017

            Question:

            What is a "valid" listing application under the definition of an "Eligible Issuer"?

            Answer:

            A GEM listing application that was submitted to the Exchange on or before 16 June 2017 and (i) has not been rejected or returned by the Exchange or withdrawn by the applicant; and (ii) if lapsed, renewed within three calendar months from the lapse date (the "Renewed Application").

            FAQ Series N/A, FAQ No. 014-2017
            LR reference: Main Board Rule 9A.01(A)(2), GEM Rule 12.09(1)
            Released on 15/12/2017

            Question:

            Is shareholders' approval required for transfer of listing under the Listing Rules?

            Answer:

            No. However, it may be required under the transfer applicant’s constitutive documents, or under applicable company law in the jurisdiction of incorporation of the transfer applicant.

            FAQ Series 5, FAQ No. 16
            LR reference: Main Board Rule 9A.02 / GEM Rule 9.24
            Released on 2/5/2008 (Updated in February 2020)

            Question:

            How should a transfer applicant demonstrate compliance with the minimum market capitalisation requirement under Rule 8.09(2) or paragraph 7(1)(a) of Appendix 28 to Main Board Rules (“MB Mkt Cap Requirement”)?

            Answer:

            Market capitalisation should be calculated using the share price on the date of listing on the Main Board.

            In practice, the Exchange will assess whether the applicant will be able meet the MB Mkt Cap Requirement based on the closing share price on the trading day immediately before the first day of the proposed transfer (i.e. Main Board listing). The Exchange will also examine the applicant’s share price movement during the trading record period, and if the applicant had not been able to meet the MB Mkt Cap Requirement for a prolonged period of time, the Exchange will closely monitor the applicant’s share price movement and critically examine any unusual increase, especially when close to the day of transfer. The Exchange may not approve the transfer application until the applicant and its sponsor provide reasonable and satisfactory explanation on the unusual share price movement. Further, if the applicant’s share price and/ or trading volume had been volatile, the Exchange will require the applicant to make relevant prominent disclosure in the transfer announcement/ listing document.

            FAQ Series 5, FAQ No. 21
            LR reference: Main Board Rules 9A.02(1), 8.09(2), paragraph 7(1)(a) of Appendix 28
            Released on 2/5/2008 (Updated in February 2020)

            Question:

            Can a GEM issuer submit a transfer application before it publishes the annual report of the first full financial year which commenced after the date of its GEM listing, if such annual report will be published before its intended date of listing on the Main Board? Please provide an example to illustrate when a GEM issuer can submit its transfer application.

            Answer:

            No. A GEM issuer applying for transfer must have such annual report when it submits its transfer application. For example, if a GEM issuer has a December financial year end and is listed on GEM in 2008, under Rule 9A.02(2), it could submit a transfer application after the annual report for the financial year 2009 has been published and distributed to its shareholders, which is required to be within the first three months of 2010 under GEM Rule 18.03.

            FAQ Series 5, FAQ No. 17
            LR reference: Main Board Rule 9A.02(2)
            Released on 2/5/2008 (Updated in February 2020)

            Question:

            What factors would the Exchange take into consideration in assessing whether a “ breach” by a GEM transfer applicant is serious?

            Answer:

            The Exchange will normally have regard to the following factors:

            •   the nature and extent of the breach (for example, whether it involves any prejudice or risk of prejudice to investors such as failure to obtain prior shareholder approval for connected transactions, or failure to make disclosure under Rule 13.09 and the duration and frequency of the breach); and
            •   whether there are evidences that the breach involves fraud, deceit or dishonesty, is deliberate or due to recklessness, or reveals material or systemic weaknesses in the listed company's internal control procedures.

            FAQ Series 5, FAQ No. 20
            LR reference: Main Board Rule 9A.02(3)
            Released on 2/5/2008 (Updated in February 2020)

            Question:

            How can a GEM issuer ascertain it fulfils the requirement under Rule 9A.02(3) before it submits a transfer application?

            Answer:

            The GEM issuer may request for a written confirmation from the Listing Department on whether it can fulfil the requirement under Rule 9A.02(3).

            The Listing Department will confirm whether the GEM issuer has been the subject of any disciplinary investigation by the Exchange in relation to a serious breach or potential serious breach of any GEM Listing Rules or Exchange Listing Rules in the past 12 months from the date of the confirmation letter. If additional information that alters such confirmation comes to light within two months of the letter, the Exchange will notify the GEM issuer in writing.

            FAQ Series 5, FAQ No. 22
            LR reference: Main Board Rule 9A.02(3)
            Released on 2/5/2008 (Updated in February 2020)

            Question:

            What are the facilitative measures for GEM transfer applicants after the removal of the GEM streamlined process?

            Answer:

            Facilitative measures are as follows:

            (a) Dispensation from the following requirements for GEM transfer applicants which follow Chapter 9 application procedures1 (see new Main Board Rule 9A.03(1A) and Main Board Rule 9A.03(1B)):
            -   Main Board Rule 9.11(17a): production of certificate of incorporation;
            -   Main Board Rule 9.11(30): production of a HKSCC notice that the securities to be listed are Eligible Securities; and
            -   Main Board Rule 12.01B: publication of Post Hearing Information Pack requirement.
            (b) Dispensation from the post-IPO lock-up on controlling shareholders requirement is maintained (Main Board Rule 10.07(4)), provided that any plan by the controlling shareholders of the issuer to dispose of their interests in the issuer in the next 12 months has been prominently disclosed in the listing document.
            (c) Dispensation from the restriction on post-listing fund-raising is maintained (Main Board Rule 10.08(5)), provided that any plan to raise funds within six months from the date of the transfer of the issuer's listing to the Main Board has been prominently disclosed in the listing document.
            (d) Dispensation from the compliance adviser requirement under Main Board Rule 3A.19 is maintained (Main Board Rule 9A.13 and new Main Board Appendix 28, paragraph 16).
            (e) The GEM delisting procedures under Chapter 9 of the GEM Rules do not apply to GEM transfer applications.

            FAQ Series: N/A, FAQ No. 018-2017
            LR reference: Main Board Rules 3A.19, 9.11(17a), 9.11(30), 9A.03, 10.07(4), 12.01B / GEM Rule 9.20
            Released on 15/12/2017

            Question:

            If a GEM issuer transfers the listing of its equity securities to the Main Board, would the related GEM-listed warrants, options or convertible instruments be transferred to Main Board?

            Answer:

            Yes, any related GEM-listed warrants, options or convertible instruments are expected to transfer to the Main Board simultaneously with the equity securities, which is in line with the spirit of Main Board Listing Rules 15.05 and 16.02.

            FAQ Series 5, FAQ No. 28
            LR reference: Main Board Rules 9A.10
            Released on 2/5/2008 (Updated in February 2020)

            Question:

            If there is an issue of new shares at the time of or shortly before the transfer of listing, will there be any parallel trading arrangements (i.e. with existing shares traded on GEM and newly issued shares traded on the Main Board)?

            Answer:

            No. Parallel trading of securities of the same issuer on both boards is not allowed. There should be a clear-cut date for cessation of trading on GEM and commencement of trading on the Main Board.

            FAQ Series 5, FAQ No. 29
            LR reference: Main Board Rule 9A.11
            Released on 2/5/2008 (Updated in February 2020)

            Question:

            If a GEM issuer obtained shareholders' approvals for continuing connected transactions which will take place within a certain period, and transfers its listing from GEM to Main Board during that period, would it be necessary for the GEM issuer to obtain shareholders' approval again after the transfer to the Main Board?

            Answer:

            No, if there has not been any change of facts or circumstances since the original shareholders' approval was granted, a GEM issuer does not need to refresh the shareholders' approval merely because of its transfer to the Main Board. The effect of the shareholders' approval shall continue until its original expiry date.

            FAQ Series 5, FAQ No. 30
            LR reference: Main Board Rule 9A.12(2)
            Released on 2/5/2008 (Updated in February 2020)

            Question:

            Can a GEM transfer applicant choose/ buy its new Main Board stock code?

            Answer:

            Yes, all GEM transfer applicants must change its stock code when it transfers to the Main Board, and they can choose/ buy their preferred stock code under the process same as that applicable to new Main Board IPO applicants.

            FAQ Series 5, FAQ No. 15
            LR reference: Main Board Rules Chapter 9A general / GEM Rule 9.24
            Released on 2/5/2008 (Updated in February 2020)

            Question:

            Will there be a listing ceremony for transferring to the Main Board from GEM?

            Answer:

            A listing ceremony can be arranged on the issuer's request as cases of a new Main Board IPO.

            FAQ Series 5, FAQ No. 34
            LR reference: Main Board Chapter 9A / GEM Rules N/A
            Released on 2/5/2008

             


             

            1 These GEM transfer applicants include those (i) GEM transfer applicants that are subject to the new Main Board Rules; and (ii) GEM transfer applicants under the transitional arrangements, but have changed in businesses and/or controlling shareholders since listing on GEM or are infrastructure or mineral companies.

          • Chapter 10

            View Current PDF

            Question:

            Will there be any change in what is meant in the Rules by "fully paid" and "partly paid" shares for Hong Kong-incorporated issuers after the New Companies Ordinance becomes effective?

            Answer:

            Yes. When the New Companies Ordinance becomes effective, "fully paid" will mean that the shareholder to whom shares are issued has paid the full consideration which was agreed to be paid for those shares, i.e., the issue price (and not that the shareholder has paid the full nominal value of those shares, as is the case under the existing Companies Ordinance). "Partly paid" will mean that the full issue price has not been paid.

            FAQ Series 26, FAQ No. 7
            LR reference: Main Board Rules 7.28, 8.11, 8.13, 10.06 (1)(a)(i); App 1A (paras 15(2)(d), 23(1) and 26); App 1B (paras 22(1) and 24); App 1C (para 34); App 1E (paras 23(1), 26 and 49(2)(d)); App 1F (paras 18(1) and 20); App 2A (para 4(3)); App 5 Forms / GEM Rules 10.45, 11.25, 11.27, 13.07(1); App 1A (paras 23(1) and 26); App 1B (paras 22(1) and 24); App 1C (para 34); App 2A (para 4(3)); App 5 Forms
            Released on 21/2/2014 (Updated on 01/01/2022)

            Question:

            A listed issuer will send an Explanatory Statement to its shareholders for seeking their approval of a general mandate for share repurchases at the forthcoming annual general meeting.

            Main Board Rule 10.06(1)(b) (Note 2 to GEM Rule 13.08) requires the listed issuer to confirm, among other things, that neither the Explanatory Statement issued under the Rule or the proposed share repurchase has any "unusual features". What does the term "unusual features" mean?

            Answer:

            Main Board Rules 10.05 and 10.06 (GEM Rules 13.03 to 13.14) set out the restrictions and notification requirements on share repurchases by listed issuers, including the specific disclosure requirements for an Explanatory Statement. The listed issuer's directors should determine whether the Explanatory Statement or the proposed share repurchase has unusual features having regard to the specific requirements under the Rules, the listed issuer's own circumstances, and features of share repurchase proposals which by virtue of their very frequent occurrence can be regarded as common or usual features of such proposals. The listed issuer should consult the Exchange in advance if it is in any doubt as to whether or not any matters are unusual.

            FAQ Series 8, FAQ No. 17
            LR reference: Main Board Rules 10.06(1)(b) / GEM Rules 13.08 Note 2
            Released on 28/11/2008

            Question:

            Will there be restrictions on disposal/ issuance of shares or fund-raising activities for a GEM issuer during its transfer application process?

            Answer:

            No, unless such activities would lead to market disruption or unfairness.

            Issuers should note that the requirements under Main Board Rules 10.07(1) and 10.08 are not applicable to GEM transfer as provided under Rule 10.07(4) and 10.08(5).

            FAQ Series 5, FAQ No. 31
            LR reference: Main Board Rules 10.07, 10.08
            Released on 2/5/2008 (Updated in February 2020)

            Question:

            If the controlling shareholder of a newly listed issuer pledges his shares in the issuer as security for a bank loan in the manner described in Note 2 to the Rule, can the bank dispose of the pledged shares during the first 6 (GEM: 12) months after listing of the issuer?

            Answer:

            Yes. Under Note 3 to Rule 10.07, the controlling shareholder must undertake to the issuer and the Exchange that he would notify the issuer immediately upon receipt of any indications from the bank about disposal of the pledged shares. The issuer must publish an announcement to disclose the matter as soon as possible after it has been notified by the controlling shareholder.

            FAQ Series 20, FAQ No. 28
            LR reference: Main Board Rules 10.07(1), Notes 2 and 3 to 10.07 / GEM Rules 13.16A, 13.18, 13.19
            Released on 28/2/2013 (Updated on 15/2/2018)

            Question:

            What are the facilitative measures for GEM transfer applicants after the removal of the GEM streamlined process?

            Answer:

            Facilitative measures are as follows:

            (a)    Dispensation from the following requirements for GEM transfer applicants which follow Chapter 9 application procedures (see new Main Board Rule 9A.03(1A) and Main Board Rule 9A.03(1B)):
              - Main Board Rule 9.11(17a): production of certificate of incorporation;
              - Main Board Rule 9.11(30): production of a HKSCC notice that the securities to be listed are Eligible Securities; and
              - Main Board Rule 12.01B: publication of Post Hearing Information Pack requirement.
            (b)    Dispensation from the post-IPO lock-up on controlling shareholders requirement is maintained (Main Board Rule 10.07(4)), provided that any plan by the controlling shareholders of the issuer to dispose of their interests in the issuer in the next 12 months has been prominently disclosed in the listing document.
            (c)    Dispensation from the restriction on post-listing fund-raising is maintained (Main Board Rule 10.08(5)), provided that any plan to raise funds within six months from the date of the transfer of the issuer's listing to the Main Board has been prominently disclosed in the listing document.
            (d)    Dispensation from the compliance adviser requirement under Main Board Rule 3A.19 is maintained (Main Board Rule 9A.13 and new Main Board Appendix 28, paragraph 16).
            (e)    The GEM delisting procedures under Chapter 9 of the GEM Rules do not apply to GEM transfer applications.

            FAQ Series N/A, FAQ No. 018-2017
            LR reference: Main Board Rules 3A.19, 9.11(17a), 9.11(30), 9A.13, 10.07(4), 12.01B / GEM Rule 9.20
            Released on 15/12/2017

          • Chapter 11

            View Current PDFView Current PDF

            Question:

            What are the disclosure requirements under Section 436 of the New Companies Ordinance for a Hong Kong incorporated issuer in relation to the publication of non-statutory accounts in its:

            (a) Annual/interim results announcement; and
            (b) interim report, quarterly results announcement / financial report, circulars or listing documents?

            Answer:

            The issuer must include a statement indicating that the statement of comprehensive income for a full financial year and/or the statement of financial position at a financial year end (the "Statements") presented in the account are not statutory financial statements under the New Companies Ordinance. The issuer must also disclose whether (i) an auditor's report had been prepared; and (ii) the auditors gave a qualified or modified audit opinion on the Statements.

            For details, please refer to Accounting Bulletin 6 "Guidance on the Requirements of Section 436 of the Hong Kong Companies Ordinance Cap.622" issued by Hong Kong Institute of Certified Public Accountants at:
            https://www.hkicpa.org.hk/-/media/HKICPA-Website/Members-Handbook/volumeII/ab6.pdf

            FAQ Series 31, FAQ No. 13
            LR reference: Main Board Rules 13.48, 13.49(1), 13.49(6), 14.66 to 14.69, 11.03 & 11.04, 11.16 to 11.19, 14.61 & 14.62, 4.25 to 4.29 / GEM Rules 18.49, 18.53, 18.66, 18.78, 18.79, 19.66 to 19.69, 14.03 & 14.06, 14.29 to 14.31, 19.61 & 19.62, 7.27 to 7.31
            Released on 11/9/2015 (Updated the hyperlink to Accounting Bulletin 6 in October 2019) (Updated in February 2020)

            Question:

            Will the Exchange return a listing application if the listing document does not comply with the Guidance Letter HKEX-GL86-16?

            Answer:

            The Guidance Letter HKEX-GL86-16 contains:

            (a) general guidance on producing clear and concise listing documents (General Guidance);
            (b) consolidated and updated version of a number of the Exchange's guidance letters on disclosure in listing documents, mostly included under the title "Simplification Series" (Consolidated Guidance); and
            (c) online hyperlinks to: (i) sample "Summary of the Constitution of the Company and the Companies Law" sections of listing documents of applicants incorporated in Bermuda, the Cayman Islands and the PRC (Specimen Sections); and (ii) the corresponding sample constitutional documents for the applicants (Sample Constitutional Documents).

            The Exchange will not return a listing application merely because it does not follow the General Guidance, the Specimen Sections or the Sample Constitutional Documents, but will remind applicants to do so.

            Applicants which submit their listing applications after 30 April 2016 should comply with the Consolidated Guidance.

            FAQ 001-2016
            LR reference: Main Board Rules 2.13, 11.07 / GEM Rules 14.08(7), 17.56
            Released on 2/2/2016 (Updated on 13/5/2016)

            Question:

            What are the changes in the Consolidated Guidance compared to the guidance letters on disclosure in listing documents, mostly included under the title "Simplification Series"?

            Answer:

            The changes in the Consolidated Guidance are limited to:

            (a) modifying or deleting certain overly specific content guidance which is only relevant in a limited number of cases. For example, the specific content guidance for product returns and warranty, and industry standards (e.g. International Organization for Standardization (ISO)), which does not apply to all listing applicants, and has been modified and deleted, respectively. This helps to ensure that the guidance remains high level and principles-based;
            (b) removing any repetition after consolidating the various guidance letters on disclosure in listing documents, mostly included under the title "Simplification Series"; and
            (c) updating the guidance based on the Exchange's most recent experience. For example, in respect of listing applicants in the banking and securities sectors, we have updated the content guidance so that the following financial information/ ratios are to be disclosed in the Summary section of a listing document:
            •   in respect of the banking sector, net interest spread, net interest margin, capital adequacy ratio, non-performing loan ratio and loan to deposit ratio; and
            •   in respect of the securities sector, the amount of securities underwritten, average commission rate, trading volumes, average rate of return, asset under management and balances of margin financing and securities lending.

            For marked-up version of the guidance letters included in the Consolidated Guidance, see:

            http://www.hkex.com.hk/eng/rulesreg/listrules/listsptop/guidepsld/psld_index.htm

            FAQ 002-2016
            LR reference: Main Board Rules 2.13, 11.07 / GEM Rules 14.08(7), 17.56
            Released on 2/2/2016 (Updated on 26/2/2016)

            Question:

            Will the guidance letters on disclosure in listing documents, mostly included under the title "Simplification Series", not to be used and be withdrawn after the publication of Guidance Letter HKEX-GL86-16 on 2 February 2016?

            Answer:

            The following guidance letters on disclosure in listing documents, mostly included under the title "Simplification Series", have been withdrawn:

            A. HKEX-GL27-12 on "Summary and Highlights" section
            B. HKEX-GL54-13 on "Risk Factors" section
            C. HKEX-GL48-13 on "Industry Overview" section
            D. HKEX-GL49-13 on "History and Development" section
            E. HKEX-GL-50-13 on "Business" section
            F. HKEX-GL59-13 on "Financial Information" or "Management discussion and analysis on the historical financial information (MD&A)" section
            G. HKEX-GL72-14 on "Applicable laws and Regulations" section
            H. HKEX-GL62-13 on "Directors, Supervisors and Senior Management" section
            I. HKEX-GL33-12 on "Use of Proceeds" section
            J. HKEX-GL64-13 on Application Forms and "How to Apply for Hong Kong Offer Shares" section

            Applicants which submit their listing applications after 30 April 2016 should comply with the Consolidated Guidance.

            FAQ 003-2016
            LR reference: Main Board Rules 2.13, 11.07 / GEM Rules 14.08(7), 17.56
            Released on 2/2/2016 (Updated on 13/5/2016)

            Question:

            Is it necessary to revise the printed application forms for shares/ debentures/authorised CISs upon issue of an addendum or replacement e-prospectus?

            Answer:

            If there is a change to the prospectus warranting the issue of an addendum or replacing e-prospectus, it is a question of law whether the original printed application forms for the relevant securities accompanying the original prospectus would continue to be valid.

            In this connection, Offerors are advised to seek to professional advice as to:

            (a) the need to revise the original application forms and/or;
            (b) how to deal with completed application forms submitted to the Offerors under the terms of the prospectus. This may include considerations of extending the offer period and/or granting a right of withdraw to applicants who have submitted in applications based on the information in the original prospectus; and
            (c) the need for putting in place appropriate arrangements to ensure that the issue and marketing of securities is conducted in a fair and orderly manner.

            HKEX-GL81-15, FAQ No. 23
            LR reference: Main Board Rules 11.13 / GEM Rules 14.24
            Released on 26/11/2010

            Question:

            Will valuations of Natural Resource assets (i.e. Reserves) based on discounted cash flows (“DCF”) be regarded as profit forecasts under Rule 14.61 which is required to be reviewed by the reporting accountants?

            Answer:

            No. However, issuers must disclose all relevant assumptions and the reason DCF was chosen as a valuation method.

            GL52-13 Appendix 1, FAQ No. 20
            LR reference: Main Board Rules 11.17, 14.61, 18.34, Appendix 1A(34)(2), Appendix 1B(29)(2) / GEM Rules 14.29, 19.61, 18A.34, Appendix 1A(34)(2), Appendix 1B(29)(2)
            Released on 26/5/2010 (Updated in February 2020)

            Question:

            Will trading halt or suspension be required pending the announcement/ listing document or at any time during the transfer process?

            Answer:

            GEM transfer applicants are required to observe the trading halt or suspension policy and the general disclosure obligations under the GEM Rules as long as they are still listed on the GEM Board.

            A GEM transfer applicant must assess whether the information relating to the transfer process would require disclosure under GEM Rule 17.10, having considered its particular circumstances. A trading halt or suspension would be necessary in any of the circumstances described in GEM Rules 17.11A(1) to (3) where an announcement cannot be made.

            FAQ Series 5, FAQ No. 27
            LR reference: Main Board Rule 11.04, Paragraph 11 of Appendix 28
            Released on 2/5/2008 (Updated in February 2020)

          • Chapter 12

            View Current PDF

            Question:

            When can an applicant, including a biotech company, be permitted to confidentially file its application proof?

            Answer:

            Please refer to Paragraph 18 of Practice Note 22 and paragraph A10 of guidance letter HKEX-GL57-13 for conditions when a confidential filing may be considered.

            Where the Exchange grants a waiver of Rule 12.01A, the applicant should note the following:

            (i) where the listing application and related documents (including the application proof) submitted are not considered substantially complete under Rule 9.03(3), it will be returned and subject to the review procedures and ultimate consequence of listing application being delayed for not less than eight weeks;
            (ii) a draft application proof in Chinese is not required to be published on the Exchange's website; and
            (iii) compliance with the requirement for the issuance of post hearing information pack does not change.

            FAQ Series N/A, FAQ No. 042-2018
            LR reference: Main Board Rules 12.01A
            Released on 24/8/2018

            Question:

            The Application Proof is usually revised several times during the vetting process. Is an applicant required to publish all proofs of the listing document on the Exchange's website?

            Answer:

            No. An applicant is only required to publish three versions of the listing document: (i) its Application Proof, which is the draft listing document submitted with a listing application form; (ii) its PHIP; and (iii) the final listing document on the Exchange's website.

            FAQ Series 24, FAQ No. 1
            LR reference: Main Board Rules 12.01A and 12.01B / GEM Rules 16.01A and 16.01B
            Released on 26/7/2013 (Updated in February 2020)

            Question:

            What are the facilitative measures for GEM transfer applicants after the removal of the GEM streamlined process?

            Answer:

            Facilitative measures are as follows:

            (a) Dispensation from the following requirements for GEM transfer applicants which follow Chapter 9 application procedures (see new Main Board Rule 9A.03(1A) and Main Board Rule 9A.03(1B)):
             
            - Main Board Rule 9.11(17a): production of certificate of incorporation;
            - Main Board Rule 9.11(30): production of a HKSCC notice that the securities to be listed are Eligible Securities; and
            - Main Board Rule 12.01B: publication of Post Hearing Information Pack requirement.
            (b) Dispensation from the post-IPO lock-up on controlling shareholders requirement is maintained (Main Board Rule 10.07(4)), provided that any plan by the controlling shareholders of the issuer to dispose of their interests in the issuer in the next 12 months has been prominently disclosed in the listing document.
            (c) Dispensation from the restriction on post-listing fund-raising is maintained (Main Board Rule 10.08(5)), provided that any plan to raise funds within six months from the date of the transfer of the issuer's listing to the Main Board has been prominently disclosed in the listing document.
            (d) Dispensation from the compliance adviser requirement under Main Board Rule 3A.19 is maintained (Main Board Rule 9A.13 and new Main Board Appendix 28, paragraph 16).
            (e) The GEM delisting procedures under Chapter 9 of the GEM Rules do not apply to GEM transfer applications.

            FAQ Series N/A, FAQ No. 018-2017
            LR reference: Main Board Rules 3A.19, 9.11(17a), 9.11(30), 9A.13, 10.07(4), 12.01B / GEM Rule 9.20
            Released on 15/12/2017

            Question:

            When does a new applicant need to publish an OC Announcement (as defined in Rule 1.01 (GEM Rule 1.01)) and what is the content requirement of such announcement?

            Answer:

            The requirement to publish an OC Announcement only applies to a placing involving bookbuilding activities in connection with a New Listing (Refer to Rule 3A.32(1)(a)(i) (GEM Rule 6A.39(1)(a)(i)).

            Publication of an OC Announcement is required:

            (i) on the same date as the new applicant files the listing application (Note) and publishes the Application Proof (or in the case of a listing of interests in a REIT, on the same date as it files an authorisation application with the Commission and publishes the Application Proof) (“Submission of the Application”).

            A new applicant that is allowed to make a confidential filing under the Listing Rules is required to publish an OC Announcement on the same date as it publishes its PHIP instead. For the avoidance of doubt, the OC Announcement shall be published immediately after and on the same date as the publication of the Application Proof (or PHIP, where applicable). Such OC Announcement shall set out the name(s) of all overall coordinator(s) appointed by the new applicant as at the date of the announcement;
            (ii) each time an additional overall coordinator is appointed after the Submission of the Application. In such a case, the OC Announcement shall be published as soon as practicable after the appointment is made and in any event no later than the first business day after the date of the appointment (which appointment shall be no later than the 14th day after the date of Submission of the Application). Each OC Announcement shall disclose the appointment and set out the name(s) of all overall coordinator(s) appointed by the new applicant as at the date of the announcement; and
            (iii) each time the appointment of an overall coordinator is terminated after the Submission of the Application (or after the publication of the first OC Announcement for applicants allowed to make a confidential filing). In such circumstances, the OC Announcement shall be published as soon as practicable after the termination takes place, and is expected to be published no later than the first business day after the date of the termination of the appointment. Each such OC Announcement shall disclose the termination and set out the name(s) of all overall coordinator(s) that remain appointed by the new applicant as at the date of the announcement.

            For the purpose of publication on the Exchange’s website, an OC Announcement must, among other things, be accompanied by appropriate disclaimer and warning statements and not contain any information regarding the proposed offering or other information that would result in it being deemed as (i) a prospectus under section 2(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance as amended from time to time (Cap. 32) (“CWUMPO”); (ii) an advertisement under section 38B(1) of the CWUMPO; or (iii) an invitation to the public in breach of section 103(1) of the SFO, as stipulated under paragraphs 4(d) and 5A of Practice Note 22 (paragraphs 3(d) and 4A of Practice Note 5 of the GEM Rules).

            Also, for the avoidance of doubt, while intermediaries appointed may be awarded titles such as “global coordinator”, “bookrunner”, “lead manager”, etc., if they fall within the definition of “overall coordinators” under the Rule Amendments by virtue of the activities they conduct or are engaged to conduct, each OC Announcement shall clearly identify them as “overall coordinators”, in addition to any other titles of these intermediaries which the new applicant may intend to disclose in the OC Announcement.

            Note: This includes a re-filing of a listing application.

            FAQ 077-2022, FAQ No. 15
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41(2), 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46(2),12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            What should a new applicant do if it failed to publish an OC Announcement at the prescribed timing under the Listing Rules?

            Answer:

            The new applicant shall publish the OC Announcement as soon as practicable and clearly state the following in the announcement:

            (i) when the OC Announcement should have been published under the Listing Rules;
            (ii) the reasons for the delay in publication;
            (iii) and that the Exchange may take action in respect of the new applicant’s listing application on the breach of the relevant Listing Rule.

            FAQ 077-2022, FAQ No. 16
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41(2), 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46(2), 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            Does a new applicant need to publish an OC Announcement on an appointment or termination of an overall coordinator that takes place before the submission of its listing application?

            Answer:

            No, the obligation to publish an OC Announcement arises only when a new applicant submits a listing application. See FAQ No. 15.

            However, the new applicant is required to notify the Exchange in writing, as soon as practicable, of a termination of an overall coordinator that takes place before the submission of the listing application, and provide the information required under Rule 3A.41(1) (GEM Rule 6A.46(1)) to the Exchange.

            Note: A new applicant that is allowed to make a confidential filing under the Listing Rules is not required to publish the first OC Announcement on the same date as it files the listing application and publishes the Application Proof. Instead, such new applicant shall publish its first OC Announcement on the same date as it publishes its PHIP.

            FAQ 077-2022, FAQ No. 17
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41, 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46, 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            Does a listed issuer need to publish an OC Announcement on an appointment or termination of an overall coordinator in relation to the placings other than in connection with a New Listing?

            Answer:

            No, the requirement for publication of an OC Announcement only applies to a new applicant effecting a placing involving bookbuilding activities in connection with a New Listing and does not apply to an offering by a listed issuer under Rule 3A.32(1)(a)(ii) or 3A.32(1)(b) (GEM Rule 6A.39(1)(a)(ii) or 6A.39(1)(b)).

            However, in an offering by a listed issuer under Rule 3A.32(1)(a)(ii) or 3A.32(1)(b) (GEM Rule 6A.39(1)(a)(ii) or 6A.39(1)(b)), it is required to notify the Exchange of the termination of an overall coordinator in writing as soon as practicable under Rule 3A.41(1) (GEM Rule 6A.46(1)).

            FAQ 077-2022, FAQ No. 18
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41, 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46, 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            (i) Where will OC Announcements be posted?
            (ii) Do OC Announcements need to be pre-vetted by the Exchange prior to publication?
            (iii) What are the publication requirements for OC Announcements?

            Answer:

            (i) OC Announcements will be posted on the “New Listings” page of the HKEXnews website.
            (ii) No
            (iii) As in the case of publication of Application Proofs and PHIPs, a new applicant shall submit the OC Announcement through HKEx-ESS for publication on the Exchange’s website, and is not required to publish the OC Announcement on its own website.
            FAQ 077-2022, FAQ No. 19
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41, 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46, 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            A new applicant has submitted a listing application before the Effective Date, which remains valid as at the Effective Date. If the new applicant appoints or terminates the engagement of an overall coordinator after the Effective Date, does it need to publish an OC Announcement?

            Answer:

            In the scenario described, the new applicant will not be required to publish an OC Announcement on the appointment or termination of the engagement of an overall coordinator that takes place after the Effective Date, as the Rule Amendments are not applicable to listing applications submitted prior to the Effective Date. For example, if a new applicant submits a listing application 1 week before the Effective Date, it will not be required to publish an OC Announcement in respect of the appointment of an overall coordinator during the 2-week period following the submission date of the listing application (even if such appointment takes place in the first week following the Effective Date).

            In the event the new applicant re-files a listing application on or after the Effective Date, it will need to comply with the applicable Rule Amendments, including those in relation to the publication of OC Announcements.

            FAQ 077-2022, FAQ No. 22
            LR reference: Main Board Rules 2.07C(6)(a), 3A.37, 3A.41(2), 9.08(2), 12.01C, Practice Note 22 / GEM Rules 16.19(1), 6A.44, 6A.46(2), 12.10(2), 16.01C, Practice Note 5
            Released on 22/4/2022

            Question:

            Will IPO allotment results continue to be published in newspapers?

            Answer:

            Main Board Listing Rule 12.08 (GEM Listing Rule 16.13) requires issuers to publish "an announcement of the results of the offer" and "the basis of allotment of the securities". This information should be published on the HKEX website via the e-Submission System. There is no longer a requirement in the Main Board or GEM Listing Rules to publish the information required by Listing Rule 12.08 (GEM Listing Rule 16.13) in full as a paid advertisement in newspapers except where the issuer does not maintain its own website.

            The information described by Listing Rule 12.08 (GEM Listing Rule 16.13) does not extend to publication of a full list of the allotment of securities to each and every applicant ("full IPO allotment results"). As a matter of market practice, to help ensure that the commencement of trading will take place in an orderly fashion, some issuers choose to publish a full list of successful applicants in newspapers. Other applicants choose to make use of internet or telephone based systems to provide an avenue for communication of the outcome of applications.

            Implementation of Electronic Disclosure will not change the options available to applicants and we expect some applicants will opt for publication of a full IPO allotment result announcement in the newspapers.

            FAQ Series 3, FAQ No. 65
            LR reference: Main Board Rules 12.08 / GEM Rules 16.13
            Released on 22/3/2007 (Updated on 7/3/2011)

            Question:

            Under the Paperless Listing and Subscription Regime, what types of listing documents should be published solely in an electronic format?

            Answer:

            Listing documents in respect of the following should be published solely in an electronic format under the Paperless Listing and Subscription Regime:

            - initial public offerings of equities, stapled securities, depositary receipts and collective investment schemes;
            - public offerings of debt securities;
            - listings by introduction; and
            - transfers of listing from GEM to the Main Board.

            FAQ Series N/A, FAQ No. 075-2021
            LR reference: Main Board Rules 12.11, 20.19A, 25.19A / GEM Rules 16.04C, 29.21A
            Released on 18/6/2021

            Question:

            Under the Paperless Listing and Subscription Regime, what types of subscriptions should be made through electronic channels and what types of subscriptions should continue to be made in paper form?

            Answer:

            Subscriptions in respect of the following should be made through electronic channels under the Paperless Listing and Subscription Regime:

            - initial public offerings of equities, stapled securities, depositary receipts and collective investment schemes;
            - any other transactions which involve such public offerings (e.g transfers of listing from GEM to the Main Board); and
            - preferential offerings (such as employee offerings and assured entitlement offerings to qualified shareholders).

            The Listing Rule changes will not affect the existing subscription channels for the following items, and (where appropriate) paper application forms can continue to be used:-

            - Mixed Media Offers;
            - public offerings of debt securities; and
            - investments in structured products listed under Chapter 15A of the Main Board Rules.

            FAQ Series N/A, FAQ No. 075-2021
            LR reference: Main Board Rules 12.11, 20.19A / GEM Rule 16.04C
            Released on 18/6/2021 (Updated on 23/09/2021)

            Question:

            In respect of public offerings of equity and collective investment schemes, how may investors subscribe for new securities electronically under the Paperless Listing and Subscription Regime?

            Answer:

            For public offerings of equity and collective investment schemes, investors may subscribe for new securities through the following electronic subscription channels:

            (i) eIPO online platform operated by issuer’s share registrar; or
            (ii) the EIPO service offered by the Central Clearing and Settlement System (CCASS): either by instructing brokers or custodians to give electronic application instructions on their behalf or by giving electronic application instructions to Hong Kong Securities Clearing Company Limited through CCASS.

            FAQ Series N/A, FAQ No. 075-2021
            LR reference: Main Board Rules 12.11, 20.19A / GEM Rule 16.04C
            Released on 18/6/2021

            Question:

            What is the effective date of the Listing Rule changes on the Paperless Listing and Subscription Regime? Do the changes only apply to listing applications submitted on or after the effective date of 5 July 2021?

            Answer:

            The changes in the Listing Rules on the Paperless Listing and Subscription Regime will take effect on 5 July 2021. The changes apply to listing documents published on or after 5 July 2021, regardless of the date of submission of the relevant listing applications. Accordingly, listing applications with listing documents expected to be published on or after that date will be affected and their listing documents should be made available solely in electronic format.

            FAQ Series N/A, FAQ No. 075-2021
            LR reference: Main Board Rules 12.11, 20.19A, 25.19A / GEM Rules 16.04C, 29.21A
            Released on 18/6/2021

            Question:

            Is there any transitional period for the Listing Rule changes on the Paperless Listing and Subscription Regime?

            Answer:

            There is no transitional period for the relevant changes of the Listing Rules. However, those changes do not apply to Mixed Media Offers.

            FAQ Series N/A, FAQ No. 075-2021
            LR reference: Main Board Rules 12.11, 20.19A, 25.19A / GEM Rules 16.04C, 29.21A
            Released on 18/6/2021

            Question:

            Where and for how long should electronic listing documents be published?

            Answer:

            Issuers should publish electronic listing documents on both the HKEX website (through EPS) and the issuer’s own website and on a continuous basis. There is no time limit on the length of time listing documents should remain online.

            FAQ Series N/A, FAQ No. 075-2021
            LR reference: Main Board Rules 12.11, 20.19A, 25.19A / GEM Rules 16.04C, 29.21A
            Released on 18/6/2021

            Question:

            What is a Mixed Media Offer or MMO?

            Answer:

            Mixed Media Offer or MMO is an offer process where an issuer or a collective investment scheme (CIS) issuer distributes paper application forms for public offers of certain securities* so long as the prospectus is available on the HKEX website or the issuer/CIS issuer's websites.

            The Class Exemption Notice sets out the conditions an offeror must comply with in a Mixed Media Offer. The SFC will impose similar conditions on CIS issuers who intend to conduct a Mixed Media Offer with regards to interests in SFC-authorised CISs that are / or will be listed on the Exchange.

            *"Securities" refer to shares of or debentures in a company and SFC-authorised CISs.

            HKEX-GL81-15, FAQ No. 1
            LR reference: Main Board Rules 12.11A / GEM Rules 16.04D
            Released on 26/11/2010 (Updated in July 2015)

            Question:

            Who may conduct an MMO?

            Answer:

            Any offeror intending to conduct a public offer of:

            (a) shares of a company (including an investment company under Chapter 21 of the Main Board Rules) listed or to be listed on the Exchange;
            (b) debentures of a company listed or to be listed on the Exchange, and
            (c) interests in CISs listed or to be listed on the Exchange and authorised by the SFC under section 104 of the Securities and Futures Ordinance (SFO).

            HKEX-GL81-15, FAQ No. 2
            LR reference: Main Board Rules 12.11A / GEM Rules 16.04D
            Released on 26/11/2010

            Question:

            What existing practice does the MMO aim to change?

            Answer:

            The market has developed a practice of printing large quantities of printed prospectuses copies for distribution at points where printed application forms are distributed, even though e-prospectuses are available online. Many of these copies are not taken up and end up as trash.

            Under an MMO option, an offeror who complies with the conditions of the Class Exemption Notice (see FAQ No. 15 to 19 under HKEX-GL81-15), or obtains a waiver from the SFC, may distribute printed application forms even though each application form is not accompanied by a printed prospectus.

            HKEX-GL81-15, FAQ No. 3
            LR reference: Main Board Rules 12.11A / GEM Rules 16.04D
            Released on 26/11/2010

            Question:

            How to ensure investors who have no access to the internet can access the prospectus before they apply for subscription under an MMO?

            Answer:

            FAQ No. 7 under HKEX-GL81-15 sets out where investors can get a copy of the printed prospectus.

            Investors will continue to obtain a free copy of the printed prospectus from specified locations (e.g. at designated branches of receiving banks or the principal place of business of the sponsors) upon request. Also, at least three copies of the printed prospectus will be available for inspection at every location where the paper application forms are distributed.

            HKEX-GL81-15, FAQ No. 4
            LR reference: Main Board Rules 12.11A / GEM Rules 16.04D
            Released on 26/11/2010 (Updated in July 2015)

            Question:

            What is the difference between MMO and ePO?

            Answer:

            Both the MMO and ePO Guidelines aim to facilitate wider use and acceptance of electronic listing documents. The MMO proposal aims to facilitate distribution of electronic listing documents whilst applications continue to be accepted in paper form. The ePO Guidelines published by the SFC in April 2003 aim to facilitate electronic submission of applications during a public offer but do not deal with whether the prospectus is otherwise required to be distributed in printed or electronic form.

            Under the ePO Guidelines, the internet (or other electronic means) is used to display or provide access to prospectuses, application forms and/or to collect applications or application instructions from the public (applicants) during an initial public offering or a follow-on public offering.

            The MMO involves allowing a printed application form for the relevant securities to be issued without being accompanied by printed prospectus if certain conditions are met.

            MMO and ePO complement each other and are not mutually exclusive.

            HKEX-GL81-15, FAQ No. 5
            LR reference: Main Board Rules 12.11A / GEM Rules 16.04D
            Released on 26/11/2010

            Question:

            (a) How and when an investor may request a printed prospectus?
            (b) How quickly will a printed prospectus be made available to an investor upon request?
            (c) What is the quality of such printed prospectus?

            Answer:

            (a) Any member of the public may, during the offer period during normal business hours, obtain a printed prospectus, free of charge, at any location specified in the announcements notifying the public of the adoption of an MMO.
            (b) A printed prospectus must be made available to a member of the public upon request within four business hours.
            (c) The printed prospectus that is provided may be a stapled copy from a photocopy machine which is in black and white, grey-scale or colour. Where it is a black and white or grey-scale prospectus, the sponsor must be satisfied that it provides equivalent information to investors as a colour prospectus.

            HKEX-GL81-15, FAQ No. 6
            LR reference: Main Board Rule 12.11A / GEM Rule 16.04D
            Released on 26/11/2010 (Updated in July 2015)

            Question:

            Can investors still get a copy of printed prospectus?

            Answer:

            Yes, investors can collect a copy of printed prospectus free of charge upon request. Copies will be available at:

            (a) the depository counter of Hong Kong Securities Clearing Company Limited;
            (b) the offices of the company's Hong Kong share registrar, sponsor or co-ordinator offices; and
            (c) certain designated branches of the receiving or placing banks. Further, at least three printed prospectuses will be available "for inspection" at every location where printed application forms are available.

            These locations will be stated in the prospectus and announcements to inform the market of the proposed Mixed Media Offer as well as the application forms.

            We expect issuers and their sponsors/listing agents to assess the possible demand for printed prospectuses, including locations at which they are most frequently and likely to be collected. Companies should put in place appropriate procedures to enable them to gauge demand, for instance, a pre-order or booking system where investors can register their request for a copy of the printed prospectus.

            Consistent with existing practice, it is the responsibility of the companies' sponsors to comply with the Exchange Listing Rules and the CFA Code of Conduct by ensuring that there are sufficient copies of prospectuses available to the public to satisfy public demand.

            HKEX-GL81-15, FAQ No. 7
            LR reference: Main Board Rules 12.11A / GEM Rules 16.04D
            Released on 26/11/2010 (Updated in July 2015)

            Question:

            Where can the investors find out about the website addresses where they can get access to a copy of electronic prospectus?

            Answer:

            The application form and the issuer's announcement (made during the five-business day period before the start of the offer period) will set out details of where investors can access the electronic prospectus on the HKEX website and another website (usually its own website).

            HKEX-GL81-15, FAQ No. 8
            LR reference: Main Board Rules 12.11A / GEM Rules 16.04D
            Released on 26/11/2010 (Updated in July 2015)

            Question:

            Can investors rely on information on the company's (issuer's) website when deciding whether to invest in the company's shares?

            Answer:

            No, investors should ensure they only rely on information contained in the prospectus.

            The issuer's website may contain information outside prospectus. However, we would expect companies to clearly delineate between prospectus information and non-prospectus information. Web pages containing the electronic prospectus must not contain any promotional information about the issuer and the offer.

            HKEX-GL81-15, FAQ No. 9
            LR reference: Main Board Rules 12.11A / GEM Rules 16.04D
            Released on 26/11/2010

            Question:

            Is the printed prospectus identical to the electronic prospectus?

            Answer:

            Yes, the electronic prospectus must be identical to the printed prospectus other than colour (see FAQ No. 6(c) under HKEX-GL81-15 on production of black and white, grey-scale or colour copies). It should not be password protected and should be reasonably tamper-resistant.

            HKEX-GL81-15, FAQ No. 10
            LR reference: Main Board Rule 12.11A / GEM Rule 16.04D
            Released on 26/11/2010 (Updated in July 2015)

            Question:

            Why does the MMO not provide for a mechanism by which a request for obtaining printed prospectuses should be made?

            Answer:

            It is the offeror's responsibility, after taking appropriate advice from its sponsor/listing agent to assess the possible demand for printed prospectuses, including locations at which they are most frequently and likely to be collected.

            It is up to the offerors and their sponsors how or what procedures/mechanism they wish to implement to best determine the likely demand for their printed prospectuses.

            Please see responses to FAQ No. 7 under HKEX-GL81-15.

            We do not consider it appropriate for the regulators to impose any requirements on how an investor must make a request for a printed prospectus, say by setting requirements for the time and mode for making such request, will only increase the barrier for obtaining a printed prospectus. This may not work to the benefit of prospective investors.

            Accordingly, the MMO envisages that an investor who wishes to get a printed prospectus is only required to go to the specified locations, e.g. designated branches of receiving banks, for a printed prospectus.

            HKEX-GL81-15, FAQ No. 11
            LR reference: Main Board Rules 12.11A / GEM Rules 16.04D
            Released on 26/11/2010

            Question:

            If the electronic prospectus is not available on the issuer's website but is still available on HKEX's website, must the MMO be suspended?

            Answer:

            The offeror need not suspend the Mixed Media Offer if the electronic prospectus is only available on the HKEX website but not the issuer's website. It need only suspend the Mixed Media Offer if the prospectus is not available on both the HKEX website and the issuer's website for 4 consecutive hours or more.

            If during the offer period, the electronic prospectus is not available on the issuer's website, the offeror need not suspend the Mixed Media Offer if,

            (a) the electronic prospectus is available on the HKEX website between 6:00 am to 12:00 midnight from Monday to Friday, except public holidays; and
            (b) if the prospectus is also not available on the HKEX website, the period of the electronic prospectus being unavailable on both the websites is less than 4 hours.

            In the event the electronic prospectus is not available on both the HKEX and the company's websites for 4 consecutive hours or more between the hours of 6 am to 12 midnight Mondays to Fridays (except public holidays), the offeror can continue the offer process provided that it can comply with the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) (CO) requirement that when an offeror issues a printed application form, it must issue the application form with a printed prospectus.

            HKEX-GL81-15, FAQ No. 13
            LR reference: Main Board Rules 12.11A / GEM Rules 16.04D
            Released on 26/11/2010 (Updated in July 2015)

            Question:

            How should the offeror deal with the suspension of Mixed Media Offer during the offer period?

            Answer:

            When an offeror need to suspend a Mixed Media Offer during the offer period, it must publish a suspension announcement on the HKEX website as soon as possible. The offeror is encouraged to consult the SEHK and/or the SFC as soon as possible on how best to conduct the remaining offer process. The offer can only carry on if it can comply with the CO requirement that when an offeror issue a printed application form, it must issue the application form with a printed prospectus.

            HKEX-GL81-15, FAQ No. 14
            LR reference: Main Board Rules 12.11A / GEM Rules 16.04D
            Released on 26/11/2010 (Updated in July 2015)

            Question:

            Where are the conditions set out in the Class Exemption Notice?

            Answer:

            The class exemption is effected by Section 9A of the Companies (Exemption of Companies and Prospectuses from Compliance with Provisions) Notice (Cap.32L) (Class Exemption Notice) which came into effect on 1 February 2011. A copy of the Class Exemption Notice is set out in Appendix B to the Conclusions Paper.

            HKEX-GL81-15, FAQ No. 15
            LR reference: Main Board Rules 12.11A / GEM Rules 16.04D
            Released on 26/11/2010 (Updated in July 2015)

            Question:

            Does an offeror need to apply to the SFC or the Exchange to conduct an MMO?

            Answer:

            No, but a CO offeror must comply with the conditions in the Class Exemption Notice.

            A CIS offeror may inform the SFC of its intent to conduct an MMO and conduct the MMO by complying with similar conditions imposed by the SFC in its letter of authorisation.

            HKEX-GL81-15, FAQ No. 16
            LR reference: Main Board Rules 12.11A / GEM Rules 16.04D
            Released on 26/11/2010

            Question:

            Can the issuer's website contain information other than prospectus information?

            Answer:

            An issuer's website may contain information other than prospectus information, including promotional information about the issuer or the public offer. The issuer's website should clearly delineate in its website what information on its website is contained in the prospectus and what is not.

            Please refer to the responses to FAQ No. 9 under HKEX-GL81-15.

            HKEX-GL81-15, FAQ No. 17
            LR reference: Main Board Rules 12.11A / GEM Rules 16.04D
            Released on 26/11/2010

            Question:

            How is the notice requirement satisfied when the e-prospectus is accessed from the company's (issuer's) website?

            Answer:

            The notice should be given just before access to the prospectus is granted. For instance, a plain clear "pop up" notice on a separate webpage of the issuer's website stating that the relevant securities are offered solely on the information in the e-prospectus accessible by a click on the webpage satisfies this requirement.

            There are other ways to display the notice. In case of doubt, early consultation with the SFC or the Exchange is recommended.

            HKEX-GL81-15, FAQ No. 18
            LR reference: Main Board Rules 12.11A / GEM Rules 16.04D
            Released on 26/11/2010

            Question:

            How many printed prospectus copies must be made available to the public to satisfy the public demand requirement?

            Answer:

            The SFC and the Exchange do not set any the minimum number of copies of printed prospectus that must be made available to satisfy public demand.

            The CWUMPO and CIS offerors and their sponsors or listing agent should make a best estimate of the demand for printed form prospectus based on the facts and circumstances of the case.

            As a best practice recommendation, issuers and sponsors can consider stating in the notification announcement (made during the five-business day period before the start of the offer period) of an MMO details about how a member of the public may pre-register with the sponsor to obtain a printed prospectus during the offer period (e.g. by way of a hotline service) and where a copy may be obtained.

            HKEX-GL81-15, FAQ No. 19
            LR reference: Main Board Rule 12.11A / GEM Rule 16.04D
            Released on 26/11/2010 (Updated in July 2015)

            Question:

            Must announcements relating to the implementation and/or suspension of an MMO be vetted by the Exchange?

            Answer:

            No.

            HKEX-GL81-15, FAQ No. 21
            LR reference: Main Board Rules 12.11A(1), 25.19B(1) / GEM Rules 16.04D, 29.21B
            Released on 26/11/2010

          • Chapter 13

            View Current PDF

            Question:

            Should an issuer specify in its announcement relating to dividend payment whether such dividend is ordinary or special in nature? How should an issuer determine whether the declaration is ordinary dividend or special dividend?

            Answer:

            An issuer is required to announce any decision to declare, recommend or pay any dividend after approval by the board of directors. It would be desirable for an issuer to specify in the announcement whether the dividend is intended to be ordinary or special in nature because:

            •      the nature of dividend is relevant for shareholders to understand whether the dividend is a regular payment in accordance with the issuer’s dividend policy or it is a non-recurrent distribution in response to a special event; and
            •      classification of dividend as ordinary versus special will have a direct impact on pricing of derivative products as the terms of derivative products would require adjustments where the dividend is special in nature. A clear message on the dividend nature will help avoid market confusion in the derivative markets where derivative products (e.g. structured products, futures and/or options, etc.) are issued with the issuer’s shares as underlying stock.

            It is the issuer’s sole discretion to determine whether a dividend is ordinary or special in nature, subject to any provisions, if any, set out in its memorandum and articles of association or the laws or regulations of the place in which it is incorporated. An issuer should also seek its own legal advice on the matter where appropriate.

            In general, special dividend is a non-recurring distribution of corporate earnings and is often tied to specific events. In past cases, we note that some issuers paid special dividends to:

            •      return surplus cash to shareholders;
            •      distribute proceeds from disposal of assets or divestment of business; or
            •      reduce capital.

            The above list is not exhaustive. An issuer may decide to declare special dividends based on its own circumstances.

            FAQ No. 071-2020
            LR reference: Main Board Rules 13.45(1) / GEM Rules 17.49(1)
            Released on 17/04/2020

            Question:

            Included in the Headline Categories are:

            Clarification of News or Reports — Standard or Super,
            Clarification of News or Reports — Qualified
            Unusual Price/Turnover Movements — Standard or Super
            Unusual Price/Turnover Movements — Qualified

            What does "standard", "super" and "qualified" mean?

            Answer:

            1. "Standard" announcements are: 
            (a) announcements made at the request of the HKEx under Listing Rules MB 13.10(2) / GEM 17.11(2) in response to unusual movements in price or trading volume or the possible development of a false market in its securities, and in the announcement the issuer only provides negative confirmations required under Listing Rules MB 13.10(2) / GEM 17.11(2). The wording of these announcements should follow Note 1 to Listing Rules MB 13.10(2) / GEM 17.11(2); and
            (b) announcements made in response to media news and reports, announcements made to deny media news or reports, i.e. straight denial.

            For example, an issuer issues a denial in response to news articles simply stating that the rumour is untrue and has no substance. There would be no other information in the announcement.
            2. "Super" announcements are announcements which are similar to the standard announcements except for modifications made:
            (a) announcements made at the request of the HKEx under Listing Rules MB 13.10 / GEM 17.11 in response to unusual movements in price or trading volume or the possible development of a false market in its securities, and in the announcement the issuer only refers to its previously published information; and
            (b) announcements made in response to media news and reports, where the issuer clarifies that only its previously published information should be relied on.

            For example, an issuer issues a denial in response to certain news articles on a transaction or material business development. The issuer denies the content of the articles and states that there is no material development and refers to previously published information such as a circular or announcement of the issuer.
            3. "Qualified" announcements are:
            (a) announcements made at the request of the HKEx under Listing Rules MB 13.10(1) / GEM 17.11(1) in response to unusual movements in price or trading volume, disclosing information under the issuer's general disclosure obligation to which such movements are or may be attributable. These announcements may also, in certain circumstances, be issued pursuant to both Listing Rules MB 13.10(1) / GEM 17.11(1) and Listing Rules MB 13.09 / GEM 17.10 where they contain information necessary to avoid a false market or inside information which needs to be disclosed under the Inside Information Provisions; and
            (b) announcements made in response to media news and reports, where the information underlying the media news or report is inside information, indicating that the media news or reports is largely accurate and requiring disclosure under Listing Rules MB 13.09 / GEM 17.10.

            FAQ Series 3, FAQ No. 31
            LR reference: Main Board Rules 13.09, 13.10 / GEM Rules 17.10, 17.11
            Released on 22/3/2007 (Updated on 2/1/2013)

            Question:

            What are the procedures issuers should follow prior to the morning pre-opening trading session or the afternoon trading session in reviewing the publication status of its announcement and considering whether notifying the HKEx that a trading suspension may be required?

            Answer:

            The assessment of whether a trading halt or suspension will be required is based on the trading halt or suspension policy having regard to the two factors: nature of announcement and publication of the announcement on the HKEx website.

            Trading halt or suspension arising from publication failures will be required where the subject matter of the announcement is information necessary to avoid a false market in the issuer's securities or is inside information which needs to be disclosed under the Inside Information Provisions (Listing Rules MB 13.09 / GEM 17.10) or relates to a notifiable transaction and a trading halt or suspension is required under Listing Rules MB 14.37 / GEM 19.37. For pre-vetted announcements, this determination will be agreed with the Listing Division of the HKEx before clearance of the announcement. For post-vetted announcement, the issuer will make the assessment. In either case this assessment should be also generally reflected in the headline categories selected by the issuers.

            An issuer should take reasonable steps to gain comfort that publication of its announcement on the HKEx website has been successful. Such steps may include noting receipt of e-mail confirmation from HKEx and checking the HKEx website directly.

            Where, for whatever reason the publication of the announcement on the HKEx website is delayed (by reference to the trading halt or suspension policy above), the issuer should contact the Listing Division of the HKEx immediately and where appropriate, request a trading halt or suspension.

            FAQ Series 3, FAQ No. 144
            LR reference: Main Board Rules 13.09, 13.10A, 14.37 / GEM Rules 17.10, 17.11A, 19.37
            Released on 22/3/2007 (Updated on 2/1/2013)

            Question:

            What is the trading halt/ suspension policy applicable to Main Board and GEM issuers in respect of publication of announcements containing inside information and/or notifiable transactions?

            Answer:

            Trading in the securities of an issuer may be halted or suspended due to publication failure (i.e. to publish an announcement on HKEx websites) where the subject matter of the announcement is information discloseable under Listing Rules MB 13.09/ GEM 17.10 or relates to a notifiable transaction and trading halt or suspension is required under Listing Rules MB 14.37/ GEM 19.37. This is consistent with the principle set out in Chapter 6 of Main Board Rules/ Chapter 9 of GEM Rules on trading halts and suspensions, i.e. that halt or suspension is only required where the HKEx considers it necessary for the protection of the investor or the maintenance of an orderly market.

            Where an obligation to issue an announcement containing inside information has arisen for an issuer, it should publish the announcement during the next available publication window. For example, where the issuer has signed an agreement in relation to a notifiable transaction that is inside information after trading hours on a normal business day, and an announcement is published on the HKEx website by 8.30 a.m. of the next business day (i.e. either during the publication windows from 4.30 p.m. to 11.00 p.m. of that business day, or between 6.00 a.m. to 8.30 a.m. of the next business day), no trading halt or suspension would be necessary. Similarly, where an agreement is signed after the morning trading session and an announcement is published on the HKEx website between 12.00 noon to 12.30 p.m. of the same business day, no trading halt or suspension is necessary. In both circumstances where an announcement cannot be published before the next trading session, a halt or suspension in the trading of the issuer's securities would be required until commencement of the trading session (morning or afternoon) after the publication of the announcement. For example, where the announcement is published during the 12.00 noon to 12.30 p.m. publication window of the next business day, the issuer may apply for resumption of trading in its securities at 1.00 p.m.

            Where an issuer's obligation to publish an announcement relating to inside information is triggered during trading hours (for example, where confidentiality cannot be maintained and an obligation to publish an announcement on inside information arises under Listing Rule MB 13.09/ GEM 17.10 or in the circumstances described in Listing Rules MB 14.37 / GEM 19.37), the issuer should request a halt or suspension in trading of its securities, and publish an announcement as soon as possible during the next publication window. Resumption in trading of the issuer's securities may take place during the commencement of the next trading session after the publication of the announcement.

            A resumption announcement should clearly set out that an application will be made for resumption in the trading of securities and the expected time of resumption (i.e. at the commencement of the next trading session after the publication of the announcement).

            Issuers are reminded of their obligations to submit an announcement for clearance by the Exchange before publication where the subject matter of the announcement requires pre-vetting under the Listing Rules. Please refer to the Guide on Pre-vetting requirements and Selection of Headline Categories for Announcements at http://www.hkex.com.hk/eng/rulesreg/listrules/guidref/guide_pre_vetting_req.htm which sets out categories of announcements requiring pre-vetting.

            Issuers are also reminded that they should manage their affairs, particularly with regard to the signing of agreements, to ensure that there will be continuous and informed trading of their securities save in exceptional circumstances. It follows that, as far as practicable, issuers should seek to ensure that complex and lengthy announcements are disseminated as soon as possible during either the lunchtime publication window or outside trading hours to allow investors adequate time to consider the content of such disclosures.

            FAQ Series 3, FAQ No. 178
            LR reference: Main Board Rules Chapter 6, 13.09, 13.10A, 14.37 / GEM Rules Chapter 9, 17.10, 17.11A, 19.37
            Released on 22/3/2007 (Updated on 25/7/2016)

            Question:

            What is a "false market"?

            Answer:

            The term "false market" refers to a situation where there is material misinformation or materially incomplete information in the market which is compromising proper price discovery. This may arise, for example, where:

            (a) an issuer has made a false or misleading announcement;
            (b) there is other false or misleading information, including a false rumour, circulating in the market;
            (c) an issuer has inside information that needs to be disclosed under the Inside Information Provisions but it has not announced the information (e.g. the issuer signed a material contract during trading hours but has not announced the information); or
            (d) a segment of the market is trading on the basis of inside information that is not available to the market as a whole.

            Where a media or analyst report appears to contain information from a credible source (whether that information is accurate or not) and:

            (a) there is a material change in the market price or trading volume of the issuer's securities which appears to be referrable to the report (in the sense that it is not readily explicable by any other event or circumstance); or
            (b) if the market is not trading at the time but the report is of a character that when the market starts trading, it is likely to have a material effect on the market price or trading volume of the issuer's securities,
            the issuer must announce information necessary to avoid a false market in its listed securities.

            FAQ Series 22, FAQ No. 1
            LR reference: Main Board Rules 13.09(1), 13.10, 37.47(b); Paragraph 3 of Practice Note 11; Paragraph 2(1)(b) of Appendices 7C, 7D, 7E and 7H; Paragraph 24 of Appendix 7C; Paragraph 26 of Appendix 7H / GEM Rules 17.10(1), 17.11, 30.40(b), 31.04(2) and 31.05
            Released on 30/4/2013

            Question:

            Does an issuer need to "consult" the Exchange before announcing the information necessary to avoid a false market in its securities?

            Answer:

            No, it can proceed to disclose the information which requires disclosure under these provisions.

            However, it must contact the Exchange as soon as reasonably practicable if it believes that there is likely to be a false market in its listed securities (see the note to these provisions).

            FAQ Series 22, FAQ No. 2
            LR reference: Main Board Rules 13.09(1), 37.47(b); Paragraph 2(1)(b) of Appendices 7C, 7D, 7E and 7H / GEM Rules 17.10(1), 30.40(b) and 31.04(2)
            Released on 30/4/2013

            Question:

            Listco Z is a PRC issuer whose H shares are listed on the Main Board. It proposes to issue new A shares in the PRC and apply for a listing on a PRC stock exchange.

            Listco Z will issue a prospectus in connection with the issue of A shares pursuant to the laws and regulation in the PRC and the requirements of the PRC stock exchange. In this regard, Listco Z will publish an announcement under the Main Board Rule 13.09(2)(a) / GEM Rule 17.10(2)(a) to promptly disclose information which is identified as inside information during preparation of the A share prospectus or as a consequence of other development. Will Listco Z still need to publish the A-share prospectus on the HKEx website for the purposes of the Listing Rules?

            Answer:

            In addition to the disclosure obligation under Main Board Rule 13.09(2)(a) / GEM Rule 17.10(2)(a), Listco Z should also comply with Main Board Rule 13.10B / GEM Rule 17.12 to release the A-share prospectus to the market in Hong Kong through the HKEx website (in the form of an "overseas regulatory announcement") at the same time as it is released in other market(s).

            FAQ Series 7, FAQ No. 69
            LR reference: Main Board Rules 13.09(2), 13.10B / GEM Rules 17.10(2), 17.12
            Released on 28/11/2008 (Updated on 2/1/2013)

            Question:

            What is the meaning of the term "such enquiry with respect to the issuer as may be reasonable in the circumstances"? What sort of enquiry is an issuer required to make in response to the Exchange's enquiries?

            When will an issuer be expected to contact its controlling shareholders when they are not directors or officers of the issuer?

            Answer:

            The facts and circumstances giving rise to each enquiry are different. Therefore, what enquiry is reasonable depends on the circumstances, and there are no hard and fast rules. The test is one of reasonableness.

            To facilitate compliance, it is crucial that an issuer implements and maintains adequate and effective internal control systems and procedures to ensure material information concerning the issuer and its business would be promptly identified, assessed and escalated to the Board for consideration and action from a Rule compliance perspective. This would require a timely and structured flow to the Board of information arising from the development or occurrence of events and circumstances so that the Board can decide whether disclosure is necessary.

            An issuer is generally not expected to contact (a) its controlling shareholders when they are not directors or officers of the issuer, or (b) counterparties to a transaction, except if there is information available to the issuer suggesting that the subject matter of the enquiry is related to the controlling shareholders or the counterparties to a transaction. For example, the issuer is aware of its controlling shareholder's plan to dispose of its interest in the issuer, and there is an unusual increase in the trading volume of the issuer's shares. Another example is where there are press articles suggesting that the counterparty to a disclosed transaction may not be able to complete the transaction as a result of difficulties in obtaining financing.

            FAQ Series 22, FAQ No. 3
            LR reference: Main Board Rules 13.10(2); Paragraph 24(2) of Appendix 7C; Paragraph 26(2) of Appendix 7H / GEM Rules 17.11(2) and 31.05(2)
            Released on 30/4/2013

            Question:

            An issuer has inside information which is exempted from disclosure under one or more of the safe harbours in the Inside Information Provisions. If there are market rumours which are unrelated to this information, but have resulted in unusual trading movements, does the issuer need to publish a standard announcement?

            If the standard announcement states that there is no inside information that needs to be disclosed under the Inside Information Provisions, but the issuer subsequently discloses the information, say a month later, will this result in market uncertainty?

            Answer:

            Whether an announcement is required to be issued under these provisions depends on the facts and circumstances of the matter. It is only if and when requested by the Exchange that an announcement needs to be issued.

            Information that is exempted from disclosure under the Inside Information Provisions does not fall within the term "any inside information that needs to be disclosed under Part XIVA of the Securities and Futures Ordinance" contained in the standard announcement. Therefore, a standard announcement issued under those circumstances will not be inaccurate.

            To avoid market uncertainty arising from the subsequent disclosure of the inside information previously exempted from disclosure, the issuer can clarify in the disclosure announcement that the information was exempted from disclosure when the standard announcement was issued.

            FAQ Series 22, FAQ No. 4
            LR reference: Main Board Rules 13.10(2), Paragraph 24(2) of Appendix 7C, Paragraph 26(2) of Appendix 7H / GEM Rules 17.11(2) and 31.05(2)
            Released on 30/4/2013

            Question:

            Can I submit an Overseas Regulatory Announcement in both English and Chinese for publication?

            Answer:

            Yes. An Overseas Regulatory Announcement can be submitted for publication in both English and Chinese and both files should be submitted simultaneously. An Overseas Regulatory Announcement can also be submitted for publication in only one language i.e. either in English or in Chinese.

            FAQ Series 3, FAQ No. 56
            LR reference: Main Board Rules 2.07C(4)(b), 13.10B / GEM Rules 16.03, 17.12
            Released on 22/3/2007

            Question:

            Clarify what should be included in the numerator for the calculation of the asset test of the relevant advance?

            Answer:

            The numerator should be the total advances (not the interest earned) plus any monetary advantage accruing to the entity or affiliated company.

            FAQ Series 1, FAQ No. 22
            LR reference: Main Board Rules 13.13, 13.14, 13.16 / GEM Rules 17.15, 17.16, 17.18
            Released on 30/3/2004 (updated in February 2020)

            Question:

            When is the general disclosure obligation under Main Board Rule 13.14(GEM Rule 17.16) triggered for advances to an entity or affiliated company that have al been announced in accordance with Main Board Rule 13.13(GEM Rule 17.15)?

            Answer:

            Where there is any further increase in the advance previously announced in accordance with Main Board Rule 13.13 (GEM Rule 17.15), the issuer has to make a new announcement under Main Board Rule 13.14 (GEM Rule 17.16) if:

            •   the increased balance has exceeded the 8% threshold for the asset ratio; and
            •   the increase since the last announcement was made exceeds the 3% threshold for the asset ratio.

            FAQ Series 1, FAQ No. 25
            LR reference: Main Board Rules 13.13, 13.14 / GEM Rules 17.15, 17.16
            Released on 30/3/2004 (updated in February 2020)

            Question:

            Company A's controlling shareholder deposited the share certificate of his shares in Company A to a third party, or where he uses his interest in Company A's shares, for the purpose of securing Company A's performance of an obligation.

            Does any of the above scenarios constitute "pledging of shares" under the Listing Rules warranting an announcement under MB Rule 13.17 (GEM Rule 17.19)?

            Answer:

            Yes. MB Rule 13.17 (GEM Rule 17.19) applies to any arrangement, in any form and however the arrangement is named, where Company A's controlling shareholder effectively uses all or part of his interest in Company A's shares to, directly or indirectly, secure Company A's debts, or to secure guarantees or other support of Company A's obligations.

            FAQ Series N/A, FAQ No. 029-2018
            LR reference: Main Board Rules 13.17 / GEM Rules 17.19
            Released on 11/5/2018

            Question:

            For disclosure in the Next Day Disclosure Return pursuant to Main Board Rule 13.25A (GEM Rule 17.27A), which headline category should a listed issuer use when submitting a Next Day Disclosure Return to report a buyback of shares by the listed issuer?

            Answer:

            The listed issuer should choose the new Tier 2 headline category "Share Buyback" under the new Tier 1 headline category "Next Day Disclosure Returns". Where a disclosure other than a share buyback is made in the Next Day Disclosure Return, the listed issuer should choose the new Tier 2 headline category "Others" under the new Tier 1 headline category "Next Day Disclosure Returns". A listed issuer reporting in a Next Day Disclosure Return both a share buyback and some other type of change in its issued share capital should choose both "Share Buyback" and "Others".

            FAQ Series 8, FAQ No. 7
            LR reference: Main Board Rules 2.07C(3), 13.25A / GEM Rules 16.18(2), 17.27A
            Released on 28/11/2008

            Question:

            Where can an issuer find the templates of the various Monthly Returns and Next Day Disclosure Returns, and how to submit them?

            Answer:

            Templates of the various Monthly Returns and Next Day Disclosure Returns in MS Word format can be downloaded from the ESS website. The completed form, in either PDF or MS Word format, should then be submitted via ESS as an attachment.

            FAQ Series 8, FAQ No. 19
            LR reference: Main Board Rules 13.25A, 13.25B / GEM Rules 17.27A, 17.27B
            Released on 28/11/2008 (Updated in February 2020)

            Question:

            Are listed issuers required to submit both English and Chinese versions of Next Day Disclosure Returns and Monthly Returns?

            Answer:

            Yes.

            FAQ Series 8, FAQ No. 20
            LR reference: Main Board Rules 13.25A, 13.25B see also: 2.07C(4)(b) / GEM Rules 17.27A, 17.27B see also: 16.03
            Released on 28/11/2008

            Question:

            Can a listed issuer submit its Monthly Returns or Next Day Disclosure Returns by means other than ESS, such as email, fax or mail?

            Answer:

            No.

            FAQ Series 8, FAQ No. 21
            LR reference: Main Board Rules 13.25A, 13.25B / GEM Rules 17.27A, 17.27B
            Released on 28/11/2008

            Question:

            The issuer publishes a Next Day Disclosure Return upon a repurchase or redemption of shares in January. The repurchased or redeemed shares are cancelled in February. Must the issuer publish a Next Day Disclosure Return upon cancellation of the shares?

            Answer:

            No. On a share repurchase or redemption, the issuer must submit and publish a Next Day Disclosure Return by "not later than 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session" (i.e. by 8:30 a.m.) on the business day after the repurchase or redemption, even if the shares have not yet been cancelled. It is not necessary to publish another Next Day Disclosure Return when the shares are cancelled.

            However, the opening balance of the subsequent Next Day Disclosure Return will be the closing balance of the last Next Day Disclosure Return or Monthly Return (whichever is later) and any cancellation of shares since then should be included in the opening balance of the subsequent Next Day Disclosure Return as separate lines (together with the date(s) of cancellation). These cancelled shares should also be taken into account in arriving at the closing balance of that subsequent Next Day Disclosure Return.

            FAQ Series 8, FAQ No. 24
            LR reference: Main Board Rules 13.25A(2)(a)(vii) / GEM Rules 17.27A(2)(a)(vii)
            Released on 28/11/2008 (Updated on 11/3/2011)

            Question:

            Is section I of the Monthly Return (Movement in Authorised Share Capital) applicable to PRC issuers which do not have authorised share capital? Are PRC issuers required to disclose movements in domestic shares/ A shares in section II of their Monthly Return (Movements in Issued Share Capital)?

            Answer:

            No. Section I of the Monthly Return is not applicable to PRC issuers which do not have authorised share capital.

            Yes. PRC issuers are required to disclose in section II of the Monthly Return the movements in their H shares as well as any other classes of shares (e.g. domestic shares and A shares).

            FAQ Series 8, FAQ No. 26
            LR reference: Main Board Rules 13.25B / GEM Rules 17.27B
            Released on 28/11/2008 (Updated in February 2020)

            Question:

            Will listed issuers still be required to submit the Monthly Returns each month even if there are no changes of the reported figures from the previous month?

            Answer:

            Yes.

            FAQ Series 8, FAQ No. 27
            LR reference: Main Board Rules 13.25B / GEM Rules 17.27B
            Released on 28/11/2008

            Question:

            A listed issuer proposes to enter into an agreement with an independent third party under which the independent third party will provide advisory services to the issuer and the consideration will be satisfied by issuing new shares of the issuer to the third party. Is such issue subject to the disclosure requirements under Main Board Rule 13.28 / GEM Rule 17.30?

            Answer:

            The requirements under Main Board Rule 13.28 / GEM Rule 17.30 only apply to an issue of securities for cash.

            In the circumstances described, if the proposed issue of new shares constitutes inside information which requires disclosure under the Inside Information Provisions, the listed issuer must also simultaneously announce the information under Main Board Rule 13.09(2)(a) / GEM Rule 17.10(2)(a).

            FAQ Series 7, FAQ No. 70
            LR reference: Main Board Rules 13.28 / GEM Rules 17.30
            Released on 28/11/2008 (Updated on 2/1/2013)

            Question:

            A listed issuer proposes a placing of warrants, which carry rights to subscribe new shares in the listed issuer, for cash consideration under a specific mandate. The listed issuer will issue an announcement for such proposed placing pursuant to Main Board Rule 13.28 / GEM Rule 17.30. How should the listed issuer comply with the disclosure obligation under Main Board Rule 13.28 / GEM Rule 17.30?

            Answer:

            The disclosure obligation under Main Board Rule 13.28 / GEM Rule 17.30 arises at the time when the listed issuer agrees to issue securities for cash. As such, the listed issuer should issue an announcement as soon as it enters into the agreement for placing the warrants. The Rule does not apply upon exercise of the subscription rights of the warrants by the warrant holders. However, the listed issuer is reminded of the disclosure obligations under Main Board Rules 13.25A, 13.25B and 13.25C / GEM Rules 17.27A, 17.27B and 17.27C.

            FAQ Series 8, FAQ No. 29
            LR reference: Main Board Rules 13.28; see also: 13.25A, 13.25B, 13.25C / GEM Rules 17.30; see also: 17.27A, 17.27B, 17.27C
            Released on 28/11/2008 (Updated in February 2020)

            Question:

            How should issuers whose shares have no nominal value comply with the disclosure requirements for nominal values under the Rules?

            Answer:

            These issuers should disclose in the relevant announcements or annual reports that their shares have no nominal value.

            FAQ Series 26, FAQ No. 1
            LR reference: Main Board Rules 13.28(2), App 16 (para 11(3)) / GEM Rules 17.30(2), 18.32(3)
            Released on 21/2/2014

            Question:

            A listed issuer proposes a placing of new shares for cash consideration using its general mandate.

            What "details of the general mandate" is the issuer required to disclose in the announcement under Main Board Rule 13.28(12) (GEM Rule 17.30(12))?

            Answer:

            It should disclose the date of the general meeting approving the general mandate; and information that demonstrates the general mandate is sufficient to cover the number of new shares to be issued under the placing, such as: (i) the number of shares that the listed issuer is authorised to allot or issue under such general mandate; and (ii) the unutilised portion of the general mandate immediately prior to the proposed placing.

            FAQ Series 8, FAQ No. 30
            LR reference: Main Board Rules 13.28(12) / GEM Rules 17.30(12)
            Released on 28/11/2008 (Updated in February 2020)

            Question:

            If a listed issuer proposes to place new shares under a general mandate at a discount of 20% or more to the benchmarked price, can it satisfy Main Board Rule 13.29 (GEM Rule 17.30A) by incorporating the information required in its announcement published pursuant to Main Board Rule 13.28 (GEM Rule 17.30)?

            Answer:

            Yes, or alternatively it may issue a separate announcement to disclose the information required under Main Board Rule 13.28 (GEM Rule 17.30). In either case, the required information must be announced within the timeframe prescribed under Main Board Rule 13.29 (GEM Rule 17.30A).

            The listed issuer is reminded that, under Main Board Rule 13.36(5) (GEM Rule 17.42B), it cannot issue new shares for cash under a general mandate at a discount of 20% or more to the benchmarked price set out in Main Board Rule 13.36(5) (GEM Rule 17.42B) unless it can satisfy the Exchange that it is in a serious financial position or there are exceptional circumstances. In the present case, the listed issuer must obtain the Exchange's consent before it enters into the proposed placing and publishes the relevant announcement.

            FAQ Series 8, FAQ No. 31
            LR reference: Main Board Rules 13.29 / GEM Rules 17.30A
            Released on 28/11/2008

            Question:

            In the case of an H-share issuer whose domestic shares are quoted on NEEQ, will the Exchange count any domestic shares held by public shareholders as part of the issuer’s public float under Rules 8.08 and 13.32?

            Answer:

            No. In this case, only listed H-shares held by members of the public are counted towards the issuer’s public float under the Rules.

            For the avoidance of doubt, when calculating the percentage of public float, the total number of issued shares of the issuer (i.e. denominator) refers to all classes of shares in issue including H shares and domestic shares.

            FAQ Series N/A, FAQ No. 068-2019
            LR reference: Main Board Rules 8.0813.32 / GEM Rule 11.23(7)
            Released on 30/09/2019

            Question:

            A listed issuer proposes a rights issue of shares which will be fully underwritten by its controlling shareholder. Based on the size of the proposed rights issue, it is possible that if no qualifying shareholders take up their entitlement of rights shares, the controlling shareholder's interest in the listed issuer would increase to the extent that the public float of the listed issuer would fall below the minimum percentage required under the Listing Rules. 

            Will the listed issuer be permitted to proceed with the rights issue?

            Answer:

            It is the responsibility of the listed issuer to ensure compliance with its continuing obligations under the Listing Rules from time to time, particularly when it proposes any corporate actions.

            In the circumstances described, the listed issuer must demonstrate to the Exchange's satisfaction that there are adequate arrangements in place to ensure that the proposed rights issue, if it proceeds, would not result in a breach of the public float requirement set out in the Listing Rules. An example of an acceptable arrangement would be for a conditional placing agreement to be entered into by the controlling shareholder to place down a sufficient amount of its shares in the listed issuer to independent third parties in order to maintain the public float at or above the minimum prescribed percentage set out in the Listing Rules.

            FAQ Series 7, FAQ No. 71
            LR reference: Main Board Rules 13.32(1) / GEM Rules 11.23(7)
            Released on 28/11/2008

            Question:

            Company I proposes to acquire a property from one of its directors, which constitutes a discloseable and connected transaction. The consideration for the proposed acquisition will be settled by issuing new shares of Company I to the vendor.

            No shareholder is required to abstain from voting if Company I were to convene a general meeting for the approval of the proposed acquisition. Company I has obtained the written approval of the transaction from its parent company holding 60% interest in Company I.

            Will the Exchange grant a waiver to Company I from convening a general meeting to approve the connected transaction pursuant to Main Board Rule 14A.37 / GEM Rule 20.35? Can Company I issue the consideration shares using the existing general mandate?

            Answer:

            As Company I is able to meet all the conditions set out in Main Board Rule 14A.37 / GEM Rule 20.35, a waiver from convening a general meeting to approve the proposed acquisition would normally be granted to Company I for the purpose of connected transaction rules.

            On the basis that Company I has obtained independent shareholder approval for the proposed acquisition, and the method of settling the consideration was clearly disclosed and not subject to amendment, Company I would be permitted to issue the consideration shares to the vendor pursuant to a general mandate according to Note 1 to Main Board Rule 13.36(2)(b) / the Note to GEM Rule 17.41(2).

            FAQ Series 7, FAQ No. 53
            LR reference: Main Board Rules 14A.37, 13.36 / GEM Rules 20.35, 17.39, 17.41
            Released on 28/11/2008 (Updated on 1/7/2014)

            Question:

            When Eligible SEHK Issuers and Other Connect Issuers propose pre-emptive issues (including rights issues, open offers, bonus issues and scrip dividend schemes) or distributions in specie to shareholders, should they offer or distribute entitlement securities to Mainland investors holding the issuers' securities through Shanghai and Shenzhen Connect ("Southbound Shareholders")?

            Answer:

            Yes.

            FAQ Series 29, FAQ No. 1
            LR reference: Main Board Rules 13.36
            Released on 14/11/2014 (Updated on 13/07/2018)

            Question:

            Rule 13.36(2) states that an issuer may exclude overseas shareholders from a rights issue/open offer if, having made enquiries regarding the legal restrictions under the laws of the relevant place and the requirements of the relevant regulatory body or stock exchange, the directors of the issuer consider such exclusion to be necessary or expedient. Can Southbound Shareholders be excluded from participation in rights issues/open offers made by Eligible SEHK Issuers and Other Connect Issuers?

            Answer:

            No. Based on the CSRC Announcement [2016] No. 21 "Filing Requirements for Hong Kong Listed Issuers Making Rights Issues to Mainland Shareholders through Mainland-Hong Kong Stock Connect" which sets out the procedure for the filing of rights issue/open offer prospectus documents of Eligible SEHK Issuers and Other Connect Issuers, the Listing Department does not consider that Eligible SEHK Issuers and Other Connect Issuers have grounds to exclude the Southbound Shareholders from participation in the rights issues/open offers.

            Rule 2.03 sets out the general principle expected to be upheld by issuers, and requires that (i) all holders of listed securities should be treated fairly and equally; and (ii) all new issues of equity securities by a listed issuer should first be offered to the existing shareholders by way of rights unless they have agreed otherwise. This rule seeks to secure for holders of securities equality of treatment. Accordingly, on the basis of Rule 13.36, an Eligible SEHK Issuer or Other Connect Issuer failing to make its rights issue/open offer available to the Southbound Shareholders will not be granted an approval for the listing of the rights/open offer shares by the Listing Department under Rule 2A.06.

            FAQ Series 29, FAQ No. 3
            LR reference: Main Board Rules 2.03, 13.36(2)
            Released on 14/11/2014 (Updated on 13/07/2018)

            Question:

            What are the additional considerations for Eligible SEHK Issuers and Other Connect Issuers if the securities to be offered or distributed to shareholders in the above corporate actions are not eligible for trading under Shanghai and Shenzhen Connect?

            Answer:

            The scope of securities eligible for southbound trading under the Shanghai and Shenzhen Connect (Eligible Securities) is set out in http://www.hkex.com.hk/eng/market/sec_tradinfra/chinaconnect/Eligiblestock.htm1.

            Southbound Shareholders may receive different types of securities from SEHK Eligible Issuers and Other Connect Issuers as entitlements under pre-emptive issues or distributions (e.g. warrants or convertible securities of the issuers, or shares of other entities):

            •   if the entitlement securities are not Eligible Securities but are listed on SEHK, Southbound Shareholders may sell them on SEHK through Shanghai and Shenzhen Connect, but they will not be allowed to buy such securities2; and
            •   if the entitlement securities are not listed on SEHK, Southbound Shareholders will not be allowed to buy or sell the securities on SEHK. HKSCC and ChinaClear will determine how to deal with the securities subscribed or received by Southbound Shareholders on an individual case basis2.

            Issuers are reminded of their obligation to treat all shareholders fairly and equally when they propose to offer or distribute securities to shareholders. They should consider making the following arrangements3:

            •   providing all shareholders with an option to receive their entitlements in cash rather than securities; and
            •   if the entitlement securities are not to be listed, offering a means for the shareholders to dispose of these securities.

            Issuers should also make clear disclosures in their corporate communications about actions their shareholders need to take in respect of the offered/distributed securities.

            Note
            1: The list contains securities eligible for both buy and sell through Shanghai and Shenzhen Connect.
            2: See Article 77 of SSE Stock Connect Pilot Provisions 《上海證券交易所滬港通試點辦法》, Article 76 of SZSE Stock Connect Implementation Rules 《深圳證券交易所深港通業務實施辦法》, and Article 24 of ChinaClear Stock Connect Implementation Rules
            3: See the "Guide on distribution of dividends and other entitlements" published on the HKEX website

            FAQ Series 29, FAQ No. 4
            LR reference: Main Board Rules 2.03, 13.36(2)
            Released on 14/11/2014 (Updated on 13/07/2018)

            Question:

            Is an overseas legal opinion is required in the event that a proposed bonus issue of issue of warrants will exclude overseas shareholders?

            Answer:

            No. Note 1 to Main Board Rule 13.36(2)(a)(GEM Rule 17.41(1) only requires the issuer make enquiry regarding the legal restrictions under the laws of the relevant jurisdiction. It is up to the issuer to decide whether or not it should obtain a legal opinion to support its analysis of the Rules.

            FAQ Series 1, FAQ No. 28
            LR reference: Main Board Rules 13.36(2)(a) / GEM Rules 17.41(1)
            Released on 30/3/2004 (Updated in February 2020)

            Question:

            A listed issuer proposes a bonus issue of warrants to its existing shareholders on a pro-rata basis.

            Main Board Rule 13.36(2)(a) / GEM Rule 17.41(1) provides that no shareholders' approval is required for an offer of securities to shareholders on a pro-rata basis. Can the listed issuer apply this rule in respect of its proposed bonus issue of warrants?

            Answer:

            The circumstances described involves issue of warrants and the listed issuer must also comply with Main Board Rule 15.02 / GEM Rule 21.02 which requires that all warrants must be approved by shareholders in general meeting unless they are issued by the directors under the authority of a general mandate granted to them by shareholders in accordance with Main Board Rule 13.36(2)/ GEM Rule 17.41(2).

            Accordingly, the listed issuer must have sufficient headroom under its general mandate to issue the bonus warrants, and if not shareholders' approval in a general meeting will be required.

            FAQ Series 7, FAQ No. 65
            LR reference: Main Board Rules 15.02, 13.36(2)(a) / GEM Rules 21.02, 17.41(1)
            Released on 28/11/2008

            Question:

            Are there new PRC requirements for Eligible SEHK Issuers and Other Connect Issuers to offer or distribute securities to Southbound Shareholders in the above corporate actions?

            Answer:

            (a) Rights issues and open offers

            Yes. The China Securities and Regulatory Commission (CSRC) has issued the Announcement [2016] No. 21 "Filing Requirements for Hong Kong Listed Issuers Making Rights Issues to Mainland Shareholders through Mainland-Hong Kong Stock Connect". The document sets out the requirements for Eligible SEHK Issuers and Other Connect Issuers offering securities to their Southbound Shareholders in rights issues / open offers (see also question 3 below).

            Issuers should also note that under Shanghai and Shenzhen Connect, China Securities Depository and Clearing Corporation Limited (ChinaClear) will provide nominee services for Southbound Shareholders to (i) sell their nil-paid rights on SEHK; and/or (ii) subscribe for their entitlement securities under the rights issues / open offers in accordance with relevant laws and regulations. However, it will not support excess applications by Southbound Shareholders through Shanghai and Shenzhen Connect1.

            Note 1: See Article 23 of ChinaClear's Implementing Rules for Registration, Depository and Clearing Services under the Mainland-Hong Kong Stock Connect (ChinaClear Stock Connect Implementing Rules) 中國證券登記結算有限責任公司《內地與香港股票市場交易互聯互通機制登記、存管、結算業務實施細則》
            (b) Bonus issues, scrip dividend schemes and distributions in specie

            No rules or guidance has been published by the CSRC.

            FAQ Series 29, FAQ No. 2
            LR reference: Main Board Rules Chapter 7, 13.36(2)(a) Note 1
            Released on 14/11/2014 (Updated on 13/07/2018)

            Question:

            Is there any limit on the number of refreshments of the general mandate during a year? How is the "one year" determined — from refreshment of the general mandate or with reference to annual general meetings?

            Answer:

            No. There is no limit on the number of refreshments of the general mandate by Main Board and GEM issuers during a year. However, independent shareholders' approval is required for the second and subsequent refreshments during the year.

            The period of "one year" is a rolling one year period normally determined with reference to annual general meetings when a new mandate for the year is obtained.

            FAQ Series 1, FAQ No. 30
            LR reference: Main Board Rules 13.36(2)(b) / GEM Rules 17.41(2)
            Released on 30/3/2004

            Question:

            A listed issuer proposes a resolution to seek shareholders' approval for a bonus issue of shares to its existing shareholders pursuant to its articles of association at the forthcoming annual general meeting.

            Can the listed issuer take into account such bonus issue when determining the maximum number of shares that are allowed to be issued under a new general mandate proposed at the same general meeting?

            Answer:

            No, because the bonus shares are not yet issued at the time when the listed issuer seeks shareholders' approval for the new general mandate. Pursuant to Main Board Rule 13.36(2)(b) / GEM Rule 17.41(2), the maximum number of shares that may be issued under the general mandate is "(i) 20% of the number of issued shares of the issuer as at the date of the resolution granting the general mandate... plus the number of such securities repurchased by the issuer itself since the granting of the general mandate (up to a maximum number equivalent to 10% of the number of issued shares of the issuer as at the date of the resolution granting the repurchase mandate)...".

            FAQ Series 7, FAQ No. 61
            LR reference: Main Board Rules 13.36(2)(b) / GEM Rules 17.41(2)
            Released on 28/11/2008 (Updated April 2015)

            Question:

            Mr. A is a director of Listco. Under his director service contract, he may be entitled to receive share awards to be granted under Listco's share award scheme.

            Can Listco apply the directors' service contract exemption under Rule 14A.95 if the share awards are granted to Mr. A in form of new shares of Listco?

            Answer:

            No. Transactions or arrangements involving issuance of new shares by a listed issuer to its connected persons are exempt from the connected transaction Rules only if they fall under the circumstances described in Rule 14A.92. Therefore, the grant of share awards in form of new shares to Mr. A will be subject to the announcement, reporting and shareholder approval requirements under Chapter 14A.

            FAQ Series 28, FAQ No. 20
            LR reference: Main Board Rules 14A.95, Note 1 to 13.36(2)(b) / GEM Rules 20.93, Note to 17.41(2)
            Released on 21/3/2014

            Question:

            Company A is the substantial shareholder of a subsidiary of Listco. It is a connected person of Listco at the subsidiary level.

            Listco proposes to place new shares for cash to Company A. Can Listco apply the exemption for transactions with connected persons at the subsidiary level under Rule 14A.101 to exempt the proposed placing from the independent shareholder approval requirement under Chapter 14A?

            Answer:

            No. Transactions or arrangements involving issuance of new shares by a listed issuer to its connected persons are exempt from the connected transaction Rules only if they fall under the circumstances described in Rule 14A.92. As Company A is a connected person of Listco, the issue of new shares of Listco to it will be subject to the announcement, reporting and shareholder approval requirements under Chapter 14A.

            FAQ Series 28, FAQ No. 21B
            LR reference: Main Board Rules 14A.92, 14A.101, Note 1 to 13.36(2)(b) / GEM Rules 20.90, 20.99, Note to 17.41(2)
            Released on 29/5/2015

            Question:

            Listco proposes to issue new shares to Mr. A as the consideration for an acquisition of assets from Mr. A.

            Mr. A is a director of certain insignificant subsidiaries of Listco. If Mr. A meets the conditions for the significant subsidiary exemption under Rule 14A.09 at the time of the proposed transaction, is the transaction subject to the connected transaction requirements under Chapter 14A?

            Answer:

            As Mr. A is not a connected person of Listco, the proposed transaction is not a connected transaction under Chapter 14A.

            FAQ Series 28, FAQ No. 21C
            LR reference: Main Board Rules 14A.09, Note 1 to 13.36(2)(b) / GEM Rules 20.08, Note to 17.41(2)
            Released on 29/5/2015

            Question:

            When a listed issuer refreshes the General Property Acquisition Mandate at a general meeting, does the controlling shareholder have to abstain from voting as in the case of refreshing a general mandate under Main Board Rule 13.36(4)(a) (GEM Rule 17.42A)?

            Answer:

            No. Main Board Rule 13.36(4)(a) (GEM Rule 17.42A) is not applicable to the refreshment of the General Property Acquisition Mandate.

            FAQ Series 8, FAQ No. 32
            LR reference: Main Board Rules 13.36(4)(a) / GEM Rules 17.42A
            Released on 28/11/2008

            Question:

            Please explain the top-up arrangement under refreshment of general mandate.

            Answer:

            An issuer wishing to top-up the unused portion of their previous general mandate, based on the enlarged issued share capital, needs only to obtain shareholders' approval. They can top up to the number of shares so that, in percentage terms, the unused part of the general mandate before and after the pre-emptive issue of securities is the same.

            Example:

            Existing issued share capital : 100,000 shares

            General mandate before placing: 20,000 shares (20%)

            Placing of shares under the general mandate: 5,000 shares

            Issued share capital after placing: 105,000 shares

            Unused general mandate: 15,000 shares (15% of 100,000 shares)

            New shares issued under a 1 for 2 rights issue: 52,500 shares

            Issued share capital after right issue: 157,500 shares

            Shareholders' approval will be required to top-up the general mandate from 15,000 to 23,625 shares (15% of 157,500 shares). Independent shareholders' approval will be required for an additional mandate for 7,875 shares (i.e. 5% of 157,500 shares).

            FAQ Series 1, FAQ No. 31
            LR reference: Main Board Rules 13.36(4)(e) / GEM Rules 17.42A(5)
            Released on 30/3/2004

            Question:

            A listed issuer proposes to enter into an agreement with one of its creditors under which the listed issuer agree to issue new shares for the repayment of a loan due to the creditor.

            The listed issuer intends to issue the new shares under a general mandate. Is such issue subject to the restriction on pricing of the new shares to be issued under general mandate set out Main Board Rule 13.36(5) / GEM Rule 17.42B?

            Answer:

            Yes. The proposal is in substance an issue of new shares for cash consideration. The listed issuer must ensure that the issue price of such new shares complies with the requirement of Main Board Rule 13.36(5) / GEM Rule 17.42B before it enters into the agreement.

            FAQ Series 7, FAQ No. 63
            LR reference: Main Board Rules 13.36(5) / GEM Rules 17.42B
            Released on 28/11/2008

            Question:

            A listed issuer, whose shares are al listed on the Exchange, proposes to raise funds through placing of warrants that allow subscription of new shares of the issuer. As the warrants represent a new class of equity securities of the listed issuer, how should the listed issuer comply with the pricing requirement under Main Board Rule 13.36(5) / GEM Rule 17.42B in respect of such placing of securities for cash?

            Answer:

            The listed issuer should demonstrate that the issue price of the warrants and the subscription price payable upon exercise of the warrants in aggregate would not represent a discount of 20% or more to the benchmarked price of the shares set out in Main Board Rule 13.36(5) / GEM Rule 17.42B.

            FAQ Series 7, FAQ No. 64
            LR reference: Main Board Rules 13.36(5) / GEM Rules 17.42B
            Released on 28/11/2008

            Question:

            Are there any examples of procedural and administrative matters?

            Answer:

            Procedural and administrative matters include, for example, adjourning a meeting by resolution to:

            (a) ensure orderly conduct of the meeting. (e.g. if the meeting facilities to house the number of members attending has become inadequate); or
            (b) maintain the orderliness of the meeting, e.g. if it becomes impossible to ascertain the views of the members, or there is disorder or threat of disorder from members or if there is a disturbance caused by members or the uninvited public; or
            (c) respond to an emergency such as a fire, a serious accident or hoisting of tropical cyclone warning signal No. 8 during a meeting; or
            (d) announce results at the end of the annual general meeting.

            FAQ Series 17, FAQ No. 14
            LR reference: Main Board Rules Note to Rule 13.39(4) / GEM Rules Note to Rule 17.47(4)
            Released on 19/12/2011

            Question:

            Should the independent board committee established under Main Board Rules 13.39(6)(a) and 14A.41/ GEM Rules 17.47(6)(a) and 20.39 comprise all independent non-executive directors of the listed issuer?

            Answer:

            The independent board committee should comprise all independent non-executive directors of the listed issuer, who have no material interest in the relevant transaction.

            FAQ Series 7, FAQ No. 42
            LR reference: Main Board Rules 13.39(6)(a) and (c), 14A.41 / GEM Rules 17.47(6)(a) and (c), 20.39
            Released on 28/11/2008 (Updated on 1/7/2014)

            Question:

            What is the procedure regarding the notification of board meetings?

            Answer:

            Issuers are required to inform HKEx and publish an announcement through the e-Submission System at least seven clear business days in advance of the date fixed for any board meeting at which the declaration, recommendation or payment of a dividend is expected to be decided or at which any announcement of the profits or losses for any year, half-year or other period is to be approved for publication. The announcement does not require publication in the newspapers. It must be published on the HKEx website and on the issuer's own website.

            FAQ Series 3, FAQ No. 12
            LR reference: Main Board Rules 13.43 / GEM Rules 17.48
            Released on 22/3/2007 (Updated on 7/3/2011)

            Question:

            A listed company has published an announcement on the board meeting date to approve its annual results 7 clear business days before the board meeting.

            If the listed company subsequently decides to postpone the board meeting to a later date, is it required to give another 7-day notice?

            Answer:

            Subject to its articles of association, the listed company does not need to give another 7-day notice. However, it should, as soon as practicable, announce the postponement of board meeting and the revised board meeting date.

            FAQ Series 17, FAQ No. 14A (Previously published in FAQ Series 9 No.25)
            LR reference: Main Board Rules 13.43 / GEM Rules 17.48
            Released on 14/12/2009 (Updated on 28/12/2018)

            Question:

            If a director is a shareholder of the issuer, should the director abstain from voting when the board considers dividend payments?

            Answer:

            No.  In cases where a director’s interest is the same as all shareholders (e.g. approving dividend payments), then the director does not need to abstain from voting.

            FAQ Series 17, FAQ No. 15
            LR reference: Main Board Rules 13.44 / GEM Rules 17.48A
            Released on 19/12/2011 (Last updated on 01/01/2022)

            Question:

            If a director has a material interest in a board resolution approving a transaction concerning another company, but does not have any beneficial interest in the shares of that company, should the director abstain from voting on the relevant resolution?

            Answer:

            Yes. As long as the director has a material interest in the transaction, the director should abstain from voting, even if the director has no beneficial interest in the shares of the other company.

            FAQ Series 17, FAQ No. 15A
            LR reference: Main Board Rules 13.44 / GEM Rules 17.48A
            Released on 19/12/2011 (Last updated on 01/01/2022)

            Question:

            Is it acceptable for an issuer to simply comply with this Rule without amending its memorandum and articles of association (to remove the exception for a director voting on a resolution in which the individual has a less than 5% interest) (note) until further substantial changes are required to be made to the documents?

            Note: this exception was provided in paragraph 3 of Note 1 to the old Appendix 3 (that was in force before 31 December 2021), which was subsequently repealed on 1 January 2022.

            Answer:

            Yes, an issuer does not need to amend its constitutional document as a result of this Rule amendment. However, to comply with Main Rule 13.44 (GEM Rule 17.48A), the issuer is reminded that a director might have a material interest in a transaction with a company even if he was interested in less than 5% of that company’s issued shares or voting rights.

            FAQ Series 17, FAQ No. 15B
            LR reference: Main Board Rules 13.44 / GEM Rules 17.48A
            Released on 19/12/2011 (Updated on 01/01/2022)

            Question:

            How soon after a Board Meeting is held to approve preliminary announcements of financial results and/or dividends do the results have to be published?

            Answer:

            Under Listing Rules MB 13.45/ GEM 17.49, an issuer must publish any preliminary results announcement immediately after approval by the Board. Preliminary results that have been approved at a board meeting in the morning of a business day should be submitted for publication via the e-Submission System during the lunchtime publication window between 12.00 noon and 12.30 p.m. on a normal business day, or between 12.30 p.m. and 11.00 p.m. on the eves of Christmas, New Year and the Lunar New Year when there is no afternoon session.

            Where the listed issuer expects that it would not be in a position to publish the preliminary results announcement during the lunchtime publication window on a normal business day, it should consider holding the board meeting in the afternoon so that the preliminary results announcement may be published after 4.30 p.m. on that business day, or failing that, between 6.00 a.m. and 8.30 a.m. on the following business day at the latest.

            The directors have the direct responsibility to ensure that the information is kept strictly confidential until it is announced.

            FAQ Series 3, FAQ No. 72
            LR reference: Main Board Rules 13.45 / GEM Rules 17.49
            Released on 22/3/2007 (Updated on 25/7/2016)

            Question:

            How soon after the holding of the board meeting approving preliminary results can a press conference be held?

            Answer:

            Under the Listing Rules, the release of information by way of a formal announcement via the HKEx website is regarded as the formal channel of communication with the investing public. Listed issuers should manage the release of their financial results in accordance with these principles and requirements. Under Note 1 to Listing Rules MB 13.45/ GEM 17.49, issuers' directors have the direct responsibility to ensure that the information is kept strictly confidential until it is announced. The preliminary results announcement needs first to have been published on the HKEx website before a press conference / analyst meeting can be held and one has to allow reasonable time from the time of submission for the announcement to be uploaded and published on the HKEx website. The listed issuer should also have proper procedures in place to ensure that this is the case.

            Listed issuers should take all reasonable steps to keep the preliminary results confidential before it is announced. What would amount to all reasonable steps would depend on the particular circumstances prevailing. As general guidance we recommend that listed issuers take steps, including but not limited to the following:

            •   measures to ensure the timely delivery of the announcement to HKEx upon market close and immediately after the board meeting;
            •   planned timetable that would allow reasonable processing time for HKEx to upload the announcement prior to press conference/analyst meetings; and
            •   measures that would safeguard the accuracy and content of the announcement (including virus free soft copies files).

            Preliminary results announcements must be published, without delay, during time periods permitted on a business day by Listing Rules MB 2.07C(4)(a) and GEM 16.18(3)(a).

            FAQ Series 3, FAQ No. 73
            LR reference: Main Board Rules 13.45 / GEM Rules 17.49
            Released on 22/03/2007 (Updated on 01/05/2015)

            Question:

            After 4.30 p.m. on a normal business day, can a press conference be held even though the preliminary results announcement has not yet been published?

            Answer:

            No. Note 1 to Listing Rule MB 13.45/ GEM 17.49 sets out specific requirements for listed issuers after board meetings for approval of results and dividends:

            "...The directors are reminded that it is their direct responsibility to ensure that such information is kept strictly confidential until it is announced."

            Under the Listing Rules, the release of information by way of a formal announcement via the HKEx website is regarded as the formal channel of communication with the investing public. Listed issuers should manage the release of their financial results in accordance with these principles and requirements. Listed issuers should therefore release formal announcements before the dissemination of financial results at the press conference / analyst meeting.

            FAQ Series 3, FAQ No. 76
            LR reference: Main Board Rules 13.45 / GEM Rules 17.49
            Released on 22/3/2007 (Updated on 25/7/2016)

            Question:

            If I submit a preliminary results announcement for publication, would it be sufficient to select only one headline category, e.g. "Final Results"?

            Answer:

            In addition to "Final Results", all appropriate headline categories must be selected, such as dividend, closure of books, and change in directors. If the auditors have issued a modified report, the headline category "Modified Report by Auditors" must also be selected.

            Issuers should not include in the preliminary results announcements information of a nature that would require pre-clearance under the Listing Rules.

            FAQ Series 3, FAQ No. 77
            LR reference: Main Board Rules 2.07C(3), 13.45(3), Appendix 24 / GEM Rules 16.18, 17.49(3), Appendix 17
            Released on 22/3/2007 (Updated on 1/3/2019)

            Question:

            An issuer has a financial year end date of 31 March. When submitting its interim report for the six months ended 30 September 20x7 and annual report for the year ended 31 March 20x8 for publication on the HKEX website, what titles should it use in the designated free-text fields?

            Answer:

            The title of a document should be precise and meaningful to give readers a quick understanding of the relevance and importance of the information disclosed in the document. See No. 7 of FAQ Series 27.

            The title for the issuer’s interim report should be:

            (a) “Interim report for the six months ended 30 September 20x7”; or
            (b) “20x7/x8 interim report”.

            The title for the issuer’s annual report should be:

            (a) “Annual report for the year ended 31 March 20x8”; or
            (b) “20x7/x8 annual report”.

            Issuers with financial year end dates other than 31 December should follow this guidance.

            FAQ Series 27, FAQ No. 8
            LR reference: Main Board Rules 2.07C(3), 13.46, 13.48 / GEM Rules 16.18(2), 18.03, 18.53
            Released on 7/12/2018

            Question:

            What are the disclosure requirements under Section 436 of the New Companies Ordinance for a Hong Kong incorporated issuer in relation to the publication of non-statutory accounts in its:

            (a) Annual/interim results announcement; and
            (b) interim report, quarterly results announcement / financial report, circulars or listing documents?

            Answer:

            The issuer must include a statement indicating that the statement of comprehensive income for a full financial year and/or the statement of financial position at a financial year end (the "Statements") presented in the account are not statutory financial statements under the New Companies Ordinance. The issuer must also disclose whether (i) an auditor's report had been prepared; and (ii) the auditors gave a qualified or modified audit opinion on the Statements.

            For details, please refer to Accounting Bulletin 6 "Guidance on the Requirements of Section 436 of the Hong Kong Companies Ordinance Cap.622" issued by Hong Kong Institute of Certified Public Accountants at: https://www.hkicpa.org.hk/-/media/HKICPA-Website/Members-Handbook/volumeII/ab6.pdf

            FAQ Series 31, FAQ No. 13
            LR reference: Main Board Rules 13.48, 13.49(1), 13.49(6), 14.66 to 14.69, 11.03 & 11.04, 11.16 to 11.19, 14.61 & 14.62, 4.25 to 4.29 / GEM Rules 18.49, 18.53, 18.66, 18.78, 18.79, 19.66 to 19.69, 14.03 & 14.06, 14.29 to 14.31, 19.61 & 19.62, 7.27 to 7.31
            Released on 11/9/2015 (Updated the hyperlink to Accounting Bulletin 6 in October 2019) (Updated in February 2020)

            Question:

            A listed issuer proposes to seek shareholders' approval for certain amendments to its articles of association.

            Main Board Rule 13.51(1) / GEM Rule 17.50(1) requires the listed issuer to submit a confirmation from its legal advisers that the proposed amendments comply with the requirements of the Exchange Listing Rules and the laws of the place where it is incorporated or otherwise established.

            The Rule also requires the listed issuer to confirm that there is nothing unusual about the proposed amendments for a company listed in Hong Kong. Is the listed issuer required to obtain a legal opinion in this regard?

            Answer:

            With respect to the listed issuer's confirmation that there is nothing unusual about the proposed amendments to its articles of association, it is up to the listed issuer to decide whether an enquiry with its legal advisers needs to be made to assist the directors to determine whether there is anything unusual about the proposed amendments to the articles of association. In assessing the question of what is unusual, the directors should have regard to whether the proposed amendments are customary or a common feature of the articles of association of companies listed in Hong Kong.

            FAQ Series 8, FAQ No. 35
            LR reference: Main Board Rules 13.51(1) / GEM Rules 17.50(1)
            Released on 28/11/2008

            Question:

            Under Main Board Rule 13.51(1)/ GEM Rule 17.50(1), an issuer proposing to amend its articles of association must submit to the Exchange a letter to the issuer from its legal advisers confirming that the proposed amendments comply with the Listing Rules and the laws of the place of incorporation of the issuer.

            Listco will amend its articles of association and proposes the following arrangements:

            •   Can Listco appoint one legal adviser to opine on the compliance with Listing Rules and another legal adviser to opine on the compliance with the laws of the place of incorporation of the issuer?
            •   Can the confirmation letter be issued by Listco's in-house legal counsel?

            Answer:

            Yes. The arrangements are acceptable as long as Listco considers the persons have the professional qualifications and experience to provide the confirmation letter.

            FAQ Series 9, FAQ No. 24
            LR reference: Main Board Rules 13.51(1) / GEM Rules 17.50(1)
            Released on 14/12/2009

            Question:

            According to the circulars issued by the State Council of the PRC and the China Securities Regulatory Commission on 22 and 25 October 2019, the notice period for general meetings of PRC issuers (and other related matters) shall be governed by the Company Law of the PRC, but not the Special Regulations on the Overseas Offering and Listing of Shares by Joint Stock Limited Companies issued by the State Council (the Regulations). This will shorten the notice period for general meetings from 45 days to 20 days for annual general meetings and 15 days for special general meetings. The circular also advised PRC issuers to amend their articles of association accordingly.

            Under Appendix 13D to the Main Board Rules / Appendix 11C to the GEM Rules, a PRC issuer’s articles of association must include the Mandatory Provisions issued by PRC regulatory authorities. A PRC issuer asks whether its articles of association, as amended, would continue to comply with the requirement of Appendix 13D / Appendix 11C.

            Answer:

            Yes. Under Main Board Rule 19A.53 / GEM Rule 25.40 a PRC issuer shall observe and comply with the Company Law, the Regulations and the PRC issuer’s articles of association. The PRC issuer would be in compliance with the Rules.

            The issuer is also reminded that under Main Board Rule 13.51(1) / GEM Rule 17.50(1) it must, at the same time as it dispatches a circular to shareholders on the proposed amendments, submit to the Exchange a confirmation from its legal adviser that the amendments to the articles of association conform to the Listing Rule requirements and the PRC laws and regulation.

            FAQ No. 070-2019
            LR reference: Main Board Rules 13.51(1), 19A.53, Paragraph (a) of Section 1 of Appendix 13D / GEM Rules 17.50(1), 25.40, Paragraph (a) of Section 1 of Appendix 11C
            Released on 8/11/2019

            Question:

            Is a director of a listed issuer required to sign a new declaration and undertaking form if he is or is proposed to be re-designated from an executive director to a non-executive director, or vice- versa?

            Answer:

            No.

            However, in accordance with Main Board Rule 13.51(2) or GEM Rule 17.50(2), an issuer must inform the Exchange of the re-designation of a director immediately after such re-designation takes effect, and the issuer must simultaneously make arrangements to ensure that an announcement of the re-designation of the director is published in accordance with Main Board Rule 2.07C (Chapter 16 of the GEM Rules) as soon as practicable.

            FAQ Series 8, FAQ No. 36
            LR reference: Main Board Rules 13.51(2), Form B/H in Appendix 5 / GEM Rules 17.50(2), Form A/B in Appendix 6
            Released on 28/11/2008 (Updated in February 2020)

            Question:

            How should the directors / supervisors of an issuer seeking to transfer from GEM to the Main Board complete paragraph 2 of Part 1 of Form B/H/I in Appendix 5?

            Answer:

            Directors and supervisors of Eligible Issuers under paragraph 8 of Appendix 28 of the Main Board Rules should state in the forms that their personal details have been set out in the announcement.

            GEM transfer applicants that are not Eligible Issuers under paragraph 8 of Appendix 28 of the Main Board Rules are considered new listing applicants and their directors and supervisors should state in the forms that their personal details have been set out in the listing document.

            FAQ Series 8, FAQ No. 59
            LR reference: Main Board Rules Form B/H/I in Appendix 5, Appendix 28 paragraph 10, 13.51(2)
            Released on 28/11/2008 (Updated in February 2020)

            Question:

            In the case of the resignation, retirement or removal of a director, supervisor or chief executive, will an issuer also be required to make the disclosures set out in (a) to (x) of Main Board Rule 13.51(2)/GEM Rule 17.50(2)?

            Answer:

            No, it is not intended that when a director, supervisor or chief executive resigns, retires or is removed that the announcement should contain the items listed under (a) to (x) of Main Board Rule 13.51(2)/GEM Rule 17.50(2).

            FAQ Series 17, FAQ No. 16
            LR reference: Main Board Rules 13.51(2) / GEM Rules 17.50(2)
            Released on 19/12/2011

            Question:

            Please clarify what "professional qualification" under Main Board Rule 13.51(2)(c)/GEM Rule 17.50(2)(c) refers to.

            Answer:

            It refers to a qualification in respect of a professional discipline, for example law, accounting, engineering, architecture, surveying or medicine. It also includes any professional title and membership of a professional body.

            FAQ Series 8, FAQ No. 37
            LR reference: Main Board Rules 13.51(2)(c) / GEM Rules 17.50(2) (c)
            Released on 28/11/2008 (Updated in February 2020)

            Question:

            If there is no information to be disclosed pursuant to the requirements under certain paragraphs, say (h) to (w), in Main Board Rule 13.51(2)/GEM Rule 17.50(2), is a negative statement required for each sub-paragraph including a recital of the language of the sub-paragraph in full or, alternatively, is it acceptable for the negative statement to be made by quoting the rule reference without a detailed description of each of the requirements therein?

            Answer:

            Subject to the comment below, compliance with the requirements of Main Board Rule 13.51(2)/GEM Rule 17.50(2), could be achieved by either approach. We think the alternative offers a more elegant and focused form of disclosure. Under either approach separate disclosure should always be made pursuant to Main Board Rule 13.51(2)(w) /GEM Rule 17.50(2)(w) to confirm, in the announcement, whether or not there are any other matters that need to be brought to the attention of holders of securities of the listed issuer.

            FAQ Series 2, FAQ No. 2
            LR reference: Main Board Rules 13.51(2)(x) / GEM Rules 17.50(2)(x)
            Released on 6/6/2006 (Updated on 30/9/2009)

            Question:

            Can issuers publish on their websites the procedures for director election in a single language (i.e. English or Chinese only)?

            Answer:

            No, they must be published in both English and Chinese.

            FAQ Series 17, FAQ No. 17
            LR reference: Main Board Rules 13.51D / GEM Rules 17.50C
            Released on 19/12/2011

            Question:

            If the procedures for shareholders to propose a person for election as a director are set out in an issuer’s constitutional documents (which are al required to be published on its website and the Exchange’s website), does the issuer need to separately publish these procedures on its website?

            Answer:

            We would expect the issuer to publish the procedures separately on its website. This is because the constitutional documents are usually very lengthy and investors may find it difficult to locate the procedures (especially if they are unaware that these procedures are set out in the constitutional documents. Also, publishing the procedures on the issuer’s website should not be onerous and would enhance the procedures’ transparency.

            FAQ Series 17, FAQ No. 17A  (Previously published in FAQ Series 21 No.6)
            LR reference: Main Board Rules 13.51D / GEM Rules 17.50C
            Released on 27/3/2013 (Updated on 28/12/2018)

            Question:

            Will the submissions for publication I make through the e-Submission System be vetted by HKEx prior to publication?

            Answer:

            No. If an announcement requires pre-vetting by the Listing Division, an issuer must not submit that announcement for publication until clearance, by way of the usual indication that the Exchange has "no further comments", has been obtained.

            If an issuer wishes to submit an announcement or document for vetting the issuer should log onto the e-Submission System as a "Listing Related Matter" user. The announcement or document can then be submitted to HKEx's Listing Division and vetted if necessary. Announcements or documents submitted as a "Listing Related Matter" user are not published by the e-Submission System.

            It is the issuer's responsibility to decide whether an announcement or document should be submitted for publication or submitted for vetting through the e-Submission System. An issuer can consult HKEx's published "Guide on pre-vetting requirements and selection of headline categories for announcements" (http://www.hkex.com.hk/eng/rulesreg/listrules/guidref/guide_pre_vetting_req.htm) for guidance on this matter.

            FAQ Series 3, FAQ No. 170
            LR reference: Main Board Rules 13.52, 13.52A, 13.52B / GEM Rules 17.53, 17.53A, 17.53B
            Released on 22/3/2007 (Updated on 7/3/2011)

            Question:

            Will the Exchange review announcements submitted by a listed issuer before publication that are not subject to the pre-vetting requirement under Main Board Rule 13.52(2) (GEM Rule 17.53(2))?

            Answer:

            No, the Exchange will not pre-vet such announcement unless in exceptional circumstances. An issuer is encouraged to consult the Exchange on any Rule compliance issues in relation to the announcement and/or the subject matter before it publishes the announcement.

            FAQ Series 8, FAQ No. 38
            LR reference: Main Board Rules 13.52(2) / GEM Rules 17.53(2)
            Released on 28/11/2008 (Updated in February 2020)

            Question:

            Where a listed issuer publishes an announcement under the Rules that is not subject to the pre-vetting requirement under Main Board Rule 13.52(2) (GEM Rule 17.53(2)), will the Exchange require the listed issuer to submit any documents (for example Listing Rule compliance checklists) for the purpose of post-vetting the announcement?

            Answer:

            If the announcement is made in respect of a share / discloseable transaction required under Main Board Rules 14.34 and 14.35 (GEM Rules 19.34 and 19.35), the listed issuer must complete the "Size Tests Checklist" and submit it to the Listing Division not later than the publication of the announcement.

            The Exchange may require the listed issuer to submit information and/or documents in respect of an announcement published by the issuer to demonstrate its compliance with the Rules. In such cases, the Exchange will inform the listed issuer of the specific information and/or documents required. A checklist for disclosure requirements applicable to a particular type of announcement may need to be submitted by the listed issuer upon request by the Exchange in individual cases.

            FAQ Series 8, FAQ No. 39
            LR reference: Main Board Rules 13.52(2) / GEM Rules 17.53(2)
            Released on 28/11/2008

            Question:

            Under what circumstances will the Exchange exercise the right under Main Board Rule 13.52A (GEM Rule 17.53A) to request review of announcements, circulars or other documents before their publication?

            Answer:

            The Exchange will only exercise this power in exceptional circumstances. This is generally the case where the Exchange has an interest in reviewing certain disclosure in a listed issuer's announcement, for example the Exchange has required the listed issuer to make certain specific disclosure in its announcement and such disclosure is necessary to ensure a fair, orderly and efficient market. In such cases, the Exchange will communicate to the listed issuer its direction to review the announcement prior to publication and the reasons for its decision.

            FAQ Series 8, FAQ No. 40
            LR reference: Main Board Rules 13.52A / GEM Rules 17.53A
            Released on 28/11/2008)

            Question:

            When an A+H issuer proposes a corporate action (e.g. distribution of dividends or other entitlements), does it need to disclose the timetables for both A and H shareholders in the same announcement?

            Answer:

            Yes. The issuers should ensure clear communications to all shareholders if they propose different timetables (e.g. ex-entitlement date, record date and payment date) for their distributions to shareholders in the two markets.

            FAQ Series 29, FAQ No. 7
            LR reference: Main Board Rules 13.52B
            Released on 14/11/2014

            Question:

            How could an issuer send hard copies of its corporate communicates to investors whose shares are held in the Central Clearing and Settlement System ("CCASS") either directly or indirectly through a broker or custodian ("CCASS Investors"), as such shares were held in the name of HKSCC Nominees Limited and the names of CCASS Investors do not appear on the issuer’s register of members?

            Answer:

            An issuer can post on its website a notification of the publication of corporate communication together with a request form. A CCASS investor who wishes to receive a hard copy of the corporate communication, would need to complete and return the request form to the share registrar or other agent of the issuer. The issuer can then send the CCASS investor a hard copy.

            Issuers should have in place an arrangement to track the preference of CCASS Investors to ensure, on a best efforts basis, that CCASS Investors who have previously indicated their preferences to receive hard copies of corporate communications do not have to complete and return a request form for every corporate communication, unless they ceased to be shareholders of the issuer.

            FAQ Series 8, FAQ No. 40A
            LR reference: Main Board Rules 13.56 / GEM Rules 17.60
            Released on 31/12/2009 (Updated in February 2020)

            Question:
             
            (a)   Practice Note 8 to the Main Board Rules (or GEM Rules 17.79 and 17.80) sets out the emergency share registration arrangements during a typhoon or a black rainstorm warning. What are the emergency share registration arrangements upon the announcement by the Government of the Hong Kong Special Administrative Region on “extreme conditions” caused by super typhoons (“Extreme Conditions”) (see Note)?
             
            (b)   In the case of a rights issue, Main Board Rule 13.66 (or GEM Rule 17.78) states that if trading on the Exchange is interrupted due to a typhoon or a black rainstorm warning, the book-close date will be automatically postponed, where necessary, to provide at least two trading days (during neither of which trading is interrupted) for cum-rights trading during the notice period. Does this arrangement apply if trading on the Exchange is interrupted due to Extreme Conditions?
             
            Note: According to the revised “Code of Practice in Times of Typhoons and Rainstorms” issued by the Labour Department in June 2019, the Government of the Hong Kong Special Administrative Region may issue an announcement on “extreme conditions” in the event of, for example, serious disruption of public transport services, extensive flooding, major landslides or large-scale power outage after super typhoons. When “extreme conditions” are in force (i.e. the two-hour period after cancellation of Typhoon Warning Signal No. 8), the Government will review the situation and further advise the public by the end of the two-hour period whether “extreme conditions” will be extended or cancelled.
             
            Answer:
             
            (a)   The emergency share registration arrangements in the event of Extreme Conditions shall be the same as those applicable to Typhoon Warning Signal No. 8 or above currently set out in the Rules.
             
            (b)   Yes. Where the book-close date is postponed in the circumstances described, the issuer must publish an announcement on the revised timetable.
             
            FAQ Series N/A, FAQ No. 058-2019
            LR reference: Main Board Rules 13.66, Practice Note 8/ GEM Rules 17.78, 17.79, 17.80
            Released on 30/08/2019
             

            Question:

            A director has a service contract without a fixed term which is terminable by either party by giving notice of 6 months. Is shareholders approval necessary as the contract may be for a term that may exceed 3 years?

            Answer:

            The purpose of the rule is to ensure that the issuer is not unduly burdened by service contracts that are for an inordinate length or which require heavy compensation or lengthy notice for early termination. Such contingent liabilities may be significant, in which case, shareholders' approval must be obtained for these service contracts. In this case, we consider that there is no significant commitment on the issuer as there is no specific term and only six months notice is required. Therefore, the contract does not need to be approved by shareholders.

            FAQ Series 1, FAQ No. 33
            LR reference: Main Board Rules 13.68 / GEM Rules 17.90
            Released on 30/3/2004

            Question:

            Is shareholders' approval required for a director's service contract with a fixed term of 3 years, but requiring a notice of 6 months before termination after the fixed term? The contract does not mention the compensation for early termination of the fixed term. It expressly states however that, if the contract is terminated when the remaining term is more than 1 year, a compensation in dollars for the remaining term will be needed. Will this contract require shareholders' approval?

            Answer:

            Yes, shareholders' approval is required because the service contract is of a fixed term of 3 years and a notice of 6 months is required for termination after the fixed term and accordingly, the service contract may endure for more than 3 years.

            In addition, the service contract will be subject to shareholders' approval because it expressly provides for a scenario where more than 1 year's remuneration will be payable in order to terminate the contract.

            FAQ Series 1, FAQ No. 34
            LR reference: Main Board Rules 13.68 / GEM Rules 17.90
            Released on 30/3/2004

            Question:

            Is an "employment contract" with a director the same as a director's "service contract"? Should it be treated as a notifiable transaction?

            Answer:

            Yes. We would expect an "employment contract" with a director to contain the terms upon which he is to provide his services to issuer, and subject to the same disclosure and shareholders’ approval requirements as for service contracts.

            Directors' employment contracts are not subject to the requirements of notifiable transactions.

            FAQ Series 1, FAQ No. 35
            LR reference: Main Board Rules 13.68 / GEM Rules 17.90
            Released on 30/3/2004 (Updated in February 2020)

            Question:

            What are the disclosure requirements for the announcement or supplementary circular an issuer is required to publish if, after the despatch of the notice of a general meeting, it received a shareholder’s notice to propose a person for election as a director at the general meeting in respect of the nomination?

            Answer:

            The issuer must publish details of the candidate as required under Main Board Rule 13.51(2)(GEM Rule 17.50(2)) in an announcement or supplementary circular.

            Further, the issuer must give shareholders at least seven days to consider the relevant information disclosed in such an announcement or supplementary circular prior to the date of the meeting of the election. The issuer must also assess whether it is necessary to adjourn the meeting of the election to give shareholders a longer period of at least 10 business days to consider the relevant information disclosed in the announcement or supplementary circular.

            FAQ Series 1, FAQ No. 36
            LR reference: Main Board Rules 13.70 / GEM Rules 17.46B
            Released on 30/3/2004 (Last updated in January 2022)

            Question:

            Can issuers accept a notice to propose a person for election as a director earlier than the day after the despatch of the notice of the general meeting appointed for the election?

            Answer:

            Yes. Provided that such is permitted under the issuer’s articles of association or equivalent document and the applicable law.

            FAQ Series 1, FAQ No. 69
            LR reference: Main Board Rules 13.70 / GEM Rules 17.46B
            Released on 30/3/2004 (Last updated in January 2022)

            Question:

            A shareholder proposes a person for election as a director at the forthcoming AGM after the listed company has issued the AGM notice. The listed company will issue a supplemental notice for the nomination of the director. Is it required to comply with the reasonable notice period under Appendix 3, paragraph 14(2) for the despatch of this supplemental notice?

            Answer:

            For nomination of directors in the circumstances described, Main Board Rule 13.70/ GEM Rule 17.46B specifically require the issuer to give shareholders at least seven days to consider the relevant information disclosed in such an announcement or supplementary circular prior to the date of the meeting of the election. Also, the issuer must assess whether it is necessary to adjourn the general meeting to give shareholders a longer period of at least 10 business days to consider the information disclosed in the supplemental notice. It would normally be acceptable for the listed company to issue the supplemental notice 10 business days before the AGM or the adjourned AGM.

            FAQ Series 17, FAQ No. 26C (Previously published in FAQ Series 9 No.27)
            LR reference: Main Board Rules 13.70, Appendix 3, paragraph 14(2) / GEM Rules 17.46B, Appendix 3, paragraph 14(2)
            Released on 14/12/2009 (Updated on 01/01/2022)

            Question:

            Must an issuer disclose the biographical details of directors to be elected at a general meeting in the notice or another circular, if such information is al disclosed in the annual report and the election is to be proposed at an Annual General Meeting ("AGM")?

            Answer:

            No. It is not necessary to send another circular if details are included in the annual report provided that the annual report is the accompanying circular, and the notice has made clear reference to the annual report such that there is no doubt as to where the information can be found and to which director reference is being made.

            However, for appointments at times other than at the AGM, reference to the annual report is not acceptable. This is because (i) certain shareholders as at the date when relevant disclosure is made may not have been so when the circular or notice of AGM was sent: and (ii) there may have been changes in the information previously published which will need to be updated.

            FAQ Series 1, FAQ No. 37
            LR reference: Main Board Rules 13.74 / GEM Rules 17.46A
            Released on 30/3/2004 (Updated in February 2020)

            Question:

            Is an issuer required to seek shareholder approval for the appointment of a new auditor if the existing auditor resigns before the end of their term of office? 

            Answer:

            Shareholder approval is not required for the appointment of an auditor to fill a casual vacancy during the year. However, the issuer must seek shareholder approval for the formal appointment of the auditor at the next AGM.

            FAQ Series 17, FAQ No. 18
            LR reference: Main Board Rules 13.88, Appendix 3, paragraph 17 / GEM Rules 17.100, Appendix 3, paragraph 17
            Released on 19/12/2011 (Last updated on 01/01/2022)

            Question:

            Can issuers publish their constitutional documents in a single language (i.e. English or Chinese only)?

            Answer:

            No, the constitutional documents must be published in both English and Chinese.

            FAQ Series 17, FAQ No. 19
            LR reference: Main Board Rules 13.90 / GEM Rules 17.102
            Released on 19/12/2011

            Question:

            If we translate our constitutional document, would both languages be of equal effect?

            Answer:

            For translation of constitutional documents, you should specify which of the two languages (Chinese or English) prevail in case of discrepancies or inconsistencies.

            FAQ Series 17, FAQ No. 19A
            LR reference: Main Board Rules 13.90 / GEM Rules 17.102
            Released on 19/12/2011

            Question:

            Do issuers have to publish their constitutional documents by way of an announcement? Which announcement headline(s) should they use?

            Answer:

            Issuers do not need to publish their constitutional documents by way of an announcement. They may select the current Tier One Headline Category — Constitutional Documents when submitting their documents for publication on the HKEXnews website.

            FAQ Series 17, FAQ No. 19B
            LR reference: Main Board Rules 13.90 / GEM Rules 17.102
            Released on 19/12/2011

            Question:

            If an issuer has amended its constitutional documents (memorandum and articles of association, bye-laws or other equivalent constitutional document) many times over the years since its incorporation, is it required to post to the Exchange website its documents incorporating all the previous amendments?

            Answer:

            The issuer is required to publish a consolidated version of its constitutional document which has incorporated all the changes. This may be a conformed copy or a consolidated version not formally adopted by shareholders at a general meeting. However, if the issuer does so, the front page of its published constitutional document should include a statement that it is a conformed copy or a consolidated version not formally adopted by shareholders at a general meeting.

            FAQ Series 17, FAQ No. 19C
            LR reference: Main Board Rules 13.90 / GEM Rules 17.102
            Released on 19/12/2011

            Question:

            An issuer is incorporated in Bermuda and in order to publish a consolidated version of the constitutional document, the issuer needs to obtain shareholder and court approval and register the consolidated constitutional document with the Bermuda Companies Registry, is it required to post to the Exchange website its consolidated constitutional document with the Bermuda Companies Registry?

            Answer:

            See response to Question 19C above.

            FAQ Series 17, FAQ No. 19D
            LR reference: Main Board Rules 13.90 / GEM Rules 17.102
            Released on 19/12/2011 (Updated on 28/12/2018)

            Question:

            Will the Exchange be providing training on board diversity?

            Answer:

            Yes, the Exchange has provided a series of training on board diversity.

            In March 2017, we launched a Director Training Webcast entitled “Duties of Directors and the Role and Functions of Board Diversity Policy” in which one of the topics is on board committees and board diversity.

            In December 2018, we released a Directors’ ETraining webcast entitled “INEDs’ Role in Corporate Governance” which covered the board diversity topic.

            In May 2021, we launched a webinar entitled “Creating Value with Board Diversity” with practitioners sharing their insights on the importance of a diverse boardroom and practical ways for achieving diversity.

            In December 2021, we published the Guide which sets out guidance on board diversity policies, including gender diversity.

            FAQ Series 17, FAQ No. 19F
            LR reference: Main Board Rules 13.92 / GEM Rules 17.104
            Released on 28/12/2018 (Updated on 01/01/2022)

            Question:

            Effective from 1 January 2022, the Exchange will not consider diversity to be achieved for a single gender board. What happens if an issuer al has directors of both genders on board on or after 1 January 2022 but subsequently fails to meet the requirement set out in the Rule, e.g. a particular director resigns?

            Answer:

            For an issuer who al has directors of both genders on board on or after 1 January 2022, if the issuer subsequently at any time has failed to meet any of the other requirements in the Rule, it must immediately publish an announcement containing the relevant details and reasons. The issuer must appoint appropriate members to the board to meet the requirement(s) within three months after failing to meet such requirement(s). The issuer may select the current headline category “Miscellaneous – Other – Corporate Governance Related Matter” when submitting the announcement for publication on the HKEXnews website.

            FAQ Series 17, FAQ No. 19F(1)
            LR reference: Main Board Rules 13.92 / GEM Rules 17.104
            Released on 01/01/2022

            Question:

            Is it a Rule breach for issuers with single gender board on 1 January 2022?

            Answer:

            As mentioned in the Consultation Conclusions on Review of Corporate Governance Code & Related Listing Rules, and Housekeeping Rule Amendments, issuers with single gender board on 1 January 2022 will have a 3-year transitional period (as provided under the note to the Rule) to appoint at least a director of a different gender, while those who have made a commitment in the listing document with objectives set for implementing gender diversity should appoint at least a director of a different gender in accordance with such commitment.

            After these issuers appointed a director of a different gender on or after 1 January 2022, and if they subsequently fail to meet the Rule requirement (e.g. a particular director resigns), they should follow the arrangement set out in FAQ No. 19F(1) above.

            FAQ Series 17, FAQ No. 19F(2)
            LR reference: Main Board Rules 13.92 and Note to 13.92 / GEM Rules 17.104 and Note to 17.104
            Released on 01/01/2022

            Question:

            How will Hong Kong-incorporated issuers satisfy the Rules regarding disclosure of their memorandum and articles of association?

            Answer:

            For Hong Kong-incorporated issuers, reference to "memorandum and articles of association" in the Rules will be deemed to refer to their articles of association because under the New CO, provisions of the memorandum of association will be automatically deemed to be regarded as provisions of the issuer's articles of association.

            FAQ Series 26, FAQ No. 17
            LR reference: Main Board Rules 13.90 / GEM Rules 17.102
            Released on 21/2/2014

            Question:

            Will Hong Kong-incorporated issuers need to amend and reprint their articles of association in order to incorporate the contents of their memorandum of association for the purposes of the Exchange's disclosure requirements?

            Answer:

            No.

            FAQ Series 26, FAQ No. 18
            LR reference: Main Board Rules 13.90 / GEM Rules 17.102
            Released on 21/2/2014

            Question:

            Can an issuer adopt other guidelines instead of the ESG Reporting Guide ("ESG Guide")? Where an issuer adopts alternative reporting guidance or international standards with comparable provisions to the ESG Guide, is it required to give any explanation/reconciliation in relation to the ESG Guide?

            Answer:

            The ESG Guide sets out minimum parameters for reporting with a view to facilitating issuers' disclosure and communication with investors and other stakeholders. The issuer's board may consider adopting international standards or guidelines that are relevant to the issuer's industry or sector, such as the Global Reporting Initiative's Sustainability Reporting Standards, CDP's Climate Change Questionnaire and Water Security Questionnaire, Recommendations of the Financial Stability Board's Task Force on Climate-related Financial Disclosures, the Sustainability Accounting Standards Board's SASB Materiality Map®, the International Organization for Standardization’s Guidance on Social Responsibility, and the Corporate Sustainability Assessment for inclusion in the Dow Jones Sustainability Indices.

            To avoid duplication, adopting international reporting standards or guidelines that contain comparable provisions to the ESG Guide should be sufficient compliance with the ESG Guide without the need for further explanation. However, issuers that report on international standards or guidelines should make clear which "comply or explain" provisions and recommended disclosures of the ESG Guide they are reporting on.

            FAQ Series 18, FAQ No. 2
            LR reference: Main Board Rules 13.91, Appendix 27 / GEM Rules 17.103, Appendix 20
            Released on 31/8/2012 (Updated on 28/02/2020)

            Question:

            Whilst paragraph 5 of the ESG Guide states that the ESG Guide is organised into two ESG subject areas: Environmental and Social, and corporate governance is addressed separately in the Corporate Governance Code, the term "ESG" is defined in Main Board Rule 13.91(1) (GEM Rule 17.103(1)) as “environmental, social and governance”. Please clarify whether Main Board Rule 13.91(1) (GEM Rule 17.103(1)) and the ESG Guide cover corporate governance.

            Answer:

            Under the Listing Rules, the Exchange requires issuers to disclose environmental and social matters in ESG reports in accordance with the ESG Guide, and to disclose matters in relation to corporate governance in corporate governance reports in accordance with the Corporate Governance Code.

            Issuers may however publish a combined corporate governance and ESG report if appropriate.

            FAQ Series 18, FAQ No. 22
            LR reference: Main Board Rules 13.91, Appendix 27 / GEM Rules 17.103, Appendix 20
            Released on 28/02/2020

            Question:

            An issuer is required to issue an announcement on any proposed amendment to its memorandum or articles association. Is an issuer required to publish further announcements regarding adoption of such proposed amendments?

            Answer:

            No. However, issuers are encouraged to do so to promote transparency.

            FAQ Series 1, FAQ No. 67
            LR reference: Main Board Rule 13.51(1) / GEM Rule 17.50(1)
            Released on 30/3/2004 (Updated in February 2020)

          • Chapter 14

            View Current PDF

            Question:

            If a listed subsidiary issues new shares by way of a general mandate to acquire assets, what are the notifiable transaction implications for the listed parent?

            Answer:

            An allotment of shares by the listed subsidiary would be a deemed disposal for the listed parent and the transaction, depending on the size tests as defined in Main Board Rule 14.04(9) / GEM Rule 19.04(9), may fall to be treated as a very substantial disposal, major transaction or discloseable transaction of the listed parent and be subject to the relevant notifiable transaction requirements under Main Board Chapter 14 / GEM Chapter 19.

            Furthermore, the acquisition of assets by the listed subsidiary would constitute an acquisition of assets by the listed parent (or its subsidiary). The transaction, depending on the size tests defined in Main Board Rule 14.04(9) / GEM Rule 19.04(9), may fall to be treated as a very substantial acquisition, major transaction or discloseable transaction of the listed parent and be subject to the relevant notifiable transaction requirements under Main Board Chapter 14 / GEM Chapter 19.

            FAQ Series 8, FAQ No. 41. Issue 10
            LR reference: Main Board Rules 14.04, 14.29 / GEM Rules 19.04, 19.29
            Released on 28/11/2008

            Question:

            An issuer will enter into a lease transaction as a lessee and recognise the right-of-use asset according to HKFRS/IFRS 16.

            (a) How should the issuer classify the lease under the definition of "transaction"?
            (b) Does the revenue exemption under Main Board Rule 14.04(1)(g) apply to the lease?
            (c) How should it calculate the percentage ratios for the lease?
            (d) If the lease is entered into by the issuer with a connected person, will it be treated as a one-off connected transaction or continuing connected transaction?

            Answer:

            (a) The issuer will recognise an asset representing its right to use the leased asset. This will be regarded as an acquisition of asset under the definition of transaction set out in Main Board Rule 14.04(1)(a).

            The classification of transaction into a finance lease or operating lease under Main Board Rule 14.04(1)(c) or 14.04(1)(d) will not apply where the issuer acts as lessee.
            (b) No. The transaction is of a capital nature.
            (c) Listed issuers are required to compute the assets and consideration ratios. The numerator will be the value of the right-of-use asset recognised by the issuer (which includes the present value of lease payments) according to HKFRS/IFRS 16.
            (d) Where the lease is subject to an agreement with fixed terms, it is treated as a one-off connected transaction (i.e. an acquisition of capital assets).

            FAQ Series N/A, FAQ No. 045-2018
            LR reference: Main Board Rules 14.04(1)(a), 14.04(1)(c), 14.04(1)(d), 14.04(1)(g), 14.07, 14.22, 14.23, 14A.24(1), 14A.24(3), 14A.31 / GEM Rules 19.04(1)(a), 19.04(1)(c), 19.04(1)(d), 19.04(1)(g), 19.07, 19.22, 19.23, 20.22(1), 20.22(3), 20.29
            Released on 28/09/2018

            Question:

            An issuer (as a lessee) has entered into a 5-year contract to lease a warehouse from a third party and recognized the right-of-use asset according to HKFRS/IFRS16.

            If the issuer subsequently proposes to early terminate the lease by the end of the third year,

            (a) how should the issuer classify the termination of the lease under the definition of “transaction”?
            (b) how should it calculate the percentage ratios for the termination of lease?

            Answer:

            (a) The proposed termination of lease will result in a decrease in the amount of right-of-use asset recognised by the issuer. This will be regarded as a disposal of asset under the definition of transaction set out in Main Board Rule 14.04(1)(a).
            (b) The issuer should compute (i) the assets ratio based on the value of the remaining right-of-use asset; and (ii) the consideration ratio based on the penalty or fee, if any, payable by the issuer for terminating the lease.

            FAQ Series N/A, FAQ No. 045A-2018
            LR reference: Main Board Rules 14.04(1)(a), 14.07 / GEM Rules 19.04(1)(a), 19.07
            Released on 17/04/2020

            Question:

            HKFRS/IFRS 16 will become effective for annual accounting periods beginning on or after 1 January 2019.

            When listed issuers apply HKFRS/IFRS 16 retrospectively to recognise the right-of-use assets arising from existing leases, are they required to re-comply with the notifiable or connected transaction Rules for these leases?

            Answer:

            Listed issuers are not required to re-comply with the notifiable or connected transaction Rules for leases under fixed terms or framework agreements entered into by the issuers before the adoption of HKFRS/IFRS 16. Where existing leases have been classified as continuing connected transactions under Chapter 14A of the Main Board Rules, the issuers should continue to comply with the relevant Rule requirements.

            FAQ Series N/A, FAQ No. 048-2018
            LR reference: Main Board Rules 14.04(1)(a), 14.04(1)(c), 14.04(1)(d), 14A.24(1), 14A.24(3), 14A.31 / GEM Rules 19.04(1)(a), 19.04(1)(c), 19.04(1)(d), 20.22(1), 20.22(3), 20.29
            Released on 28/09/2018

            Question:

            Under a proposed transaction, Company A will transfer the legal ownership of an asset to Company B and lease the asset back from Company B. Company A has an option to buy back the asset at the end of the lease period.

            According to HKFRS/IFRS 16, the proposed transaction will be accounted for as a financing arrangement by each of Company A and Company B (and not a sale and leaseback transaction).

            How should Company A and Company B classify the proposed transaction under Chapter 14?

            Answer:

            The transfer of the legal ownership of the asset constitutes a disposal of asset by Company A and an acquisition of asset by Company B under Main Board Rule 14.04(1)(a).

            For Company B, the proposed transaction also involves provision of financial assistance under Main Board Rule 14.04(1)(e).

            FAQ Series N/A, FAQ No. 052-2018
            LR reference: Main Board Rules 14.04(1)(a), 14.04(1)(e) / GEM Rules 19.04(1)(a), 19.04(1)(e)
            Released on 28/09/2018

            Question:

            An issuer will enter into a lease transaction as a lessee (e.g. lease of retail outlets for operating its retail business).

            Under the agreement, the annual lease payment will include: i) a fixed dollar amount (fixed lease payments); and ii) a variable amount determined as a percentage of the issuer’s annual sales generated from the leased properties (variable lease payments).

            According to HKFRS/IFRS 16, the issuer will recognize a right-of-use asset taking into account the fixed lease payments. The actual variable lease payments linked to sales will be recognized as expenses in the issuer’s profit or loss accounts in the periods in which they are incurred.

            (a) How should the issuer calculate the percentage ratios for the lease under Chapter 14 of the Main Board Rules?
            (b) If the lessor is a connected person, how should the issuer classify the lease under Chapter 14A of the Main Board Rules?

            Answer:

            (a) The recognition of a right-of-use asset in relation to the fixed lease payments will be regarded as an acquisition of asset under the definition of transaction set out in Main Board Rule 14.04(1)(a). The issuer is required to compute the assets and consideration ratios by using the value of the right-of-use asset as the numerator. (see FAQ045-2018(a) and (c))

            The variable lease payments linked to sales will be expenses incurred by the issuer in its ordinary and usual course of business. They are revenue in nature and are not subject to Chapter 14.
            (b) Where the lessor is a connected person:
             
            (i) The recognition of a right-of-use asset will constitute a one-off connected acquisition. The issuer is required to compute the assets and consideration ratios by using the value of the right-of-use asset as the numerator (see FAQ045-2018(d))
            (ii) The variable lease payments linked to sales will be recorded as expenses by the issuer over the term of the lease. They will be treated as a continuing connected transaction under Main Board Rule 14A.31.

            The issuer is required to set annual caps on the variable lease payments to be made each year under the agreement, and calculate the revenue, assets and consideration ratios.

            The lease will be classified under Chapter 14A by reference to the largest percentage ratio.

            (Note: There are other types of variable lease payments (e.g. variable lease payments depending on an index or rate) that are included in the initial measurement of right-of-use asset under HKFRS/IFRS 16. The treatment would be the same as fixed lease payments for the purpose of Chapters 14 and 14A.)

            FAQ Series N/A, FAQ No. 046A-2018
            LR reference: Main Board Rules 14.04(1)(a), 14.07, 14A.24(1), 14A.31 / GEM Rules 19.04(1)(a), 19.07, 20.22(1), 20.29
            Released on 07/12/2018

            Question:

            Under Main Board Rule 14.04(1)(c), the definition of transaction includes entering into or terminating finance leases.

            Does this Rule apply to a finance lease where the issuer acts as a lessor? If yes, how should the issuer calculate the percentage ratios?

            Answer:

            Main Board Rule 14.04(1)(c) applies. Under HKFRS/IFRS 16, lessors will continue to classify leases into operating leases or finance leases and account for the two types of leases differently.

            The issuer should calculate the percentage ratios for (i) the disposal of the underlying asset and (ii) the provision of financial assistance, and classify the finance lease based on the highest percentage ratio.

            FAQ Series N/A, FAQ No. 051-2018
            LR reference: Main Board Rules 14.04(1)(c), 14.07 / GEM Rules 19.04(1)(c), 19.07
            Released on 28/09/2018

            Question:

            Under Main Board Rule 14.04(1)(d), the definition of transaction includes entering into or terminating operating leases which have a significant impact on the operations of the listed issuer concerned.

            Does this Rule apply to an operating lease entered into by an issuer acting as lessor?

            Answer:

            Yes. Under HKFRS/IFRS 16, lessors will continue to classify leases into operating leases or finance leases and account for the two types of leases differently.

            FAQ Series N/A, FAQ No. 049-2018
            LR reference: Main Board Rules 14.04(1)(d), 14.07 / GEM Rules 19.04(1)(d), 19.07
            Released on 28/09/2018

            Question:

            Does the term "joint venture entity" under Main Board Rule 14.04(1)(f) / GEM Rule 19.04(1)(f) only refer to an entity which will be accounted for as a jointly controlled entity in the accounts of the listed issuer concerned?

            Answer:

            No. The term "joint venture entity" under Main Board Rule 14.04(1)(f) / GEM Rule 19.04(1)(f) may refer to any entity in any form which is to be jointly established by a listed issuer and any other party / parties, but is not limited to an entity which will be accounted for as a jointly controlled entity in the listed issuer's accounts.

            FAQ Series 7, FAQ No. 4
            LR reference: Main Board Rules 14.04(1)(f) / GEM Rules 19.04(1)(f)
            Released on 28/11/2008

            Question:

            Main Board Rule 14.15(2) / GEM Rule 19.15(2) sets out the requirements for calculating the consideration ratio for a transaction involving establishment of a joint venture entity. Are the assets ratio, profits ratio and the revenue ratio applicable to a transaction involving formation of a joint venture entity?

            If the joint venture partner proposes to inject its assets (other than cash) as capital contribution for setting up the joint venture entity, is it necessary to calculate the percentage ratios for the asset injection?

            Answer:

            For the purpose of classifying a transaction involving formation of a joint venture entity, the listed issuer is normally required to compute the assets ratio and the consideration ratio, and the consideration determined with reference to Main Board Rule 14.15(2) / GEM Rule 19.15(2) would form the numerator for each of these ratios. As to the profits and revenue ratios, they would normally be inapplicable as the joint venture entity would be newly set up and its profits and revenue figures would not be available.

            Nevertheless, where the formation of joint venture entity involves injection of assets (other than cash) by the listed issuer and/or any joint venture partner into the joint venture entity, the listed issuer should consider whether the transaction would result in an acquisition and/or disposal of assets by the listed issuer. In the circumstances described, if the joint venture entity is to be accounted for as a subsidiary of the listed issuer, the injection of assets by the joint venture partner into the joint venture entity would in effect result in an acquisition of such assets by the listed issuer. The listed issuer should compute the percentage ratios of such acquisition for classifying the transaction.

            FAQ Series 7, FAQ No. 5
            LR reference: Main Board Rules 14.04(1)(f), 14.07 / GEM Rules 19.04(1)(f), 19.07
            Released on 28/11/2008

            Question:

            (a) Does the revenue exemption under Main Board Rule 14.04(1)(g) apply to the acquisitions and disposals of securities that are carried out by a listed issuer for treasury management purposes?
            (b) Is a listed issuer required to aggregate all its securities transactions within a 12 month period for the purpose of the notifiable transaction Rules?
            (c) During the last six months, a listed issuer acquired 3,000,000 shares in Company A, which was not a discloseable transaction based on the size tests calculated on an aggregated basis. The issuer subsequently sold 1,000,000 shares in that company to a third party.

            If the issuer proposes to acquire another 5,000,000 shares in Company A, how should it aggregate the proposed acquisition with the earlier transactions?

            Answer:

            (a) No. The revenue exemption applies to securities transactions only if they are carried out by any member of the issuer’s group that is (i) a banking company; (ii) an insurance company; or (iii) a securities house that is mainly engaged in regulated activities under the Securities and Futures Ordinance.
            (b) The securities transactions will be aggregated in accordance with Rules 14.22 and 14.23. Normally the issuer is required to aggregate its securities transactions if they are made within a 12 month period and fall under any one of the following circumstances:
             
            they involve acquisition or disposal of securities or an interest in one particular company or group of companies; or
            they are entered into by the issuer with the same party or with parties connected or otherwise associated with one another; or
            they together lead to substantial involvement by the issuer in a business activity which did not previously form part of the listed issuer’s principal business activities.
            (c) In the circumstances described, the transactions were made within a 12-month period. The issuer should aggregate the proposed acquisition of 5,000,000 shares in Company A with its previous acquisitions of 2,000,000 shares. The numerator of the consideration ratio would be the sum of i) the consideration for the proposed acquisition of 5,000,000 shares and ii) the consideration for 2,000,000 shares last acquired by the issuer prior to the current proposed acquisition.
             

            FAQ Series N/A, FAQ No. 057-2019
            LR reference: Main Board Rules 14.04(1)(g),
            14.22, 14.23 / GEM Rules 19.04(1)(g), 19.22, 19.23
            Released on 30/09/2019

            Question:

            An issuer proposes to liquidate a subsidiary.

            Is the proposed voluntary liquidation of the subsidiary subject to the notifiable transaction requirements?

            Answer:

            The process of voluntary liquidation does not constitute a "transaction". However, the liquidation process may involve certain transactions that are subject to notifiable transaction Rules, for example, disposal of the subsidiary's assets.

            FAQ Series 9, FAQ No. 1
            LR reference: Main Board Rules 14.04(1) / GEM Rules 19.04(1)
            Released on 14/12/2009

            Question:

            Listco proposes to form a joint venture with an independent third party.

            According to the joint venture agreement, the transfer of interest in the joint venture by Listco or the joint venture partner to any third parties is subject to a right of first refusal of the other shareholder. Is the grant of the right of first refusal by/to Listco a transaction under the notifiable transaction rules?

            Answer:

            In this case, the right of first refusal gives Listco or the joint venture partner (as the case may be) the right to acquire the other's interest in the joint venture before the other can dispose of it to any third party. Granting the right of first refusal by/to Listco is not a notifiable transaction given that (i) no consideration is payable for the right and (ii) Listco will still have the discretion on whether to acquire or dispose of (as the case may be) the interest in the joint venture when the right is exercised. If Listco or the joint venture partner exercises the right of first refusal, the disposal or acquisition by Listco would be a transaction.

            FAQ Series 9, FAQ No. 2
            LR reference: Main Board Rules 14.04(1) / GEM Rules 19.04(1)
            Released on 14/12/2009

            Question:

            The court has ordered Listco to sell its property to settle an outstanding loan.

            Is the forced sale of the property by court order subject to the notifiable transaction requirements?

            Answer:

            Since Listco is bound to follow the court order and has no discretion to act in an opposite manner, the sale of the property by the court order is not regarded as a "transaction". Therefore the notifiable transaction requirements are not applicable in this situation. Nevertheless, if the information is inside information which requires disclosure under the Inside Information Provisions, Listco must also simultaneously announce the information under Main Board Rule 13.09(2)(a)/ GEM Rule 17.10(2)(a)1.

            FAQ Series 9, FAQ No. 3
            LR reference: Main Board Rules 14.04(1)(a) / GEM Rules 19.04(1)(a)
            Released on 14/12/2009 (Updated on 2/1/2013)

            Question:

            Do the notifiable transaction rules apply to share repurchases by an issuer?

            Answer:

            Repurchases by an issuer of its own shares are normally not subject to the notifiable transaction rules.

            FAQ Series 9, FAQ No. 4
            LR reference: Main Board Rules 14.04(1)(a) / GEM Rules 19.04(1)(a)
            Released on 14/12/2009

            Question:

            Company A is an associated company of Listco. Company A proposes to issue new shares to Mr. X (the Proposed Issue).

            The Proposed Issue would dilute Listco's interest in Company A. Is it a transaction for Listco under Chapter 14? Is it a connected transaction for Listco under Chapter 14A if Mr. X is a connected person of Listco?

            Answer:

            The Proposed Issue is not a transaction for Listco under both Chapters 14 and 14A as Company A is not a subsidiary of Listco.

            FAQ Series 20, FAQ No. 1
            LR reference: Main Board Rules 14.04(1)(a), 14A.25 / GEM Rules 19.04(1)(a), 20.23
            Released on 28/2/2013 (Updated on 1/7/2014)

            Question:

            Listco is a property developer and from time to time maintains term deposits and balances with various banks. It now proposes to place cash deposits with Company A on normal commercial terms.

            Company A is a finance company approved by regulatory authorities in the Mainland. It only provides financial services to its group companies including Listco.

            As Company A is a connected person, the proposed placing of cash deposits would be a connected transaction for Listco under Chapter 14A. Would it also constitute a transaction under Chapter 14?

            Answer:

            Yes. The proposed placing of cash deposits would be regarded as Listco providing financial assistance to Company A which falls within the definition of "transaction" under both Rules 14.04(1)(e) and 14A.24(4).

            FAQ Series 20, FAQ No. 2
            LR reference: Main Board Rules 14.04(1)(e), 14A.24(4) / GEM Rules 19.04(1)(e), 20.22(4)
            Released on 28/2/2013 (Updated on 1/7/2014)

            Question:

            Mr. X is Listco's executive director. He has been providing financial assistance to support Listco's business.

            Listco proposes to provide Mr. X with a corporate credit card for payment of his travelling expenses related to Listco's business. If he also uses the corporate credit card for payment of his personal purchases, Listco would set off the payment against the amount due from Listco to Mr. X.

            Would the use of the corporate credit card for payment of Mr. X's personal expenses constitute a transaction for Listco under Chapters 14 and 14A?

            Answer:

            Yes. Listco is liable for settling any payment made through the corporate credit card. Allowing Mr. X to use the card for payment of his personal expenses is a means to provide financial assistance to Mr. X. It falls within the definition of "transaction" under both Rules 14.04(1)(e) and 14A.24(4).

            FAQ Series 20, FAQ No. 3
            LR reference: Main Board Rules 14.04(1)(e), 14A.24(4) / GEM Rules 19.04(1)(e), 20.22(4)
            Released on 28/2/2013 (Updated on 1/7/2014)

            Question:

            A listed issuer has published an audited interim accounts.

            Can the listed issuer refer to profits and revenue figures shown in such accounts for computation of the profits ratio and revenue ratio?

            Answer:

            Under Main Board Rules 14.16 and 14.17 / GEM Rules 19.16 and 19.17, the profits and revenue figures to be used by a listed issuer as the basis of the profits ratio and revenue ratio must be the figures shown in its latest published audited accounts. This normally refers to the annual accounts of the listed issuer as the use of the profits and revenue figures shown in such accounts would provide a more meaningful measurement of the relative size of a transaction to the listed issuer based on the profitability and level of activity of a full financial year.

            FAQ Series 7, FAQ No. 6
            LR reference: Main Board Rules 14.04(2), 14.17 / GEM Rules 19.04(2), 19.17
            Released on 28/11/2008

            Question:

            What does “control of over a majority of assets in which it has invested” in Rule 18.03(1)(a) mean?

            Answer:

            It means the Mineral Company must have an interest greater than 50% (by value) in its total assets (which shall have the same meaning as defined in Rule 14.04(12)).

            GL52-13 Appendix 1, FAQ No. 4
            LR reference: Main Board Rules 18.03(1)(a), 14.04(12) / GEM Rules 18A.03(1)(a), 19.04(12)
            Released on 26/5/2010 (Updated in February 2020)

            Question:

            How should an issuer compute the percentage ratios for providing financial assistance to a third party?

            Answer:

            For assets ratio and consideration ratio, the numerator will be the value of the financial assistance plus any "monetary advantage" (see Main Board Rule 14.12/ GEM Rule 19.12) accruing to the borrower.

            The revenue ratio and profits ratio are applicable when there is an identifiable income from providing the financial assistance (e.g. interest income). The annual amount will be used as the numerator for calculating these ratios.

            FAQ Series 9, FAQ No. 5
            LR reference: Main Board Rules 14.07 / GEM Rules 19.07
            Released on 14/12/2009

            Question:

            Listco proposes to subscribe for some convertible bonds issued by Company X which is an independent third party. Listco will have the sole discretion on whether to convert the bonds into Company X's new shares according to the terms of the bonds.

            Is the subscription of the convertible bonds a transaction for Listco under the notifiable transaction rules?

            If Listco exercises the conversion rights attached to the bonds, the acquisition of Company X's interest would be a major transaction or above. Can Listco seek prior shareholder approval for any exercise of the conversion rights when it subscribes for the bonds?

            Answer:

            Subscription of the convertible bonds is a form of financial assistance provided by Listco to Company X. Listco should compute the percentage ratios for classifying the subscription under the notifiable transaction rules.

            When Listco proposes to exercise any conversion rights attached to the bonds, it will have to comply with the applicable notifiable transaction requirements for the acquisition of an interest in Company X.

            Under the notifiable transaction rules, it is acceptable for Listco to obtain prior shareholder approval for the exercise of the conversion rights at the time of subscription of the convertible bonds provided that it can provide sufficient information to its shareholders to assess the transaction.

            FAQ Series 9, FAQ No. 6
            LR reference: Main Board Rules 14.07 / GEM Rules 19.07
            Released on 14/12/2009

            Question:

            A listed issuer proposes to grant a RMB20 million loan (“Proposed Loan”) to its substantial shareholder, Mr. X.

            Separately, the issuer has borrowed funds (“Issuer’s Loan”) from Mr. X, which remains outstanding at the time of the Proposed Loan.

            Can the issuer offset the Issuer’s Loan against the Proposed Loan when calculating the percentage ratios under Chapters 14 and 14A?

            Answer:

            No. The Proposed Loan should be classified on a standalone basis.

            FAQ Series N/A, FAQ No. 073-2021
            LR reference: Main Board Rules 14.07, 14A.87 / GEM Rules 19.07, 20.87
            Released on 21/5/2021

            Question:

            Can negative goodwill be excluded from total assets in calculating asset ratio?

            Answer:

            No. Negative goodwill must be included in accordance with SSAP 30 which states that negative goodwill should be presented as a deduction from the assets of the reporting enterprise, in the same balance sheet classification as goodwill.

            FAQ Series 1, FAQ No. 44
            LR reference: Main Board Rules 14.07(1) / GEM Rules 19.07(1)
            Released on 30/3/2004 (updated in February 2020)

            Question:

            On the acquisition of an asset, say an equity interest, will the total assets test be applicable?

            Answer:

            Yes. If the book value of an asset to the vendor is unknown, the issuer must use the value of assets to be recorded in its books as the numerator of the total assets test. This would be the consideration payable, together with liabilities assumed (if any).

            FAQ Series 1, FAQ No. 45
            LR reference: Main Board Rules 14.07(1) / GEM Rules 19.07(1)
            Released on 30/3/2004

            Question:

            Do profits ratio and revenue ratio apply to an acquisition of fixed assets (e.g. equipment and machinery) by an issuer for its own use in its ordinary and usual course of business?

            Answer:

            The revenue and profits ratios are not applicable if these assets do not have an identifiable income stream.

            FAQ Series 9, FAQ No. 7
            LR reference: Main Board Rules 14.07(2) and (3) / GEM Rules 19.07(2) and (3)
            Released on 14/12/2009

            Question:

            If an issuer disposes of listed investment, should it adopt the turnover of the listed investment or the dividend income from the listed investment as the numerator of the revenue test?

            Answer:

            If the target is not consolidated in the accounts of the issuer, it should use the dividend income as the numerator. If the target is consolidated in the books of the issuer, it should use the revenue as disclosed in the annual report as the numerator.

            FAQ Series 1, FAQ No. 46
            LR reference: Main Board Rules 14.07(3) / GEM Rules 19.07(3)
            Released on 30/3/2004

            Question:

            How should the market capitalisation be calculated?

            Answer:

            Normally, in the absence of changes to the number of shares in issue, market capitalisation will be calculated using the simple average closing price for the five business days immediately before the date of the transaction and the number of shares in issue at the date of the transaction. Where such calculation produces anomalous results, for example, if there have been issues of new securities during the five business day period immediately before the transaction, the Exchange may require issuers to submit alternative computation that provides

            FAQ Series 1, FAQ No. 47
            LR reference: Main Board Rules 14.07(4) / GEM Rules 19.07(4)
            Released on 30/3/2004 (updated in February 2020)

            Question:

            Should the total market capitalisation include preference shares and warrants when calculating the consideration ratio?

            Answer:

            No. Market capitalisation is based on equity shares only and should not include preference shares and warrants.

            FAQ Series 1, FAQ No. 48
            LR reference: Main Board Rules 14.07(4) / GEM Rules 19.07(4)
            Released on 30/3/2004 (updated in February 2020)

            Question:

            How is the market capitalisation calculated if the issuer has unlisted shares or shares listed in other markets, such as H-Share issuers with A and B Shares?

            Answer:

            The market capitalisation for the purpose of the consideration test is calculated with reference to the total issued share capital of the issuer.

            (i) For an H-Share issuer with A and/or B Shares listed on a PRC stock exchange, the market value of A and/or B shares is calculated based on the average closing price of the respective shares for the five business days preceding the date of the transaction.
            (ii) For an H-issuer which has unlisted shares, the market value of unlisted shares is calculated by reference to the average closing price of its H shares for the five business days preceding the date of the transaction.
            (iii) For an issuer dually listed on the Exchange and an overseas stock exchange and has one class of listed shares traded on both exchanges, its market capitalisation is calculated based on the total number of issued shares and the average closing price of the shares quoted on the Exchange for the five business days preceding the date of the transaction.

            FAQ Series 1, FAQ No. 49
            LR reference: Main Board Rules 14.07(4), 19A.38A / GEM Rules 19.07(4), 25.34C
            Released on 30/3/2004 (Updated in October 2020)

            Question:

            In the case of an H-share issuer whose domestic shares are quoted on NEEQ, how should the issuer calculate its market capitalisation for the purpose of calculating the consideration ratio of a notifiable or connected transaction?

            Answer:

            The market capitalisation is calculated based on the issuer’s total number of shares in issue including H shares and domestic shares. The market value of the domestic shares is calculated by reference to the average closing price of its H shares for the 5 days preceding the date of the transaction.

            FAQ Series N/A, FAQ No. 069-2019
            LR reference: Main Board Rules 14.07(4), 19A.38A / GEM Rules 19.07(4), 25.34C
            Released on 30/09/2019 (Updated in October 2020)

            Question:

            A listed issuer proposes to settle the consideration payable for an acquisition by issuance of a convertible note.
            Is the listed issuer required to calculate the equity capital ratio? If yes, what figure should be used as the numerator of the equity capital ratio?

            Answer:

            Yes. The listed issuer is required to calculate the equity capital ratio. The numerator should be the nominal value of the maximum number of shares that may be issued by the listed issuer assuming full conversion of the convertible note.

            FAQ Series 7, FAQ No. 7
            LR reference: Main Board Rules 14.07(5) / GEM Rules 19.07(5)
            Released on 28/11/2008

            Question:

            An issuer proposes to enter into an acquisition. Its subsidiary will issue new shares to the vendor to satisfy part of the consideration.

            Is the issuer required to calculate the equity capital ratio for classifying the proposed acquisition?

            Answer:

            The equity capital ratio is intended to apply to a transaction involving issue of equity capital of the listed issuer itself as consideration, including any securities convertible into the issuer's equity capital.

            In this case, the equity capital ratio is not applicable as the proposed acquisition involves issue of the securities of a subsidiary but not the issuer.

            FAQ Series 9, FAQ No. 10
            LR reference: Main Board Rules 14.07(5) / GEM Rules 19.07(5)
            Released on 14/12/2009

            Question:

            For the purpose of computing the revenue test of a banking company, which figure should be used for the denominator?

            Answer:

            Net interest income plus other operating income. Operating income is as defined in FD-1: Financial Disclosure by Locally Incorporated Authorized Institutions in the Supervisory Policy Manual issued by the HKMA.

            FAQ Series 1, FAQ No. 50
            LR reference: Main Board Rules 14.14 / GEM Rules 19.14
            Released on 30/3/2004 (Updated in February 2020)

            Question:

            A listed issuer proposes to acquire a target company from a third party vendor. The consideration for the acquisition includes (i) a fixed amount of cash and (ii) a further amount that may be payable by the listed issuer after completion of the acquisition upon occurrence of certain future events. Such further amount will be determined based on the valuation of the target company agreed by the parties at the relevant time.

            How should the listed issuer calculate the consideration ratio?

            Answer:

            Under Main Board Rule 14.15(4) / GEM Rule 19.15(4), when calculating the consideration ratio, if the listed issuer may pay consideration in the future, the consideration is the maximum total consideration payable under the agreement.

            For the proposed acquisition of the target company, the numerator of the consideration ratio should include the fixed amount of cash as well as the maximum value of the further consideration that may be paid by the listed issuer in the future. If the total consideration is not subject to a maximum or such maximum value cannot be determined, the proposed acquisition will normally be classified as a very substantial acquisition, notwithstanding the transaction class into which it otherwise falls.

            FAQ Series 7, FAQ No. 8
            LR reference: Main Board Rules 14.15(4) / GEM Rules 19.15(4)
            Released on 28/11/2008

            Question:

            A listed issuer has been publishing unaudited quarterly results for the first 3 and 9 months of each financial year, which include a condensed consolidated balance sheet as at the end of the reporting period.

            Can the listed issuer refer to the total assets shown in the unaudited quarterly results recently published by the listed issuer when calculating the assets ratio?

            Answer:

            For a GEM issuer, GEM Rule 19.16 provides that the issuer must refer to the total assets shown in its latest published audited accounts or half-year, quarterly or other interim report (whichever is more recent) for the purpose of calculating the assets ratio. In the circumstances described, a GEM issuer can refer to the total assets shown in its latest published quarterly results when calculating the assets ratio.

            For a Main Board issuer, Main Board Rule 14.16 provides that the issuer must refer to the total assets shown in its latest published audited accounts or interim report (whichever is more recent). While the rule makes no references to quarterly accounts, where the Main Board issuer has adopted quarterly reporting as recommended by the Code on Corporate Governance Practices set out in Appendix 14 to the Main Board Rules, it is acceptable for the issuer to refer to the total assets shown in its recently published quarterly results when calculating the assets ratio.

            FAQ Series 7, FAQ No. 9
            LR reference: Main Board Rules 14.16 / GEM Rules 19.16
            Released on 28/11/2008

            Question:

            A listed issuer has recently published the preliminary announcement of its results for latest financial year according to the Listing Rules. The listed issuer has not yet published the relevant annual report. When computing the assets ratio, profits ratio and revenue ratio, can the listed issuer refer to the figures shown in the preliminary results announcement?

            Answer:

            Under Main Board Rules 14.16 and 14.17 / GEM Rules 19.16 and 19.17, the listed issuer should refer to the total assets, profits and revenue figures shown in its latest published audited accounts. Where the preliminary results announcement published by the listed issuer is based on its audited financial statements, the listed issuer should refer to the audited figures shown in such announcement for computing the assets, profits and revenue ratios.

            There may be situations where the audit of the listed issuer's accounts has not yet been completed and the listed issuer has published the preliminary results announcement based on its accounts which have been agreed with the auditors. In such circumstances, the listed issuer must ensure accuracy of the figures used for computing the assets, profits and revenue ratios. In rare circumstances, where any such figures need to be revised in the audited accounts subsequently available, the listed issuer should re-compute the relevant percentage ratios and comply with any additional requirements if the proposed transaction should fall under a higher classification.

            FAQ Series 7, FAQ No. 10
            LR reference: Main Board Rules 14.16, 14.17 / GEM Rules 19.16, 19.17
            Released on 28/11/2008

            Question:

            How should the total assets be adjusted if the dividend has a scrip alternative and subsequently scrip shares are issued?

            If the dividend is proposed by a listed subsidiary of the issuer, is any adjustment required to be made by the issuer to its total assets?

            Answer:

            A scrip dividend will not have an impact on total assets. However the issuer may not at the relevant time be able to determine to what extent scrip shares will be issued. Therefore where adjustment is being made for the proposed dividend, the issuer should assume that the total dividend is paid in cash unless the number of scrip shares to be issued is known.

            Adjustment to total assets should be made to the extent that the total consolidated assets will be reduced by the dividend to be paid by the subsidiary.

            FAQ Series 1, FAQ No. 52
            LR reference: Main Board Rules 14.16(1) / GEM Rules 19.16(1)
            Released on 30/3/2004 (updated in February 2020)

            Question:

            If an issuer has incurred a net loss in its latest published accounts, is it still required to submit a five tests calculation for all potential notifiable transactions?

            Answer:

            Yes, the issuer is still required to submit a five tests calculation, together with alternative tests in respect of profit test (such as a gross profit comparison) for our consideration.

            FAQ Series 1, FAQ No. 53
            LR reference: Main Board Rules 14.20 / GEM Rules 19.20
            Released on 30/3/2004 (updated in February 2020)

            Question:

            A listed issuer is proposing a group restructuring under which one of its wholly owned subsidiaries would transfer certain fixed assets to a 70%-owned subsidiary of the listed issuer at fair value of the assets.

            Is the proposed group restructuring subject to the requirements under Chapter 14 of the Main Board Rules / Chapter 19 of the GEM Rules?

            Answer:

            In the case of a group restructuring, the Exchange will take into account the substance of the transaction and its impact on the listed issuer group as a whole when applying the notifiable transaction requirements.

            In the circumstances described, the proposed group restructuring would involve a disposal of fixed assets by one subsidiary and an acquisition of the same assets by another subsidiary. Calculations of the percentage ratios may produce an anomalous result for the purpose of classifying the transaction. The Exchange may accept alternative size tests calculated by the listed issuer based on the net disposal of the listed issuer's interest in the fixed assets.

            FAQ Series 7, FAQ No. 2
            LR reference: Main Board Rules 14.20, 14.04(1)(a) / GEM Rules 19.20, 19.04(1)(a)
            Released on 28/11/2008

            Question:

            A listed issuer proposes to acquire a minority interest in a target company (5% of its equity capital) as an investment which will be classified as available-for-sale financial assets in the listed issuer's accounts.

            How should the listed issuer compute the assets ratio, profits ratio and revenue ratio?

            Answer:

            The proposed transaction involves acquisition of an equity capital. According to Main Board Rule 14.28 / GEM Rule 19.28, when calculating the assets, profits and revenue ratios, the value of the target company's total assets, profits and revenue calculated in accordance with Main Board Rule 14.27 / GEM Rule 19.27 is to be multiplied by the percentage of equity interest being acquired by the listed issuer.

            However, where these percentage ratios produce an anomalous result, listed issuer may submit alternative tests for the Exchange's consideration pursuant to Main Board Rule 14.20 / GEM Rule 19.20. In the circumstances described, it is normally acceptable for the listed issuer to use the fair value of the interest in the target company to be acquired (determined in accordance with the applicable accounting standards adopted by the listed issuer) as the numerator of the alternative test to the assets ratio. As to the profits and revenue ratios, the listed issuer may submit alternative tests calculated with reference to the dividend declared by the target company and any dividend policy established by the target company for the Exchange's consideration.

            FAQ Series 7, FAQ No. 12
            LR reference: Main Board Rules 14.20, 14.28 / GEM Rules 19.20, 19.28
            Released on 28/11/2008

            Question:

            A listed issuer has published its latest annual audited accounts. It has also completed the disposal of a major subsidiary to a third party after the year end, details of which were disclosed by the listed issuer.
            The listed issuer now proposes to acquire a target company. When computing the assets ratio for such acquisition, the total assets figure of the listed issuer shown in its latest audited accounts would need to be adjusted for the disposal according to Main Board Rule 14.18 / GEM Rule 19.18. When computing the profits and revenue ratios for the acquisition, would it be necessary to adjust the listed issuer's profits and revenue figures to exclude the results of the disposed subsidiary?

            Answer:

            The requirement of Main Board Rule 14.18 / GEM 19.18 only applies to the total assets figure of the listed issuer.

            Main Board Rule 14.17 / GEM Rule 19.17 provides the circumstances under which the Exchange may prepare to accept the exclusion of profits and revenue from the discontinued operations of a listed issuer for the purpose of the profits ratio and revenue ratio respectively.

            In the circumstances described, the disposal of a major subsidiary may not fall under the situation described in Main Board Rule 14.17 / GEM Rule 19.17. Nevertheless, if the calculations of the profits and/or revenue ratios produce an anomalous result, the Exchange may require the listed issuer to submit alternative size tests by excluding the results of the disposed subsidiary under Main Board Rule 14.20 / GEM Rule 19.20. The listed issuer should consult the Exchange when calculating the percentage ratios for the proposed acquisition.

            FAQ Series 7, FAQ No. 11
            LR reference: Main Board Rules 14.20, 14.17, 14.18 / GEM Rules 19.20, 19.17, 19.18
            Released on 28/11/2008 (Updated on 01/10/2019)

            Question:

            The latest audited accounts of Listco cover a period of 18 months due to the change in financial year end date.

            Should Listco use the annualised profits and revenue for computing the profits ratio and the revenue ratio?

            Answer:

            While the Listing Rules require an issuer to calculate the revenue and profits ratios based on figures in its latest audited accounts, these calculations may produce anomalous results in the circumstances described and alternative size tests using annualised figures may be acceptable. Listco should consult the Exchange if it proposes to adopt the alternative size tests.

            FAQ Series 9, FAQ No. 8
            LR reference: Main Board Rules 14.20, 14.07(2) and (3), 14.17 / GEM Rules 19.20, 19.07(2) and (3), 19.17
            Released on 14/12/2009

            Question:

            A listed issuer has recently completed an acquisition of the 80% interest in a target company, which constituted a major transaction, and it had complied with the applicable requirements under the Listing Rules. The listed issuer now proposes to acquire the remaining 20% interest in the same company which will by itself constitute a discloseable transaction.

            Would the Exchange apply Main Board Rule 14.22 / GEM Rule 19.22 to aggregate the proposed acquisition with the previous major transaction in the following scenarios?

            (a) The proposed acquisition when aggregated with the completed transaction would be classified as a major transaction.
            (b) The proposed acquisition when aggregated with the completed transaction would be classified as a very substantial acquisition.

            Answer:

            The Exchange would consider the proposed acquisition and the completed transaction as a series of transactions as they involve acquisition of interest in one particular company and are entered into by the listed issuer within a short period of time.

            In determining whether to aggregate these transactions, the Exchange would also take into account the classification of the completed transaction, and whether the series of transactions when aggregated would result in a higher transaction classification and therefore be subject to additional Rule requirements.

            In scenario (a), the listed issuer had complied with the major transaction requirements in respect of the completed transaction and the Exchange would not require the listed issuer to reclassify the proposed acquisition by aggregating it with the completed transaction.

            In scenario (b), the Exchange would require the listed issuer to aggregate the proposed acquisition with the completed transaction and the listed issuer would need to comply with the very substantial acquisition requirements in respect of the proposed acquisition.

            FAQ Series 7, FAQ No. 14
            LR reference: Main Board Rules 14.22 / GEM Rules 19.22
            Released on 28/11/2008

            Question:

            A listed issuer has recently completed an acquisition which did not constitute a notifiable transaction. The listed issuer now proposes another acquisition which will constitute a discloseable transaction on a standalone basis. However, these acquisitions when aggregated would be classified as a major transaction.

            If the Exchange requires aggregation of the currently proposed acquisition with the previous acquisition, Main Board Rule 14.22 / GEM Rule 19.22 provides that the listed issuer must comply with the requirements for the relevant classification of the transaction when aggregated. How would the major transaction requirement apply to these acquisitions?

            Answer:

            Normally, the major transaction requirement would only apply to the currently proposed acquisition but not the previous acquisition.

            Nevertheless, the listed issuer should ensure adequate information relating to the previous acquisition be disclosed in the announcement and circular of the proposed acquisition if such information is necessary for shareholders to make a properly informed decision on how to vote in respect of the proposed acquisition.

            FAQ Series 7, FAQ No. 15
            LR reference: Main Board Rules 14.22 / GEM Rules 19.22
            Released on 28/11/2008

            Question:

            The Listing Rules provide that the Exchange may require an issuer to aggregate a series of transactions if they are all completed within a 12 month period or are otherwise related.

            How is the "12 month period" determined — with reference to the date of completion of the transactions or to their agreement dates?

            Answer:

            The "12 month period" should be calculated by reference to the completion date of the previous transaction(s).

            FAQ Series 9, FAQ No. 11
            LR reference: Main Board Rules 14.22 / GEM Rules 19.22
            Released on 14/12/2009

            Question:

            If an issuer completes a series of acquisitions with different parties within a 12 month period, each of which is not major (as defined in Chapter 14) but their cumulative size exceeds the 25% threshold, will this company be treated as a Mineral Company upon completion of the transactions?

            Answer:

            Yes. The principles of aggregation under Rule 14.22 apply to transactions undertaken by all listed companies, including those that enter into a series of small acquisitions of Mineral or Petroleum Assets.

            GL52-13 Appendix 1, FAQ No. 14
            LR reference: Main Board Rules 14.22 / GEM Rules 19.22
            Released on 26/5/2010 (Updated in February 2020)

            Question:

            An issuer from time to time enters into leases (e.g. leases of properties, or leases of machinery and equipment) that are necessary for its business operations.

            Will the issuer be required to aggregate its lease transactions entered into with the same party within a period of 12-months?

            Answer:

            There will be no change in the application of the aggregation Rules to lease transactions after the issuer adopting the HKFRS/IFRS 16.

            In the circumstances described, generally the Exchange would not require aggregation of the lease transactions solely because they are made with the same party. When applying the aggregation Rules, the Exchange would consider whether the lease transactions are connected or related in substance and whether there is a concern about "splitting" of a lease transaction into smaller ones to circumvent the notifiable/connected transaction requirements. It would take into account relevant factors including:

            - whether the leases are made under a master agreement or negotiated and concluded at the same time;
            - whether the leased assets form part of one asset, and/or
            - whether the leases would together lead to substantial involvement by the issuer in a new business activity.

            (See also Listing Decisions LD76-3 (2009) and LD64-1 (2008) where the principles and guidance provided also apply to leases of properties or fixed assets by issuers.)

            Nevertheless, as the Exchange would have to consider all relevant facts and circumstances of the particular case when determining whether aggregation of transactions is required, the issuer should consult the Exchange as required under Main Board Rule 14.23B or 14A.84.

            FAQ Series N/A, FAQ No. 046-2018
            LR reference: Main Board Rules 14.22, 14.23, 14A.24(1), 14A.24(3), 14A.31 / GEM Rules 19.22, 19.23, 20.22(1), 20.22(3), 20.29
            Released on 28/09/2018

            Question:

            A listed issuer proposes to acquire certain wealth management products (e.g. index or asset linked deposits) from a licensed bank (Bank A) for treasury management purpose. It holds other wealth management products issued by Bank A and other banks.

            How should the issuer compute the percentage ratios for the proposed transaction under Chapter 14?

            Answer:

            Normally the issuer is required to aggregate its investment in wealth management products acquired from the same bank.

            In computing the percentage ratios, the numerator of the assets ratio and the consideration ratio would be the sum of the acquisition costs of (i) wealth management products to be acquired under the proposed transaction and (ii) wealth management products which were acquired from Bank A which remain outstanding at the time of the proposed transaction. The numerator of the revenue ratio and profit ratio would be calculated based on the aggregate annual interest income recognised by the issuer from these products.

            FAQ Series N/A, FAQ No. 074-2021
            LR reference: Main Board Rules 14.22, 14.23 / GEM Rules 19.22, 19.23
            Released on 21/5/2021

            Question:

            Should an issuer consult the Exchange under Main Board Rule 14.23B (GEM Rule 19.23B) if:

            (a) the proposed transactions, even when aggregated with the previous transaction(s), will not exceed the percentage ratios to be treated as a notifiable transaction or a connected transaction subject to the announcement, reporting and/or shareholders' approval requirements; or
            (b) the issuer has al decided to aggregate the proposed transaction with the previous transaction(s) and comply with the requirements for the relevant classification of the transaction when aggregated?

            Answer:

            No. The purpose of the Rules is to provide guidance to issuers to comply before entering into the transaction. Circumstances in (a) and (b) do not involve any risk of non-compliance with the Rules.

            FAQ Series 8, FAQ No. 43.
            LR reference: Main Board Rules 14.23A, 14A.84, 14A.85, 14A.86 / GEM Rules 19.23A, 20.82, 20.83, 20.84
            Released on 28/11/2008 (updated in February 2020)

            Question:

            Main Board Rule 14.23A provides that the Exchange will not aggregate a series of transactions carried out by an issuer in the course of construction, development or refurbishment of an asset for the issuer's own use in its ordinary and usual course of business if the sole basis for aggregation is that the transactions form parts of one asset.

            Does the Rule apply to the transactions carried out by Listco in the course of construction of a property for (1) its own use as an office; or (2) rental purpose as an investment property?

            Answer:

            (1) Given that the property is constructed for Listco's own use in its ordinary and usual course of business, the Rule will apply in the circumstances described.
            (2) The Rule will apply if property investment is an ordinary and usual course of business of Listco.

            In the above situations, Listco should note that each individual contract or agreement with a third party vendor is itself a transaction and subject to the notifiable transaction requirements if it exceeds the threshold(s) triggering the notifiable transaction rules.

            FAQ Series 9, FAQ No. 12
            LR reference: Main Board Rules 14.23A / GEM Rules 19.23A
            Released on 14/12/2009

            Question:

            Under the amended rule, if a transaction involves a major acquisition and a discloseable disposal, does it mean that only the acquisition and not the disposal requires shareholder approval?

            Answer:

            The rule amendment only clarifies the content requirements for the circular. It does not change the requirement as to how to classify a transaction as a whole to determine whether shareholder approval is required. In the circumstances described, the transaction as a whole would be classified as a major transaction and requires shareholder approval.

            FAQ Series 11, FAQ No. 9
            LR reference: Main Board Rules 14.24 / GEM Rules 19.24
            Released on 20/5/2010

            Question:

            Listco proposes to sell its interest in a subsidiary in return for cash and the buyer's interest in a target (the Transaction). The sale of the subsidiary is a major transaction and the acquisition of the target is a discloseable transaction.

            Does the circular need to include the following information?

            an accountants' report on the target company
            a valuation report on the target's property interests (the target is a property company)
            pro forma financial information showing the impact of the Transaction on Listco

            Answer:

            As the acquisition is a discloseable transaction, the circular need not contain an accountants' report on the target or a valuation report on the target's property interests.

            The circular also does not need to contain pro forma financial information on the Transaction because the Rules do not require this information for a major disposal or a discloseable acquisition.

            FAQ Series 11, FAQ No. 10
            LR reference: Main Board Rules 14.24 / GEM Rules 19.24
            Released on 20/5/2010

            Question:

            A listed issuer proposes to acquire an equity interest in a target company which has commenced operation for less than one year. Would the listed issuer be required to use the annualized profits or revenue (as the case may be) of the target company as the numerators of the profits ratio or the revenue ratio?

            Answer:

            Under Main Board Rules 14.26 and 14.27/ GEM Rules 19.26 and 19.27, the numerators of the profits ratio and the revenue ratio are to be calculated by reference to the profits and revenue attributable to the target company's capital as disclosed in its accounts.

            Listing Rules do not require the listed issuer to annualize the profits or the revenue of the target company when computing the percentage ratios. However, the results of such calculations may be regarded by the Exchange as anomalous and alternative tests may be required to assess the relative size of the target company compared to the listed issuer group.

            FAQ Series 7, FAQ No. 13
            LR reference: Main Board Rules 14.26, 14.27 / GEM Rules 19.26, 19.27
            Released on 28/11/2008

            Question:

            If a listed subsidiary conducts a placing of new shares by way of a general mandate, would it also constitute a notifiable transaction for the listed parent?

            Answer:

            An allotment of shares by the listed subsidiary would also be a deemed disposal for the listed parent as it would result in a reduction in the percentage equity interest of the listed parent in such subsidiary. Accordingly, the transaction, depending on the size tests as defined in Main Board Rule 14.04(9) / GEM Rule 19.04(9), may fall to be treated as a very substantial disposal, major transaction or discloseable transaction of the listed parent and subject to relevant notifiable transaction requirements under Main Board Chapter 14 and GEM Chapter 19.

            Where the size of the deemed disposal falls to be a major transaction or above, the placing is subject to approval by shareholders of the listed parent. The Exchange ordinarily expects the listed parent in these circumstances to maintain control over the matter by making the general mandate of the listed subsidiary conditional on it not triggering a major transaction for the listed parent. Issuers should make prior consultation with the Exchange if they anticipate any practical issues relating to compliance in this connection.

            FAQ Series 8, FAQ No. 42. Issue 10
            LR reference: Main Board Rules 14.29, 14.04 / GEM Rules 19.29, 19.04
            Released on 28/11/2008

            Question:

            What are the procedures issuers should follow prior to the morning pre-opening trading session or the afternoon trading session in reviewing the publication status of its announcement and considering whether notifying the HKEx that a trading suspension may be required?

            Answer:

            The assessment of whether a trading halt or suspension will be required is based on the trading halt or suspension policy having regard to the two factors: nature of announcement and publication of the announcement on the HKEx website.

            Trading halt or suspension arising from publication failures will be required where the subject matter of the announcement is information necessary to avoid a false market in the issuer's securities or is inside information which needs to be disclosed under the Inside Information Provisions (Listing Rules MB 13.09 / GEM 17.10) or relates to a notifiable transaction and a trading halt or suspension is required under Listing Rules MB 14.37 / GEM 19.37. For pre-vetted announcements, this determination will be agreed with the Listing Division of the HKEx before clearance of the announcement. For post-vetted announcement, the issuer will make the assessment. In either case this assessment should be also generally reflected in the headline categories selected by the issuers.

            An issuer should take reasonable steps to gain comfort that publication of its announcement on the HKEx website has been successful. Such steps may include noting receipt of e-mail confirmation from HKEx and checking the HKEx website directly.

            Where, for whatever reason the publication of the announcement on the HKEx website is delayed (by reference to the trading halt or suspension policy above), the issuer should contact the Listing Division of the HKEx immediately and where appropriate, request a trading halt or suspension.

            FAQ Series 3, FAQ No. 144
            LR reference: Main Board Rules 13.09, 13.10A, 14.37 / GEM Rules 17.10, 17.11A, 19.37
            Released on 22/3/2007 (Updated on 2/1/2013)

            Question:

            What is the trading halt/ suspension policy applicable to Main Board and GEM issuers in respect of publication of announcements containing inside information and/or notifiable transactions?

            Answer:

            Trading in the securities of an issuer may be halted or suspended due to publication failure (i.e. to publish an announcement on HKEx websites) where the subject matter of the announcement is information discloseable under Listing Rules MB 13.09/ GEM 17.10 or relates to a notifiable transaction and trading halt or suspension is required under Listing Rules MB 14.37/ GEM 19.37. This is consistent with the principle set out in Chapter 6 of Main Board Rules/ Chapter 9 of GEM Rules on trading halts and suspensions, i.e. that halt or suspension is only required where the HKEx considers it necessary for the protection of the investor or the maintenance of an orderly market.

            Where an obligation to issue an announcement containing inside information has arisen for an issuer, it should publish the announcement during the next available publication window. For example, where the issuer has signed an agreement in relation to a notifiable transaction that is inside information after trading hours on a normal business day, and an announcement is published on the HKEx website by 8.30 a.m. of the next business day (i.e. either during the publication windows from 4.30 p.m. to 11.00 p.m. of that business day, or between 6.00 a.m. to 8.30 a.m. of the next business day), no trading halt or suspension would be neces