Entire Section

  • EQUITY SECURITIES

    • Chapter 10 Methods of Listing

      • General

        • 10.01

          A new applicant may bring securities to listing by any of the following methods:—

          (1) an offer for subscription;
          (2) an offer for sale;
          (3) a placing;
          (4) an introduction; or
          (5) such other method as may be accepted by the Exchange.

        • 10.02

          A listed issuer may bring equity securities (whether or not a class al listed) to listing by any of the following methods:—

          (1) an offer for subscription;
          (2) an offer for sale;
          (3) a placing;
          (4) a rights issue;
          (5) an open offer;
          (6) a capitalisation issue;
          (7) a consideration issue;
          (8) an exchange, substitution or conversion of securities; or
          (9) such other method as may be accepted by the Exchange.

      • Offer for subscription

        • 10.03

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

        • 10.04

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

        • 10.05

          An offer for subscription must be supported by a listing document which must comply with the relevant requirements of Chapter 14.

        • 10.06

          Offers for subscription require compliance with the publication requirements set out in rules 16.07 and 16.13 or 16.14.

      • Offer for sale

        • 10.07

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

        • 10.08

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

        • 10.09

          An offer for sale must be supported by a listing document which must comply with the relevant requirements of Chapter 14.

        • 10.10

          Offers for sale require compliance with the publication requirements set out in rules 16.07 and 16.13 or 16.14.

      • Placing

        • 10.11

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

        • 10.11A

          A listing by a new applicant must include an offering to the public of not less than 10% of all securities offered.

        • 10.12

          A placing by or on behalf of a new applicant or by or on behalf of a listed issuer of securities of a class new to listing must be supported by a listing document which must comply with the relevant requirements of Chapter 14 and such a placing must comply with the following specific requirements:—

          (1) [Repealed 15 February 2018]
          (1A) No allocations to the following persons will be permitted without the prior written consent of the Exchange:
          (a) "connected clients" of the lead broker or of any distributors as defined in Note 2 of rule 10.12(4);
          ((b) directors or existing shareholders of the new applicant or the listed issuer, as the case may be, or their close associates, whether in their own names or through nominees unless the condition in rule 13.02(1) is fulfilled; or
          (c) nominee companies unless the name of the ultimate beneficiary of the securities is disclosed.
          (2) Details of the placing must be published in accordance with the requirements of rules 16.07 or 16.08, as applicable, and (as regards the results) in accordance with sub-paragraph (4) below and rule 16.16.
          (3) [Repealed 15 February 2018]
          (4) The announcement of the results of the placing required pursuant to rule 16.16 must include a brief generic description of the placees. If securities have been placed with different groups of placees, then the announcement must contain a description of each group and the number of shares placed with each group, provided that certain types of placee (as specified in Note 1 to this rule) must be identified on an individually-named basis, with the number of shares placed with each named placee also being disclosed. In the case of an initial public offering effected by way of a placing or which included a placing tranche, the announcement must also include information on:—
          (a) the level of interest in the placing;
          (b) a table showing the distribution of the placing shares; and
          (c) an analysis of the distribution, in particular, the concentration of the placing shares, including but not limited to the number of placing shares that are placed with the top 1, 5, 10 and 25 placees. Where, in the view of the Exchange, there is a high concentration of shares being marketed for which listing is sought with a few placees, a statement substantially in the following form:

          "Investors should be aware that the concentration of shareholders may affect the liquidity of the shares of the [issuer]. Consequently, shareholders and potential investors are advised to exercise caution when dealing in such shares."
          Notes:
          1 The purpose of this rule is to enable shareholders and investors to understand the broad composition of the ownership of the placed shares immediately prior to trading in those shares. The groups of placees which the issuer must identify in the announcement, to the extent applicable, include:—
          (a) [Repealed 3 June 2010];
          (b) directors and their close associates (on an individually-named basis);
          (c) substantial shareholders and their close associates (on an individually-named basis);
          (d) in relation only to an initial public offering effected by way of a placing or which included a placing tranche, significant shareholders and their close associates (on an individually-named basis);
          (e) employees;
          (f) the Sponsor and its close associates;
          (g) the lead broker and/or any distributor and any connected clients of either (as defined in Note 2 below);
          (h) customers or clients of the issuer;
          (i) suppliers to the issuer; and
          (j) the underwriters (if any) and their close associates, if different from (f) or (g) above.
          The announcement should, if applicable, give particulars of any duplication between the descriptions of placees and must indicate the number and proportion of shares placed to the public.
          2 For the purposes of sub-paragraph (g) of Note 1 above "connected client" in relation to an Exchange Participant means any client of such Exchange Participant who is:—
          (a) a partner of such Exchange Participant;
          (b) an employee of such Exchange Participant;
          (c) where the Exchange Participant is a company,
          (i) any person who is a substantial shareholder of such Exchange Participant; or
          (ii) a director of such Exchange Participant;
          (d) the spouse or infant child or step child of any individual described in (a) to (c)above;
          (e) a person in his capacity as trustee of a private or family trust (other than a pension scheme) the beneficiaries of which include any person in (a) to (d)above;
          (f) a close relative of any person in (a) to (d) above where his account is managed by such Exchange Participant in pursuance of a discretionary managed portfolio agreement; or
          (g) a company which is a member of the same group of companies as such Exchange Participant.
          (5) Dealings in the securities cannot commence until the Exchange has been supplied with and approved a list setting out the names, addresses and identity card or passport numbers (where individuals) and the names, addresses and business registration numbers (where companies) of all placees, the names and addresses of the beneficial owners of the securities (in the case of nominee companies) and the amounts taken up by each placee. The Exchange reserves the right to require submission of such further information (on an electronic spreadsheet or such other format as it may request) on the placees as it may consider necessary for the purpose of establishing their independence, including without limitation details of beneficial ownership.
          (6) Separate Marketing Statements in the form set out in Appendix 5D signed by each of: (a) the lead broker; (b) any distributor(s); and (c) any Exchange Participant referred to in rules 12.26(6)(a) and 12.27(6)(a), must be lodged with the Exchange before dealings commence.
          (7) The lead broker and each distributor and Exchange Participant referred to in sub-paragraph (6) above must keep a record of their placees for at least 3 years following the placing. This record should contain the information referred to in sub-paragraph (5) above.

        • 10.13

          Placings of securities by a listed issuer will be allowed only in the following circumstances:—

          (1) where the placing falls within any general mandate given to the directors of the listed issuer by the shareholders in accordance with rule 17.41(2); or
          (2) where the placing is specifically authorised by the shareholders of the listed issuer in general meeting ("specific mandate placing").

        • 10.14

          Placings by a listed issuer made in either of the circumstances set out in rule 10.13 are required to comply with the requirements of rule 10.12 (excluding sub-paragraphs (2), (6) and (7) in the case of a placing of securities of a class al listed). Specific mandate placings are also required to comply with rule 10.44A.

        • 10.15

          A placing by or on behalf of a listed issuer of securities of a class al listed does not have to be supported by a listing document but if a prospectus or other listing document is required, it must comply with the relevant requirements of Chapter 14.

        • 10.16

          The Exchange may be prepared to allow preliminary arrangements and placings to be made to dispose of securities before the start of dealings where necessary to comply with the requirements of rule 11.23 that a minimum prescribed percentage of any class of listed securities must at all times remain held by the public.

      • Introduction

        • 10.17

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

        • 10.18

          Introductions will normally be appropriate in the following circumstances:—

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

          Note: Any issuer contemplating an introduction of the type referred to in sub-paragraph (3) is referred to the provisions of rule 24.05(6).

        • 10.19

          An introduction will only be permitted in exceptional circumstances if there has been a marketing of the securities in Hong Kong within the 6 months prior to the proposed introduction where such marketing was made conditional on listing being granted for those securities. Furthermore, there may be other factors, such as a pre-existing intention to dispose of securities, a likelihood of significant public demand for the securities or an intended change of the issuer's circumstances, which would render an introduction unacceptable to the Exchange. An introduction will not be permitted if a change in the nature of the business is in contemplation.

        • 10.20

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

        • 10.21

          An introduction must be supported by a listing document which must comply with the relevant requirements of Chapter 14.

        • 10.22

          Introductions require compliance with the publication requirements set out in rule 16.08.

      • Rights issue

        • 10.23

          A rights issue is an offer by way of rights to existing holders of securities which enables those holders to subscribe securities in proportion to their existing holdings. Rights issue need not be underwritten.

        • 10.24

          A rights issue must be made conditional on shareholders' approval in the circumstances set out in rule 10.29.

          Note: See rule 10.44A for the additional requirements relating to rights issues, open offers and specific mandate placings.

        • 10.24A

          Where rights issues are underwritten, normally the underwriters must satisfy the following requirements:

          (1) the underwriters are persons licensed or registered under the Securities and Futures Ordinance for Type 1 regulated activity and their ordinary course of business includes underwriting of securities, and they are not connected persons of the issuers concerned; or
          (2) the underwriters are the controlling or substantial shareholders of the issuers.

          The rights issue announcement, listing document and circular (if any) must contain a statement confirming whether the underwriter(s) comply with rule 10.24A(1) or (2).

        • 10.25

          If a rights issue is not fully underwritten the listing document must contain full disclosure of the fact that it is not fully underwritten and all other relevant circumstances, including the consequential risks in dealing in such rights, and a statement of the minimum amount, if any, which must be raised in order for the issue to proceed. Such disclosure must appear on the front cover of the listing document and in a prominent position at the front of the document and be in a form approved by the Exchange.

          In addition, the listing document must contain a statement of the intended application of the net proceeds of the issue according to the level of subscriptions and a statement in respect of each substantial shareholder as to whether or not that substantial shareholder has undertaken to take up his or its entitlement in full or in part and if so on what conditions, if any.

        • 10.26

          If a rights issue is not fully underwritten:—

          (1) the issuer must comply with any applicable statutory requirements regarding minimum subscription levels; and
          (2) a shareholder who applies to take up his or its full entitlement may unwittingly incur an obligation to make a general offer under the Takeovers Code, unless a waiver from the Executive (as defined in the Takeovers Code) has been obtained.

          Note: In the circumstances set out in rule 10.26(2), an issuer may provide for shareholders to apply on the basis that, if the issue is not fully taken up, their application can be "scaled" down to a level which does not trigger an obligation to make a general offer.

        • 10.27

          If a rights issue is underwritten and the underwriter is entitled to terminate that underwriting upon the occurrence of any event after dealings in the rights in nil-paid form have commenced, then the rights issue listing document must contain full disclosure of that fact. Such disclosure must:—

          (1) appear on the front cover of the listing document and in a prominent position at the front of the document;
          (2) include a summary of the termination provisions and explain when they will cease to be exerciseable and such summary must appear in a prominent position in the document;
          (3) detail any consequential risks in dealing in such rights; and
          (4) be in a form approved by the Exchange.

        • 10.28

          If a rights issue is underwritten (whether in whole or in part) by a person or persons whose ordinary business does not include underwriting, the listing document must contain full disclosure of that fact.

        • 10.29

          If the proposed rights issue would increase either the number of issued shares or the market capitalisation of the issuer by more than 50% (on its own or when aggregated with any other rights issues or open offers announced by the issuer (i) within the 12 month period immediately preceding the announcement of the proposed rights issue or (ii) prior to such 12 month period where dealing in respect of the shares issued pursuant thereto commenced within such 12 month period, together with any bonus securities, warrants or other convertible securities (assuming full conversion) granted or to be granted to shareholders as part of such rights issues or open offers):—

          (1) the rights issue must be made conditional on approval by shareholders in general meeting by a resolution on which any controlling shareholders and their associates or, where there are no controlling shareholders, directors (excluding independent non-executive directors) and the chief executive of the issuer and their respective associates shall abstain from voting in favour. The issuer must disclose the information required under rule 2.28 in the circular to shareholders; and
          (2) the issuer shall set out in the circular to shareholders the purpose of the proposed rights issue, together with the total funds expected to be raised and a detailed breakdown and description of the proposed use of the proceeds. The issuer shall also include the total funds raised and a detailed breakdown and description of the funds raised on any issue of equity securities in the 12 months immediately preceding the announcement of the proposed rights issue, the use of such proceeds, the intended use of any amount not yet utilised and how the issuer has dealt with such amount.

        • 10.29A

          Where shareholders' approval is required under rule 10.29, the Exchange reserves the right to require the following parties to abstain from voting in favour of the relevant resolution at the general meeting:

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

          The issuer must disclose the information required under rule 2.28 in the circular to shareholders.

        • 10.30

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

          Note: Part A of Appendix 2 contains further provisions which are relevant to rights issues.

        • 10.31

          (1) In every rights issue, the issuer must make arrangements to:—
          (a) dispose of securities not subscribed by allottees under provisional letters of allotment or their renouncees by means of excess application forms, in which case such securities must be available for subscription by all shareholders and allocated on a fair basis; or
          (b) dispose of securities not subscribed by allottees under provisional letters of allotment or their renouncees by offering the securities to independent placees for the benefit of the persons to whom they were offered by way of rights.
          The arrangements described in rule 10.31(1)(a) or (b) must be fully disclosed in the rights issue announcement, listing document and any circular.
          (2) Where any of the issuer's controlling or substantial shareholders acts as an underwriter or sub-underwriter of the rights issue, the issuer must make the arrangements described in rule 10.31(1)(b).
          (3) Where arrangements described in rule 10.31(1)(a) are made:
          (a) the basis of allocation of the securities available for excess applications must be fully disclosed in the rights issue announcement, listing document and any circular; and
          (b) the issuer should take steps to identify the excess applications made by any controlling shareholder and its associates (together, the “relevant shareholders”), whether in their own names or through nominees. The issuer should disregard their excess applications to the extent the total number of excess securities they have applied for exceeds a maximum number equivalent to the total number of securities offered under the rights issue minus the number of securities taken up by the relevant shareholders under their assured entitlements.

        • 10.32

          A rights issue must be supported by a listing document which must comply with the relevant requirements of Chapter 14.

        • 10.33

          Rights issues require compliance with the publication requirements set out in rule 16.15.

      • Open offer

        • 10.34

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

        • 10.35

          An open offer must be made conditional on shareholders' approval in the circumstances set out in rule 10.39.

          Note: See rule 10.44A for the additional requirements relating to rights issues, open offers and specific mandate placings.

        • 10.36

          In relation to underwriting of open offers, the requirements under rules 10.24A, 10.25, 10.26 and 10.28 apply in their entirety to open offers with the term "rights issue" replaced by open offers.

        • 10.37

          [Repealed 3 July 2018]

        • 10.38

          [Repealed 3 July 2018]

        • 10.39

          A proposed open offer must be made conditional on minority shareholders' approval in the manner set out in paragraphs (1) and (2) below, unless the securities will be issued by the listed issuer under the authority of a general mandate granted to them by shareholders in accordance with rules 17.41(2) and 17.42B.

          (1) the open offer must be made conditional on approval by shareholders in general meeting by a resolution on which any controlling shareholders and their associates or, where there are no controlling shareholders, directors (excluding independent non-executive directors) and the chief executive of the issuer and their respective associates shall abstain from voting in favour. The issuer must disclose the information required under rule 2.28 in the circular to shareholders; and
          (2) the issuer shall set out in the circular to shareholders the purpose of the proposed open offer, together with the total funds expected to be raised and a detailed breakdown and description of the proposed use of the proceeds. The issuer shall also include the total funds raised and a detailed breakdown and description of the funds raised on any issue of equity securities in the 12 months immediately preceding the announcement of the proposed open offer, the use of such proceeds, the intended use of any amount not yet utilised and how the issuer has dealt with such amount.

        • 10.39A

          Where shareholders' approval is required under rule 10.39, the Exchange reserves the right to require the following parties to abstain from voting in favour of the relevant resolution at the general meeting:

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

          The issuer must disclose the information required under rule 2.28 in the circular to shareholders.

        • 10.40

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

        • 10.41

          [Repealed 3 July 2018]

        • 10.42

          (1) In every open offer the issuer must make arrangements to:—
          (a) dispose of securities not validly applied for by shareholders under their assured allotments by means of excess application forms, in which case such securities must be available for subscription by all shareholders and allocated on a fair basis; or
          (b) dispose of securities not validly applied for by shareholders under their assured allotments by offering the securities to independent placees for the benefit of those shareholders.
          The arrangements described in rule 10.42(1)(a) or (b) must be fully disclosed in the open offer announcement, listing document and any circular.
          (2) Where any of the issuer's controlling or substantial shareholders acts as an underwriter or sub-underwriter of the open offer, the issuer must make the arrangements described in rule 10.42(1)(b).
          (3) Where arrangements described in rule 10.42(1)(a) are made:
          (a) the basis of allocation of the securities available for excess applications must be fully disclosed in the open offer announcement, listing document and any circular; and
          (b) the issuer should take steps to identify the excess applications made by any controlling shareholder and its associates (together, the “relevant shareholders”), whether in their own names or through nominees. The issuer should disregard their excess applications to the extent the total number of excess securities they have applied for exceeds a maximum number equivalent to the total number of securities offered under the open offer minus the number of securities taken up by the relevant shareholders under their assured entitlements.

        • 10.43

          An open offer must be supported by a listing document which must comply with the relevant requirements of Chapter 14.

        • 10.44

          Open offers require compliance with the publication requirements set out in rule 16.13.

      • Restrictions on rights issues, open offers and specific mandate placings

        • 10.44A

          A listed issuer may not undertake a rights issue, open offer or specific mandate placing that would result in a theoretical dilution effect of 25% or more (on its own or when aggregated with any other rights issues, open offers, and/or specific mandate placings announced by the issuer (i) within the 12 month period immediately preceding the announcement of the proposed issue or (ii) prior to such 12 month period where dealing in respect of the shares issued pursuant thereto commenced within such 12 month period, together with any bonus securities, warrants or other convertible securities (assuming full conversion) granted or to be granted to shareholders as part of such rights issues, open offers and/or specific mandate placings), unless the issuer can demonstrate that there are exceptional circumstances (for example, the issuer is in financial difficulties and the proposed issue forms part of the rescue proposal).
           
          Notes:
           
          1.    Theoretical dilution effect of an issue refers to the discount of the "theoretical diluted price" to the "benchmarked price" of shares.
           
          (a)    The "theoretical diluted price" means the sum of (i) the issuer's total market capitalization (by reference to the "benchmarked price" and the number of issued shares immediately before the issue) and (ii) the total funds raised and to be raised from the issue, divided by the total number of shares as enlarged by the issue.
           
          (b)    The "benchmarked price" means the higher of:
           
          (i)    the closing price on the date of the agreement involving the issue; and
           
          (ii)    the average closing price in the 5 trading days immediately prior to the earlier of:
           
          (1)    the date of announcement of the issue;
           
          (2)    the date of the agreement involving the issue; and
           
          (3)    the date on which the issue price is fixed.
           
          (c)    Where aggregation of a series of rights issues, open offers and/or specific mandate placings is required, the theoretical dilution effect would be calculated as if the relevant rights issues, open offers and/or specific mandate placings were all made at the same time as the first issue of the series.

          For the purpose of deterpmining the theoretical diluted price in paragraph (a) above, the total funds raised and to be raised from the issues would be calculated by reference to (i) the total number of new shares issued and to be issued and (ii) the weighted average of the price discounts of the issues (each price discount is measured by comparing the issue price against the benchmarked price at the time of that issue).
           
          2.    Issuers should consult the Exchange before they announce rights issues, open offers or specific mandate placings that may trigger the 25% threshold set out in rule 10.44A.

        • 10.44B

          The Exchange may exercise its discretion to withhold approval for, or impose additional requirements on, any rights issue, open offer or specific mandate placing that does not fall into rule 10.44A if in the opinion of the Exchange, such issue is inconsistent with the general principles of listing set out in rule 2.06, having regard to its terms (for example, a very large issue size or price discount).

      • Capitalisation issue

        • 10.45

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

        • 10.46

          A capitalisation issue must be supported by a listing document, in the form of a circular to shareholders, which must comply with the relevant requirements of Chapter 14.

      • Consideration issue

        • 10.47

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

        • 10.48

          A consideration issue must be announced by the issuer in accordance with rules 19.34 and 19.35.

      • Exchange, substitution or conversion

        • 10.49

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

          (1) the exercise of options, warrants or similar rights to subscribe or purchase securities as granted in accordance with Chapter 21;
          (2) the conversion of convertible equity securities as issued in accordance with Chapter 22;
          (3) the exercise of options granted to or for the benefit of participants as granted in accordance with Chapter 23; and
          (4) the conversion of convertible debt securities in accordance with Chapter 34.

        • 10.50

          An exchange or a substitution of securities must be supported by a listing document, in the form of a circular to shareholders, which must comply with the relevant requirements of Chapter 14.

      • Other methods

        • 10.51

          Securities may also be brought to listing by:—

          (1) an issue of new shares as a result of a consolidation, sub-division or capital reduction of existing listed securities; or
          (2) such other methods as the Exchange may from time to time approve.

        • 10.52

          An issue of new shares as a result of a consolidation, sub-division or capital reduction must be supported by a listing document, in the form of a circular to shareholders, which must comply with the relevant requirements of Chapter 14.

    • Chapter 11 Qualifications for Listing

      • Preliminary

        • 11.01

          This Chapter sets out the basic conditions which have to be met as a pre-requisite to the listing of equity securities. They apply to every method of listing and to both new applicants and listed issuers except where otherwise stated. Further conditions which have to be met by overseas issuers and PRC issuers are set out in Chapters 24 and 25. Issuers are reminded:—

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

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

          Note: Queries should be addressed to the Listing Division and should, so far as practicable, be made by the Sponsor (other than in circumstances where the issuer is not required to have (or does not otherwise retain) a Sponsor).

        • 11.02

          A listed issuer shall, prior to their issue, apply for the listing of any further securities which are of the same class as securities al listed and shall not issue such securities unless approval for the listing of those securities has been granted by the Exchange.

        • 11.03

          A new applicant will not be rendered unsuitable for listing on the grounds that any director or shareholder has an interest in a business which competes or may compete with the new applicant's business.

        • 11.04

          Full and accurate disclosure of any business or interest of each director, controlling shareholder and, in relation only to the initial listing document, substantial shareholder and the respective close associates of each that competes or may compete with the business of the group and any other conflicts of interest which any such person has or may have with the group must be disclosed in each listing document and circular required pursuant to the GEM Listing Rules (excluding any Explanatory Statement issued pursuant to rule 13.08) and in the annual report and accounts, half-year report and quarterly reports of the listed issuer.

          Notes:

          1 [Repealed 3 June 2010]
          2 Each of the documents referred to in this rule is required to set out the interests of directors and, in relation only to the initial listing document, substantial shareholders (including the interests of their respective close associates) under a specific heading and both the heading and information must be given suitable prominence within the document.
          3 Of the interests required to be disclosed pursuant to this rule, a director or substantial shareholder must include any directorship or ownership of an entity engaged in a business which competes or is likely to compete with the business of the group. The disclosure should include the name of each such entity, the nature of its business and details of the directorship and/or ownership of the issuer's directors and substantial shareholders and their respective close associates in such entity.
          4 See also paragraph 27A of Appendix 1A.

      • General conditions applicable to all issuers

        • 11.05

          The issuer must be duly incorporated or otherwise established under the laws of Hong Kong, the PRC, Bermuda or the Cayman Islands and must be in conformity with those laws, including all such laws relevant to the allotment and issue of securities, and with its memorandum and articles of association or equivalent documents. The issuer's memorandum and articles of association must comply with Appendix 3 and, in addition (in the case of overseas issuers incorporated or established in specified jurisdictions) with Appendix 11.

        • 11.06

          (1) Both the issuer and its business must, in the opinion of the Exchange, be suitable for listing. Without limiting the generality of this rule, an issuer will not be regarded as suitable for listing if its group's assets consist wholly or substantially of cash and/or short-term investments (as defined in the notes to rule 19.82).
             
          (2) Cash and/or short-term investments held by a member of an issuer's group that is a banking company (as defined in rule 20.86), an insurance company (as defined in rule 19.04) or a securities house (as defined in rule 19.04) will normally not be taken into account when applying rule 11.06(1).
             
           
          Note: This exemption will not apply to an issuer that operates a securities house where the Exchange has concerns that the issuer is holding cash and short-term investments through a member to circumvent rule 11.06(1). For example, an issuer holding excessive cash and/or securities investments cannot circumvent the rule by holding such assets through a member that is a licensed broker with minimal brokerage operations. The Exchange will apply a principle based approach and consider, among others, the cash and/or short-term investments in light of the member’s operating model and its cash needs for the purpose of its regulated activities, which should be substantiated by its historical track record.

        • 11.07

          The issuer must have persons appointed to the following offices and, or to perform the following roles and the issuer must ensure that such persons have satisfied the following rules prior to appointment:—

          (1) directors — rules 5.02 and 5.05;
          (2) company secretary — rule 5.14;
          (3) compliance officer — rule 5.19;
          (4) authorised representatives — rule 5.24; and
          (5) members of the audit committee — rules 5.28 and 5.29.

        • 11.08

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

        • 11.09

          Issuers must comply with Chapter 6A, in particular, with respect to the appointment of a Sponsor and a Compliance Adviser.

        • 11.10

          A new applicant and, if required pursuant to rule 7.01, a listed issuer must have an accountants' report prepared in accordance with Chapter 7, covering (subject to rule 11.14) in the case of a new applicant, at least the 2 financial years immediately preceding the issue of the listing document.

          Note: The accountants' report must cover a trading record period of at least the 2 financial years preceding the issue of the listing document in the case of a new applicant described in rule 11.12A. For general guidance, where the issuer has a longer operating history of more than two years, the Exchange would encourage voluntary disclosure of three years of financial results in the accountants' report.

      • Additional conditions applicable to new applicants

        • Accountants' report (11.11-11.14)

          • 11.11

            In the case of a new applicant, the latest financial period reported on by the reporting accountants must not have ended more than 6 months before the date of the listing document.

          • 11.12 [Repealed]

            [Repealed 1 July 2008]

          • 11.12A

            (1) A new applicant or its group (excluding any associated companies, joint ventures and other entities whose results are recorded in the issuer's financial statements using the equity method of accounting or proportionate consolidation) must have an adequate trading record of at least two financial years comprising a positive cash flow generated from operating activities in the ordinary and usual course of business before changes in working capital and taxes paid. Such positive cash flow from operating activities carried out by the new applicant, or its group, that are to be listed, must be of at least HK$30,000,000 in aggregate for the two financial years immediately preceding the issue of the listing document.

            Note: A statement of cash flow prepared using the indirect method for submission to the Exchange for the purpose of satisfying rule 11.12A must also be included in the prospectus for disclosure purpose, if it is not al included in the accountants' report. Details regarding cash flow statements prepared under the indirect method are further described under the relevant accounting standard dealing with cash flow statements in accordance with HKFRS, IFRS or CASBE.
            (2) The applicant must have had continuity of ownership and control throughout the full financial year immediately preceding the issue of the listing document and up until the date of listing; and
            (3) The applicant must have been under substantially the same management throughout the 2 full financial years immediately preceding the issue of the listing document and up until the date of listing.

          • 11.13

            In the event that the company responsible for carrying on the active business is not the new applicant itself, such business must be carried on by a subsidiary or subsidiaries of the new applicant, provided that in relation to any such subsidiary (an "active subsidiary"):—

            (1) the new applicant must control the composition of the board of directors of that active subsidiary and of any intermediate holding company; and
            (2) the new applicant must have an effective economic interest of no less than 50 per cent in that active subsidiary.

          • 11.14

            The Exchange may accept a trading record period of less than two financial years for the purposes of rule 11.12A (and an accountants' report covering a shorter period than that specified in rule 11.10) and waive or vary the ownership and management requirements in rule 11.12A(2) and (3) for prospective new applicants with reasons acceptable to the Exchange in the following cases:

            (1) in respect of newly-formed "project" companies (for example a company formed for the purposes of a major infrastructure project);
            (2) in respect of Mineral Companies; and
            (3) in exceptional circumstances under which the Exchange considers it desirable to accept a shorter period.

            Note: Where the Exchange accepts a trading record of less than two financial years, the applicant must nevertheless still meet the cash flow requirement of HK$30 million for that shorter trading record period.

        • Business objectives (11.15)

          • 11.15

            A new applicant must, in a statement in the listing document made in compliance with the requirements of rules 14.19 to 14.21, clearly set out its business objectives and explain how it proposes to achieve them.

            Note: The new applicant's statement of business objectives is designed to indicate, in reasonable detail, the new applicant's potential, how this is likely to be realised over an identified time frame. Due regard should also be given to the disclosure requirements under Rule 18.08A when preparing the statement of business objectives.

        • Property-related matters (11.16-11.19)

          • 11.16

            Property interests of an applicant's property activities must have, in respect of a substantially major portion of its PRC properties, long-term title certificates and/or, in respect of a substantially major portion of its properties not situated in the PRC, other appropriate evidence of title, regardless of whether such properties are completed or still under development.

            Note: For the purposes of rules 11.16 to 11.19:—

            (1) a "property activity" has the same definition as defined in rule 8.01(2); and
            (2) the Exchange has a discretion to decide on whether or not any title certificate constitutes a "long term" title certificate.

          • 11.17

            For any new applicant, not being a property company as defined in rule 11.16, which has a PRC property that represents a substantial portion of its assets in terms of either asset value or profit contribution, the new applicant must obtain a long-term title certificate for that PRC property.

          • 11.18

            In the case of infrastructure companies:—

            (1) an issuer must obtain long-term title certificates for all PRC properties used in infrastructure projects, whether completed or under development; and
            (2) where such companies operate under long-term concessionary arrangements awarded by the government which arrangements do not provide for long-term title certificates to be granted, the Exchange may accept, for the purpose of the listing application, other evidence of the right to use the PRC property in question for the period during which the assets are expected to be operated, depending on the merits of each individual case.

          • 11.19

            For any new applicant not being a property company or an infrastructure company, where a PRC property is otherwise significant to the applicant's activities, the applicant will be expected to have the relevant long-term title certificate, unless otherwise permitted by the Exchange.

        • Other conditions relevant to new applicants (11.20-11.22A)

          • 11.20

            Subject to rules 11.21 and 11.21A, a new applicant must not:—
             
            (1)    have changed the period of its financial year during the latest complete financial year immediately preceding the issue of the listing document; or
             
            (2)    change the period of its financial year during the period of any profit forecast, if any, or the current financial year, whichever is the longer period.

          • 11.21

            Notwithstanding rule 11.20, a subsidiary of the new applicant will normally be permitted to change the period of its financial year provided that:—

            (1) the change is to make the subsidiary's financial year coterminous with that of the new applicant;
            (2) appropriate adjustments are made in the trading record and such adjustments are fully explained in statements which must be provided to the Exchange; and
            (3) adequate disclosure is provided in the listing document and the accountants' report of the reason for the change and the effect of the change on the new applicant's group trading record and profit forecast, if any.

          • 11.21A

            Notwithstanding rule 11.20, the Exchange may consider an application for a waiver from strict compliance with rule 11.20 if:—
             
            (1)    the new applicant is an investment holding company and the change is to allow its financial year to be coterminous with that of all or a majority of its major operating subsidiaries;
             
            (2)    the new applicant would be able to satisfy all requirements under rule 11.12A before and after the proposed change; and
             
            (3)    the proposed change will not materially affect the presentation of financial information, or result in any omission of material information in the listing document or information that would otherwise be relevant to assessment of the new applicant’s suitability.

          • 11.22 [Repealed]

            [Repealed 1 July 2008]

          • 11.22A

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

      • Conditions relevant to the securities for which listing is sought

        • 11.23

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

          (1) [Repealed 1 July 2008]
          (2) with regard to all equity securities for which a listing is sought, except those specified in sub-paragraphs (3) and (4):—
          (a) the market capitalisation of such equity securities (determined as at the time of listing) in the hands of the public must be at least HK$45,000,000; and
          (b) there must, as at the time of listing, be an adequate spread of holders of such securities. The number will depend on the size and nature of the issue but, as a guideline, the equity securities in the hands of the public should, as at the time of listing, be held among at least 100 persons (including those whose equity securities are held through CCASS);
          (3) with regard to options, warrants or similar rights to subscribe or purchase shares ("warrants") for which a listing is sought:—
          (a) in the case of a new applicant:—
          (i) the market capitalisation of such warrants (determined as at the time of listing) must be at least HK$6,000,000; and
          (ii) there must, as at the time of listing, be an adequate spread of holders of such warrants. The number will depend on the size and nature of the issue but, as a guideline, the warrants in the hands of the public should, as at the time of listing, be held among at least 100 persons (including those whose warrants are held through CCASS); and
          (b) in the case of a listed issuer:—
          (i) the market capitalisation of such warrants (determined as at the time of listing) must be at least HK$6,000,000; and
          (ii) save where: (a) such warrants are offered to existing holders of the issuer's shares by way of bonus issue; and (b) in the 5 years preceding the date of the announcement on the proposed bonus issue, there are no circumstances to indicate that the shares of the issuer may be concentrated in the hands of a few shareholders, there must, as at the time of listing be an adequate spread of holders of such warrants. The number will depend on the size and nature of the issue but, as a guideline, the warrants in the hands of the public should, as at the time of listing, be held among at least 100 persons (including those whose warrants are held through CCASS);
          (4) in the case of a listed issuer seeking the listing of further securities of a class al listed, neither of the restrictions set out in sub-paragraph (2) and (3) shall apply;
          (5) [Repealed 1 July 2008]
          (6) the expected total market capitalisation of a new applicant at the time of listing must be at least HK$150,000,000 which shall be calculated on the basis of all issued shares (including the class of securities for which listing is sought and such other class(es) of securities, if any, that are either unlisted or listed on other regulated market(s)) of the new applicant at the time of listing;
          (7) subject to rule 11.23(10) below, at least 25% of the issuer's total number of issued shares must at all times be held by the public;
          (8) not more than 50% of the securities in public hands at the time of listing can be beneficially owned by the three largest public shareholders, save where: (a) the securities to be listed are options, warrants or similar rights to subscribe or purchase shares; (b) such securities are offered to existing holders of a listed issuer's shares by way of bonus issue; and (c) in the 5 years preceding the date of the announcement on the proposed bonus issue, there are no circumstances to indicate that the shares of the issuer may be concentrated in the hands of a few shareholders;
          (9) where an issuer has one class of securities or more apart from the class of securities for which listing is sought, the total securities of the issuer held by the public (on all regulated market(s) including the Exchange) at the time of listing must be at least 25% of the issuer's total number of issued shares. However, the class of securities for which listing is sought must not be less than 15% of the issuer's total number of issued shares, having an expected market capitalisation at the time of listing of not less than HK$45,000,000;
          (10) the Exchange may, at its discretion, accept a lower percentage of between 15% and 25% in the case of issuers with an expected market capitalisation at the time of listing of over HK$10,000,000,000, where it is satisfied that the number of securities concerned and the extent of their distribution would enable the market to operate properly with a lower percentage, and on condition that the issuer will make appropriate disclosure of the lower prescribed percentage of public float in the initial listing document and confirm sufficiency of public float in successive annual reports after listing (see rule 17.38A) . Additionally, a sufficient portion (to be agreed in advance with the Exchange) of any securities intended to be marketed contemporaneously within and outside Hong Kong must normally be offered in Hong Kong; and
          (11) notwithstanding the requirement that the minimum prescribed percentage of securities must at all times remain in public hands, the Exchange may consider granting a temporary waiver to an issuer which is the subject of a general offer under the Takeovers Code (including a privatisation offer), for a reasonable period after the close of the general offer to restore the percentage. The issuer must restore the minimum percentage of securities in public hands immediately after the expiration of the waiver, if granted.

          Notes:
          1 [Repealed 1 July 2008]
          2 The Exchange will not regard at any time,
          (a) in relation to an issuer other than a PRC issuer, and other than any subsidiaries of a PRC issuer, a director, chief executive or substantial shareholder of such issuer or any of its subsidiaries or a close associate of any of them; or
          (b) in relation to a PRC issuer, a promoter, director, supervisor, chief executive or substantial shareholder of the PRC issuer or any of its subsidiaries or a close associate of any of them
          as a member of "the public" or shares held by any such person as being "in public hands".
          3 The Exchange will also not recognise as a member of "the public":—
          (a) any person whose acquisition of securities has been financed directly or indirectly by a person referred to in note 2 above; or
          (b) any person who is accustomed to taking instructions from a person referred to in note 2 above in relation to the acquisition, disposal, voting or other disposition of securities of the issuer registered in his name or otherwise held by him.
          4 [Repealed 1 July 2008]
          5 Issuers should note that the minimum prescribed percentage of securities must remain in public hands at all times. If the percentage falls below the minimum, the Exchange reserves the right to cancel the listing or suspend trading until appropriate steps have been taken to restore the minimum percentage of securities in public hands (see rule 17.36).
          6 Where the percentage has fallen below the minimum, the Exchange may refrain from suspension if the Exchange is satisfied that there remains an open market in the securities and either:
          (a) the shortfall in the prescribed percentage arose purely from an increased or newly acquired holding of the listed securities by a person who is, or after such acquisition becomes, a core connected person only because he is a substantial shareholder of the issuer and/or any of its subsidiaries. Such substantial shareholder must not be a controlling shareholder or single largest shareholder of the issuer. He must also be independent of the issuer, directors and any other substantial shareholders of the issuer and must not be a director of the issuer. If the substantial shareholder has any representative on the board of directors of the issuer, he must demonstrate that such representation is on a nonexecutive basis. In general, the Exchange would expect this to apply to holdings of the listed securities by institutional investors with a wide spread of investments other than in the listed securities concerned. Holdings of the listed securities by private equity or venture capital funds which have been involved in the management of the issuer before and/or after listing would not qualify. It is the responsibility of the issuer to provide sufficient information to the Exchange to demonstrate the independence of such substantial shareholder and to inform the Exchange of any change in circumstances which would affect his independence as soon as it becomes aware of such change; or
          (b) the issuer and the controlling shareholder(s) or single largest shareholder undertake to the Exchange to take appropriate steps to ensure restoration of the minimum percentage of securities to public hands within a specified period which is acceptable to the Exchange.
          7 At any time when the percentage of securities in public hands is less than the required minimum, and the Exchange has permitted trading in the securities to continue, the Exchange will monitor closely all trading in the securities to ensure that a false market does not develop and may suspend the securities if there is any unusual price movement.
          8 GEM listed issuers that have been allowed a lower minimum prescribed percentage of public float (including those which have been granted a waiver under repealed GEM Rule 11.23(5)) have a grace period of three years to comply with the public float requirement under rule 11.23. Accordingly, all GEM issuers must comply with the public float requirement by no later than 30 June 2011.

        • 11.24

          In the case of any listing application involving the issue of a listing document pursuant to which the issuer proposes to raise new capital in an amount not fully underwritten, the issuer must indicate the minimum amount proposed to be raised which, in the case of a new applicant, must (so far as practicable) be identified by reference to its statement of business objectives, and the listing shall be conditional on such amount being so raised.

          Note: Where the listing document refers to an amount proposed to be raised in excess of the minimum amount indicated, the listing document must explain the impact to the issuer and its statement of business objectives of raising such excess amount. In this regard, a statement that the excess will represent working capital shall not be adequate, unless a reasonably detailed explanation is given as to how such working capital is to be applied.

        • 11.25

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

        • 11.26

          The securities for which listing is sought must be freely transferable.

        • 11.27

          Neither partly-paid shares nor bearer shares will be admissible to listing on GEM.

        • 11.28

          Derivative warrants of the type referred to in the Main Board Listing Rules will not be admissible to listing on GEM.

        • 11.29

          (1) In the case of a new applicant or a listed issuer in respect of a class of securities new to listing, the securities for which listing is sought must be Eligible Securities from the date on which dealings in the securities are to commence.
          (2) The new applicant or the listed issuer must make all necessary arrangements to comply with sub-paragraph (1).
          (3) An issuer shall ensure, so far as it is able, that its listed securities remain Eligible Securities.

        • 11.30

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

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

        • 11.31

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

        • 11.32

          Securities to which options, warrants or similar rights to subscribe or purchase equity securities are attached must comply both with the requirements applicable to the securities for which listing is sought and with the requirements applicable to such options, warrants or similar rights (see Chapter 21).

      • Basis of allocation

        • 11.33

          A listing document must disclose full details of the basis on which the issuer proposes to allocate securities, including details of the respective securities in any public and placing tranches (if any). With regard to all securities offered for subscription or sale to the public whether by a new applicant or a listed issuer (excluding, for the avoidance of doubt, securities subject to placing arrangements), the issuer, its directors, Sponsor and underwriters (if applicable) must adopt a fair basis of allocating the same to all persons subscribing or applying for the securities.

          Note: See also rules 13.01 and 13.02.

      • Certainty of offer period in respect of any public offers

        • 11.34

          Any method of listing involving an offer to the public requires the issuer to set out details relating to the offer period in the listing document (see paragraph 15(3)(f) of Part A and paragraph 18(1) of Part B of Appendix 1).

          Note: The Exchange considers the details of an offer period to be a material term of the listing document which must be able to be relied upon by all investors and which should remain the same for all investors. Furthermore, in order to ensure that all investors are treated fairly and equally, and so that there is no confusion or uncertainty surrounding the offer period, the offer period set out in the listing document should not normally be revised or extended.

        • 11.35

          Any right to revise or extend the offer period or period during which the subscription list is open, as stipulated in the listing document, must:—

          (1) be limited to possible delays caused by a tropical cyclone warning signal or such similar extraneous factors affecting whether the stated closing date is a banking day or not, as are acceptable to the Exchange; and
          (2) be set out in the details included in the listing document; and

          subject to any such qualifications acceptable to the Exchange, the closing date of the offer period and the period during which the subscription list is open, as stated in the listing document, may not be revised or extended and may not be subject to any unilateral right on the part of the issuer, the underwriter or any other person to revise or extend such date or period.

      • Underwriters

        • 11.36

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

    • Chapter 12 Application Procedures and Requirements

      • Introduction

        • 12.01

          This Chapter sets out the procedures and requirements for applications for the listing of equity securities by new applicants and listed issuers. The procedures and requirements are applicable to both new applicants and listed issuers except where otherwise stated.

        • 12.02

          The Exchange may raise any enquiries or call for any information or documentation in connection with any listing application. Both the Sponsor and the issuer in question are required to respond in a prompt and efficient manner to all such enquiries raised and the issuer shall not (save, in the case of a new applicant, for the express purposes set out in rule 12.15) publish or issue any listing document (if any) until the Exchange confirms that it has no further comments thereon.

      • Enquiries prior to application

        • 12.03

          In the context of preparing the application for listing, if the issuer or its Sponsor has any queries on any aspect of the GEM Listing Rules, the Sponsor (or if the issuer is not required to have (or does not otherwise retain) a Sponsor, the issuer) should contact the Listing Division. The Exchange reserves the right to require that any query be submitted to it in writing, accompanied by such information or documentation as the Exchange deems appropriate or necessary.

        • 12.04

          Responses from the Exchange to any query made of it prior to consideration of any listing application shall not be binding on the Exchange and provide no assurance that the listing application will be approved.

      • Applications

        • General (12.05-12.11)

          • 12.05

            An application must be made to the Exchange for the purposes of listing securities issued by a new applicant and a listed issuer alike.

          • 12.06

            The Sponsor (or if the issuer is not required to have (or does not otherwise retain) a Sponsor, the issuer) is responsible for lodging the application for listing and all supporting documents and for dealing with the Exchange on all matters arising in connection with the application.

          • 12.07

            If the listing of a new applicant remains outstanding for more than 6 months after the date of the application form, a new application form together with a further listing fee in the prescribed amount must be submitted to the Exchange. Any initial listing fee paid will, in such circumstances, be forfeited.

          • 12.08

            If there is a termination or addition of a Sponsor during the vetting process of any listing document to be issued by a new applicant, the new applicant must submit a new listing application detailing a revised timetable and a further initial listing fee in the amount specified in Appendix 9. Any initial listing fee paid will, in such circumstances, be forfeited.
             
            Notes: 
             
            (1) [Repealed 1 October 2013]
             
              (2)    See also Chapter 4 for other circumstances when a new applicant may be required to submit a new listing application form.
             
              (3) Where there is a change in Sponsors, the replacement or remaining Sponsor, as the case may be, must submit to the Exchange why the outgoing Sponsor left; a copy of the clearance letter (if any) from the outgoing Sponsor; and any matters the replacement or remaining Sponsor considers necessary to be brought to the Exchange’s attention regarding the application and the outgoing Sponsor as soon as practicable.
             
              (4) Where an additional Sponsor is appointed, the new applicant and the Sponsors must submit to the Exchange reasons for appointing the additional Sponsor; and the additional Sponsor must submit to the Exchange a confirmation that it fully agrees with all submissions previously made by the new applicant and its existing Sponsor when a new listing application is submitted pursuant to rule 6A.02B(2).

          • 12.09

            (1)   An applicant must submit a listing application form, an Application Proof and all other relevant documents under rules 12.22 and 12.23, and the information in these documents must be substantially complete except in relation to information that by its nature can only be finalised and incorporated at a later date.
             
            (2)   If the Exchange decides this information is not substantially complete, the Exchange will not continue to review any documents relating to the application. All documents, including the Form 5A (except for the retention of a copy of these documents for the Exchange's record) submitted to the Exchange will be returned to the Sponsor. The initial listing fee will be dealt with in the manner described in the note to rule 12.14(4) below.
             
            (3)   For applications which were previously returned by the Exchange, the applicant can only submit a new Form 5A together with a new Application Proof not less than 8 weeks after the Return Decision.
             
            Notes: (1)-(3) [Repealed 1 October 2013]
             
            (4)   The Exchange may require a new applicant to delay the provisional hearing date (see rule 12.12) if, during the review process, the Exchange believes the following cannot be fulfilled by the new applicant at least 4 clear business days before the provisional hearing date:—
             
            (a)   the submission of the revised proof of the listing document containing sufficient and appropriate disclosure of all information required under the GEM Listing Rules;
             
            (b)   the submission of any outstanding documents as requested by the Exchange; and
             
            (c)   the Exchange's queries and comments being satisfactorily addressed in a timely fashion.
             
            (5)   During the review process, the Sponsor should not revise the contents of the listing document on a piece-meal basis. A revised proof of the listing document must completely address all the Exchange's comments on the previous proof. The Exchange may elect not to review a revised proof that fails to meet this requirement.
             
            (6)   Where the GEM Listing Committee is considering an application for listing from a new applicant, the Listing Division will normally invite the new applicant and its directors to make itself available to attend the GEM Listing Committee hearing. The new applicant, including its directors and its Sponsor shall be prepared to answer questions raised by the GEM Listing Committee, but they will normally only be invited into the GEM Listing Committee hearing if the GEM Listing Committee wishes to directly question the new applicant. If the new applicant is invited to make itself available to attend, the new applicant may be accompanied by its directors, Sponsor and/or proposed authorised representatives.
             

          • 12.10

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

            (1)   publicity material does not relate to an issue of securities if its purpose is the promotion of the issuer or its products or business and not the promotion of the securities to be issued;
             
            (2)   the following documents do not fall within the scope of this rule and need not be submitted for prior review:
             
            (a)   an Application Proof published on the GEM website under rule 16.01A;
             
            (b)   a Post Hearing Information Pack published on the GEM website under rule 16.01B;
             
            (c)   any statement by a new applicant published on the GEM website stating that no reliance should be placed on any media reports about the new applicant subsequent to the publication of its Application Proof or the Post Hearing Information Pack, as the case may be; and
             
            (d)   the invitation or offering document (or its equivalent) and document that consist of, or are drafts of, or relate to, agreements to be entered into in connection with the issue of the securities. This is provided that any obligations created by these agreements to issue, subscribe, purchase or underwrite the securities are conditional on listing being granted;
             
            (3)   any publicity material or announcement referring to a proposed listing by a new applicant issued before the GEM Listing Committee’s hearing of the new applicant's application for listing must state that an application has been or will be made to the Exchange for listing of and permission to deal in the securities concerned; and
             
            (4)   where any material relating to a proposed listing by a new applicant is released without the Exchange's prior review before the hearing, the Exchange may postpone the hearing by up to 1 month. If this results in the application form being more than 6 months out of date, the applicant will have to submit a new application form and a further listing fee (see rule 12.07).
             

          • 12.11

            From the time of submission of the application for listing until listing is granted, there must be no dealing in the securities for which listing is sought by any core connected person of the issuer, except as permitted by rule 10.16. The directors of the issuer shall forthwith notify the Exchange of any such dealing or suspected dealing of which they become aware. If any of the directors or their close associates are found to have engaged in such dealing, the application may be rejected.

        • Applications by new applicants (12.12-12.15)

          • 12.12

            The listing application form must contain a draft timetable which is subject to agreement with the Exchange. The Sponsor must contact the Listing Division to ascertain a date ("the provisional hearing date") on which the GEM Listing Committee may consider the new applicant's application for listing. The Exchange reserves the right to change the provisional hearing date.

          • 12.13

            A new applicant must apply for a listing on the prescribed form set out in Appendix 5A.

          • 12.14

            The listing application form must be accompanied by:—
             
            (1)    the documents, as applicable, stipulated in rules 12.22 and 12.23;
             
            (2) [Repealed 1 January 2005]
             
            (3) [Repealed 1 October 2013]
             
            (4) the initial listing fee in the amount specified in Appendix 9.
             
            Notes:  (1)    If the Exchange returns an application to a Sponsor before the Exchange issues its first comment letter to the Sponsor, the initial listing fee will be refunded; and in other cases the initial listing fee will be forfeited.
             
              (2)    For applications re-submitted at any time after the lapse of a previous application, the new applicant and its Sponsor must provide, if applicable, a submission with supporting documents addressing all outstanding matters set out in the Exchange’s letter on the lapsed application and material changes in the listing application, business or circumstances of the new applicant.
             
              (3)    For applications re-submitted within three months of a lapsed application by at least one of the original and independent Sponsors of the lapsed application (see notes 3 and 4 to rule 12.08), all documents lodged with the Exchange in relation to the previous application will remain valid and applicable. The new applicant and its Sponsor will only need to submit documents that have been revised due to material changes, and provide a confirmation to the Exchange that there has been no material changes to all other documents.
             

          • 12.15

            A new applicant may not publish or issue any listing document until the Exchange has confirmed that it has no further comments thereon. However, the new applicant is permitted to circulate a draft or preliminary listing document, which is clearly marked as such and which states that it is subject to final review by the Exchange, for the purposes of arranging underwriting.

        • Applications by listed issuers (12.16-12.17)

          • 12.16

            A listed issuer must apply to the Listing Division for the listing of additional equity securities. The application must be on the prescribed form set out in Appendix 5B. In circumstances where the application is required to be supported by a listing document the application must be submitted at least 10 clear business days prior to the date on which the issuer proposes to bulk print the listing document and in circumstances where the application is not required to be supported by a listing document, the application must be submitted at least 4 clear business days prior to the proposed date for issuing the securities. In all cases, the Exchange may require a longer time period to consider the listing application.

          • 12.17

            The listing application form must be accompanied by:—

            (1) the documents, as applicable, stipulated in rule 12.26B;
            (2) in circumstances where the listed issuer is required to have (or otherwise retains) a Compliance Adviser (or other adviser appointed pursuant to rule 6A.37), the adviser's declaration of interests in the form set out in Appendix 7H; and
            (3) the subsequent issue fee in the amount specified in Appendix 9.

        • Further provisions applicable to applications by new applicants and listed issuers (12.18-12.21)

          • 12.18

            Where any document that has been submitted is amended after submission, a like number of further copies of that document marked up to show all changes must be submitted to the Listing Division for review at the earliest opportunity. In the case of a new applicant, the final form, or as appropriate signed original, of any document must be lodged with the Exchange at least 4 clear business days prior to the provisional hearing date. No material amendment to the final proof listing document will be allowed without the consent of the Exchange.

          • 12.19

            Issuers are reminded that the above requirements are not exhaustive and that a new applicant or listed issuer must also supply any further documents and information which the Exchange may require in a particular case.

          • 12.20 [Repealed]

            [Repealed 1 July 2008]

          • 12.21

            The Exchange retains a discretion to reject any application. In such circumstances, the Exchange shall give written notice of the rejection and the reasons therefor.

      • Documentary requirements — New Listing Applications

        • At the time of application for listing (12.22-12.23)

          • 12.22

            The following documents, as applicable, must be lodged with the Exchange for review together with the application for listing form in respect of a new applicant:—
             
            (1) such number of copies of an Application Proof as required by the Exchange and 2 CD-ROMs containing the Application Proof and other documents as the Exchange may require;
             
            (2) a confirmation from the new applicant's legal advisers that the new applicant's articles of association conform with the relevant parts of Appendices 3 and 11, and on the whole, are not inconsistent with the GEM Listing Rules and the laws of the place where the new applicant is incorporated or otherwise established;
             
            (3) where the Application Proof contains an accountants' report, an advanced draft of any statement of adjustments relating to the accountants' report;
             
            (3a) a written confirmation to the new applicant from the reporting accountants that no significant adjustment is expected to be made to the draft accountants’ reports on (1) historical financial information; (2) pro forma financial information; and (3) profit forecast (if any) included in the Application Proof based on the work done as of the date of the confirmation;
             
            (3b) a written confirmation to the new applicant from each of the experts who is named as an expert in the listing document (excluding reporting accountants) that no material change is expected to be made to the relevant expert opinion included in the Application Proof based on the work done as of the date of the confirmation;
             
              Note: Where the relevant information in the listing document is updated, the reporting accountants and each of the experts, where applicable, must provide a written confirmation on the updated information similar to those in sub-paragraphs (3a) and (3b).
             
            (4) [Repealed 1 October 2013]
             
            (5) a final proof of the formal notice, where applicable;
             
            (6) a final proof of any application form (including any excess or preferential application form) to subscribe or purchase the securities for which listing is sought;
             
            (7-12) [Repealed 1 October 2013]
             
            (13) where the Application Proof is required to contain a statement by the directors as to the sufficiency of working capital, an advanced draft of a letter from its Sponsor, confirming that it is satisfied that the sufficiency of working capital statement in the Application Proof has been made by the directors after due and careful enquiry;
             
            (14a) where the Application Proof contains a profit forecast (see rules 14.28 to 14.31), a final or an advanced draft of the board's profit forecast memorandum covering the same period of the profit forecast contained in the Application Proof and cash flow forecast memorandum covering at least 12 months from the expected date of publication of the listing document with principal assumptions, accounting policies and calculations for the forecasts;
             
            (14b)   where the Application Proof does not contain a profit forecast, a final or an advanced draft of the board's profit forecast memorandum covering the period up to the forthcoming financial year end date after the date of listing and cash flow forecast memorandum covering at least 12 months from the expected date of publication of the listing document with principal assumptions, accounting policies and calculations for the forecasts; and
             
            (15) a final or an advanced draft of any application for a waiver of any provision of the GEM Listing Rules and the provisions of the Companies (Winding Up and Miscellaneous Provisions) Ordinance from the Sponsor and the directors/proposed directors.
             
              Note: Unless previously provided, all executed requests for waivers must be submitted at least four clear business days before the expected hearing date.
             

          • 12.23

            In addition to the documents required under rule 12.22, a new applicant must lodge the following documents with the Exchange at the time of submitting the application for listing:—

            (1) [Repealed 1 October 2013]
            (2) in respect of each Sponsor to the application for listing, an undertaking and statement of independence under rule 6A.03 in the form in Appendix 7K duly signed on the Sponsor's behalf, and an undertaking and a declaration of interest under rules 6A.21 and 6A.31 in the forms in Appendix 7M and Appendix 7H, both duly signed on the compliance adviser's behalf;
            (2a) a written confirmation signed by each director/supervisor that the information in the Application Proof is accurate and complete in all material respects and is not misleading or deceptive;
            (2b) a written confirmation and undertaking signed by each director/supervisor and proposed director/supervisor to the following effect:
            (i) that the Application Proof referred to in rule 12.22(1) above contains all information about the biographical details of such director/supervisor or proposed director/supervisor as set out in rule 17.50(2) and that those details are true, accurate and complete;
            (ii) where, before dealings commence, there are any changes in the biographical details as set out in rule 12.23(2b)(i) above, to inform the Exchange as soon as practicable of such changes; and
            (iii) to lodge with the Exchange in accordance with rule 12.26(9) a declaration, undertaking and acknowledgement, in the relevant form in Appendix 6, duly signed by each director/supervisor and proposed director/supervisor and the contact information as described in rule 5.13A(1) (in the manner prescribed by the Exchange from time to time).
            If a director/supervisor is appointed after the submission of the listing application form, then the director/supervisor must submit a duly signed written confirmation and undertaking referred to in this sub-rule as soon as he is appointed. The reference to the Application Proof referred to in rule 12.22(1) above in the confirmation and undertaking shall be read as a reference to the relevant draft listing document that contains the biographical details of such director/supervisor;
            (3) a certified copy of the new applicant's certificate of incorporation or equivalent document; and
            (4)-(5) [Repealed 1 October 2013]
            (6) any document as may be required by the Exchange in support of the application for listing.
            (a)-(c) [Repealed 1 October 2013]

        • Before bulk-printing of the listing document (12.23A)

          • 12.23A

            The following must be lodged with the Exchange by a new applicant before bulk-printing of the listing document:—

            (1) where the listing document is required to contain a sufficiency of working capital statement by the directors, a final letter from its Sponsor, confirming that it is satisfied that the statement in the listing document as to the sufficiency of working capital has been made by the directors after due and careful enquiry and that persons or institutions providing finance have stated in writing that such facilities exist; and
            (2) a final copy of all draft documents which have been submitted to the Exchange in support of the application for listing.

        • After notification of approval in principle but before the date of issue of the listing document (12.24-12.25)

          • 12.24

            The following must be lodged with the Exchange by a new applicant as soon as practicable after the hearing of the application by the GEM Listing Committee but on or before the date of issue of the listing document:—

            (1)   the signed Sponsor's declaration in Appendix 7G required by rule 6A.13;
             
            (2)   a copy of each of the English and the Chinese language version of the listing document dated and signed by every person who is named therein as a director or proposed director of the new applicant or by his agent authorised in writing and by the secretary and the relevant application form (including any excess or preferential application form) to subscribe or purchase the securities for which the listing is sought;
             
            (3)   where any document or application form referred to in (2) above is signed by an agent, a certified copy of the authorisation or the power of attorney for such signature;
             
            (4)   a copy of the formal notice, where applicable
             
            (5)   –(7) [Repealed 1 October 2013]
             
            (8)   a copy of the written notification issued by HKSCC stating the securities will be Eligible Securities; and
             
            (9)   any written undertakings and confirmations from the new applicant, its shareholders and/or other relevant parties to the Exchange referred to in the listing document.
             
            (10)   –(11) [Repealed 1 October 2013]
             

          • 12.25

            In the case of a listing document which constitutes a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance, the following documents must be lodged with the Exchange by 11 a.m. on the intended date of authorisation of the prospectus:—

            (1) an application for authorisation for registration of the prospectus under section 38D(3) or section 342C(3) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (as the case may be);
            (2) 2 printed copies of the prospectus, duly signed in accordance with section 38D(3) or section 342C(3) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (as the case may be) and having endorsed on or attached to the documents stipulated by the relevant section; and
            (3) in respect of a Chinese translation of the prospectus, a certificate issued by the translator certifying that the Chinese translation of the English version of the prospectus is true and accurate or in respect of an English translation of the prospectus, a certificate issued by the translator certifying that the English translation of the Chinese version of the prospectus is true and accurate; and in either case, a certificate issued by a competent officer of the Sponsor certifying that the translator is competent to give translations on the prospectus documents.
            (4) [Repealed 1 October 2013]

        • After the date of issue of the listing document but before dealings commence (12.26)

          • 12.26

            As soon as practicable after the issue of the listing document but before dealings commence, the following documents must be lodged with the Exchange in respect of a new applicant as a condition for granting listing approval:—

            (1) [Repealed 1 October 2013]
            (1a) a certified copy of the resolution(s) of the new applicant in general meeting (if any) authorising the issue of all securities for which listing is sought;
            (1b) a certified copy of the resolution(s) of the board of directors or other governing body or any other person to whom it has properly delegated these powers (together, in such cases, with a certified copy of the power of attorney or resolution delegating the powers) authorising the issue and allotment of such securities, the making of the application for listing in Form 5A and, the making of all necessary arrangements enabling such securities to be admitted into CCASS, and approving and authorising the issue of the listing document;
            (2) the completed company information sheet in Appendix 5F, submitted in the electronic format specified by the Exchange from time to time, for publication on the GEM website, together with a hard copy duly signed by or on behalf of each of the directors of the new applicant;
            (3) [Repealed 25 June 2007]
            (4) [Repealed 25 June 2007]
            (5) [Repealed 25 June 2007]
            (6) in the case of a placing of securities by a new applicant:—
            (a) a copy of the placing letter and separate marketing statements in Appendix 5D signed by each of: (i) the lead broker; (ii) any distributors; and (iii) any Exchange Participant referred to in that Appendix; and
            (b) a list from each placing broker setting out the names, addresses and identity card or passport numbers (where individuals) and the names, addresses and business registration numbers (where companies) of all its placees, the names and addresses of the beneficial owners of the securities (in the case of nominee companies) and the amounts taken up by each of its placees;
            (7) a declaration substantially as in Appendix 5E, duly signed by a director and the secretary of the new applicant together with any fee which is payable and which has not previously been paid (see Appendix 9);
            (8) a declaration substantially as in Appendix 7I duly signed by the Sponsor; and
            (9) a written declaration, undertaking and acknowledgement, in the relevant form in Appendix 6, duly signed by each director/supervisor and proposed director/supervisor and the contact information as described in rule 5.13A(1) (in the manner prescribed by the Exchange from time to time).

      • Documentary Requirements — Applications by Listed Issuers

        • 12.26A

          Rules 12.26B to 12.27 set out the documentary requirements for applications for the listing of equity securities by listed issuers.

        • At the time of application for listing (12.26B)

          • 12.26B

            The following documents, as applicable, must be lodged with the Exchange together with the listing application in accordance with rule 12.16:—

            (1) such number of copies of drafts or proofs of the listing document as the Exchange may require, marked in the margin to indicate where the relevant provisions of the GEM Listing Rules and/or the Companies (Winding Up and Miscellaneous Provisions) Ordinance have been met;
            (2) if the listing document contains an accountants' report, a draft of any statement of adjustments relating to the accountants' report;
            (3) if the listing document contains a profit forecast (see rules 14.28 to 14.31), a draft of the board's profit forecast memorandum with principal assumptions, accounting policies and calculations for the forecast; and
            (4) for issue of new warrants to existing warrant holders, a legal opinion, from a lawyer of the relevant jurisdiction, confirming that the warrant proposal complies with the relevant provisions of the issuer's constitutive documents and the terms of the existing warrant instrument (see rule 21.07(7)).

        • Before bulk-printing of the listing document (12.26C)

          • 12.26C

            If the listing document contains a statement as to the sufficiency of working capital, a letter from the issuer's financial advisers or auditors must be submitted to the Exchange before bulk-printing of the listing document, confirming that:

            (1) the statement has been made by the directors after due and careful enquiry; and
            (2) persons or institutions providing finance have stated in writing that such facilities exist.

        • On or before the date of issue of the listing document (12.26D)

          • 12.26D

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

            (1) every written undertakings from the listed issuer, its shareholders and/or other relevant parties to the Exchange referred to in the listing document; and
            (2) [Repealed 1 March 2019]
            (3) if the listed issuer proposes to issue a listing document of the type referred to in rule 6A.36 within the minimum period referred to in rule 6A.19 or any period fixed for the purposes of rule 6A.20, the signed declaration in the form set out in Appendix 7J as referred to in rule 6A.35.

        • In case of a listing document constituting a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (12.26E)

          • 12.26E

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

            (1) at least 10 business days before the proposed date of registration of the prospectus by the Registrar of Companies, notice of the proposed date of registration of the prospectus (see rule 15.09);
            (2) by 11 a.m. on the intended date of authorisation for registration of the prospectus,
            (a) an application for authorisation for registration of the prospectus under section 38D(3) or section 342C(3) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (as the case may be);
            (b) two printed copies of the prospectus, duly signed in accordance with section 38D(3) or section 342C(3) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (as the case may be) and having endorsed thereon or annexed thereto the documents required under the relevant section;
            (c) in respect of a Chinese translation of the prospectus, a certificate issued by the translator certifying that the Chinese translation of the English version of the prospectus is true and accurate or in respect of an English translation of the prospectus, a certificate issued by the translator certifying that the English translation of the Chinese version of the prospectus is true and accurate; and in either case, a certificate issued by the issuer certifying that the translator is competent to have given the certificate as to translations in respect of the prospectus documents; and
            (d) any power of attorney or other authority under which the prospectus is signed, together with a certified copy thereof.
            (3) [Repealed 1 March 2019]

        • Before dealings commence (12.27)

          • 12.27

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

            (1) [Repealed 25 June 2007]
            (2) [Repealed 2 November 2009]
            (3) [Repealed 1 March 2019]
            (4) [Repealed 1 March 2019]
            (5) [Repealed 1 March 2019]
            (6) in the case of the placing by a listed issuer of a class of securities new to listing:
            (a) a copy of the placing letter and separate marketing statements in the form set out in Appendix 5D signed by each of: (i) the lead broker; (ii) any distributors; and (iii) any Exchange Participant referred to in that Appendix; and
            (b) a list from each placing broker setting out the names, addresses and identity card or passport numbers (in the case of individuals) and the names, addresses and registration numbers (in the case of companies) of all its placees, the names and addresses of the beneficial owners (in the case of nominee companies) and the amounts taken up by each of its placees. Such lists may be supplied directly to the Exchange by each placing broker in order to maintain confidentiality.
            In the case of the placing by a listed issuer of a class of securities al listed, the Exchange may require the issuer to submit information on the placees for the purpose of establishing their independence (see also rule 17.30(7));
            (7) if required, a declaration from the security printers responsible for production of bearer documents of title in accordance with paragraph 24 of Part B of Appendix 2;
            (8) any fee which is payable and which has not previously been paid (see Appendix 9); and
            (9) the completed company information sheet, in the prescribed form set out in Appendix 5F, submitted in the electronic format specified by the Exchange from time to time, for publication on the GEM website.

    • Chapter 13 Restrictions on Purchase, Disposal and Subscription

      • Restrictions on preferential treatment

        • 13.01

          With regard to all securities offered for subscription or sale to the public whether by a new applicant or a listed issuer, no preferential terms or treatment may be afforded to any person subscribing or applying for the securities, whether as to price, the basis of allocation of securities or otherwise.

        • 13.02

          (1) Directors of the issuer and their close associates, and a person who is an existing shareholder of the issuer, may only subscribe for or purchase any securities for which listing is sought which are being marketed by or on behalf of a new applicant, whether in their own names or through nominees, if the following conditions are met:—
          (a) that no securities are offered to them on a preferential basis and no preferential treatment is given to them in the allocation of the securities; and
          (b) that the minimum prescribed percentages of public shareholders required by rules 11.23(7) and 11.23(9) are achieved.
          (2) Normally no more than 10% of any securities being marketed for which listing is sought may be offered to employees or past employees of the new applicant or its subsidiaries or associated companies and their respective dependents or any trust, provident fund or pension scheme for the benefit of such persons on a preferential basis. Other than the allocation of securities, no preferential terms or treatment as to price or otherwise may be afforded to such employees. Adequate disclosure in the listing document must be made of any arrangement to place shares to such employees (without any need to identify individuals), and the number and/or proportion of shares to be so placed. Any preferential treatment must be approved by the Exchange prior to the marketing and the new applicant concerned may be called upon to supply particulars of such employees, past-employees and their respective dependants and the objects, beneficiaries or members of any trust, provident fund or pension scheme as well as the results of subscription by employees, past-employees, their respective dependants and any trust, provident fund or pension scheme for the benefit of such persons. The new applicant must maintain records of such particulars for a period of not less than 12 months from the date of approval and make the same available for inspection by the Exchange during such period.

      • Restrictions and notification requirements on issuers purchasing their own shares on a stock exchange

        • General (13.03-13.06)

          • 13.03

            Subject to the provisions of the Code on Share Buy-backs, an issuer may purchase shares on GEM or on another stock exchange recognised for this purpose by the Commission and the Exchange. All such purchases must be made in accordance with the provisions of rules 13.04 to 13.14. The Code on Share Buy-backs must be complied with by an issuer and its directors and any breach thereof by an issuer will be a deemed breach of the issuer's undertaking to comply with its continuing obligations under the GEM Listing Rules and the Exchange may in its absolute discretion take such action to penalise any breach of this rule as it shall think appropriate. It is for the issuer to satisfy itself that a proposed purchase of shares does not contravene the Code on Share Buy-backs.

          • 13.04

            The Exchange reserves the right to prohibit an issuer from making purchases of shares on GEM if the Exchange considers that the issuer has committed a breach of any of the GEM Listing Rules which apply to that issuer. In the event that the Exchange does so prohibit such purchases no Exchange Participant will carry out any such purchases on behalf of the issuer until such prohibition is lifted.

          • 13.05

            The Sponsor and/or the authorised representatives of the issuer shall respond promptly to any request for information that the Exchange may address to the issuer concerning the purchase of shares, at any time.

          • 13.06

            For the purposes of rules 13.03 to 13.14 "shares" shall mean shares of all classes and securities which carry a right to subscribe or purchase shares, of the issuer provided that the Exchange may waive the requirements of those rules in respect of any fixed participation shares which are, in the opinion of the Exchange, more analogous to debt securities than equity securities. References to purchases of shares include purchases by agents or nominees on behalf of the issuer or subsidiary of the issuer, as the case may be.

        • Procedures to be complied with (13.07-13.10)

          • 13.07

            An issuer may only purchase shares on GEM, either directly or indirectly, if:—

            (1) the shares proposed to be purchased by the issuer are fully-paid up;
            (2) the issuer has previously sent to its shareholders an Explanatory Statement complying with the provisions of rule 13.08; and
            (3) its shareholders have given a specific approval or a general mandate to its directors to make the purchase(s), by way of an ordinary resolution which complies with rule 13.09 and which has been passed at a general meeting of the issuer duly convened and held;

          • 13.08

            The issuer must send to its shareholders an Explanatory Statement (at the same time as the notice of the relevant shareholders' meeting) containing all the information reasonably necessary to enable those shareholders to make an informed decision on whether to vote for or against the ordinary resolution to approve the purchase by the issuer of shares including the information set out below:—

            (1) a statement of the total number and description of the shares which the issuer proposes to purchase;
            (2) a statement by the directors of the reasons for the proposed purchase of shares;
            (3) a statement by the directors as to the proposed source of funds for making the proposed purchase, which shall be funds legally available for such purposes in accordance with the issuer's constitutive documents and the laws of the jurisdiction in which the issuer is incorporated or otherwise established;
            (4) a statement as to any material adverse impact on the working capital or gearing position of the issuer (as compared with the position disclosed in its most recent published audited accounts) in the event that the proposed purchases were to be carried out in full at any time during the proposed purchase period, or an appropriate negative statement;
            (5) a statement of the name of any directors, and to the best of the knowledge of the directors having made all reasonable enquiries, any close associates of the directors, who have a present intention, in the event that the proposal is approved by shareholders, to sell shares to the issuer, or an appropriate negative statement;
            (6) a statement that the directors have undertaken to the Exchange to exercise the power of the issuer to make purchases pursuant to the proposed resolution in accordance with the GEM Listing Rules and the laws of the jurisdiction in which the issuer is incorporated or otherwise established;
            (7) a statement as to the consequences of any purchases which will arise under the Takeovers Code of which the directors are aware, if any;
            (8) a statement giving details of any purchases by the issuer of shares made in the previous 6 months (whether on GEM or otherwise), giving the date of each purchase and the purchase price per share or the highest and lowest prices paid for such purchases, where relevant;
            (9) a statement as to whether or not any core connected persons of the issuer have notified the issuer that they have a present intention to sell shares to the issuer or have undertaken not to sell any of the shares held by them to the issuer, in the event that the issuer is authorised to make purchases of shares;
            (10) a statement giving the highest and lowest prices at which the relevant shares have traded on GEM during each of the previous twelve months; and
            (11) a prominent and legible disclaimer on the front cover of the circular in the form set out in rule 2.19.

            Notes:
            1 The Explanatory Statement need not contain the statement set out in rule 2.20 concerning the characteristics of GEM nor information on the interests (if any) of the Compliance Adviser (as referred to in rule 6A.31) and all directors, controlling shareholders and their respective close associates (as referred to in rule 11.04).
            2 At the same time as the Explanatory Statement is sent to shareholders of the issuer, the issuer should submit to the Exchange (a) a confirmation from the issuer that the Explanatory Statement contains the information required under rule 13.08 and that neither the Explanatory Statement nor the proposed share repurchase has unusual features; and (b) the undertaking from its directors to the Exchange according to rule 13.08(6).

          • 13.09

            The ordinary resolution proposed to shareholders to give the directors of the issuer a specific approval or general mandate to purchase shares must include the following:—

            (1) the total number and description of the shares which the issuer is authorised to purchase, provided that the number of shares which the issuer is authorised to purchase on GEM or on another stock exchange recognised for this purpose by the Commission and the Exchange under the Code on Share Buy-backs, may not exceed 10 per cent of the number of issued shares of the issuer and the total number of warrants to subscribe for or purchase shares (or other relevant class of securities) authorised to be so purchased may not exceed 10 per cent of the warrants of the issuer (or such other relevant class of securities, as the case may be), in each case as at the date of the resolution granting the general mandate; and

            Note: If the issuer conducts a share consolidation or subdivision after the repurchase mandate has been approved in general meeting, the maximum number of shares that may be repurchased under the mandate as a percentage of the total number of issued shares at the date immediately before and after such consolidation or subdivision shall be the same.
            (2) the dates on which the authority conferred by the resolution will commence and determine. Such authority may only continue in force until:—
            (a) the conclusion of the first annual general meeting of the issuer following the passing of the resolution at which time it shall lapse unless, by ordinary resolution passed at that meeting, the authority is renewed, either unconditionally or subject to conditions; or
            (b) revoked or varied by ordinary resolution of the shareholders in general meeting,
            whichever occurs first.

          • 13.10

            The issuer must report the outcome of the general meeting called to consider the proposed purchases to the Exchange immediately following the meeting.

        • Dealing restrictions (13.11)

          • 13.11

            The following dealing restrictions must be adhered to:—

            (1) an issuer shall not purchase shares on GEM for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Exchange from time to time;
            (2) an issuer shall not knowingly purchase shares from a core connected person and a core connected person shall not knowingly sell his shares to the issuer, on GEM;
            (3) an issuer shall procure that any broker appointed by the issuer to effect the purchase of shares shall disclose to the Exchange such information with respect to purchases made on behalf of the issuer as the Exchange may request;
            (4) an issuer shall not purchase its shares on GEM at any time after inside information has come to its knowledge until the information is made publicly available. In particular, during the period of 1 month immediately preceding the earlier of:
            (i) the date of the board meeting (as such date is first notified to the Exchange in accordance with rule 17.48) for the approval of the issuer's results for any year, half-year or quarter-year period or any other interim period (whether or not required under the GEM Listing Rules); and
            (ii) the deadline for the issuer to announce its results for any year, half-year or quarter-year period under rules 18.49, 18.78 or 18.79 or any other interim period (whether or not required under the GEM Listing Rules),
            and ending on the date of the results announcement, the issuer may not purchase its shares on GEM, unless the circumstances are exceptional;
            (5) an issuer shall not purchase its shares on GEM if that purchase would result in the number of listed securities which are in the hands of the public falling below the relevant minimum prescribed percentage for that issuer (as determined by the Exchange at the time of listing under rule 11.23);
            (6) an issuer shall not purchase its shares on GEM if the purchase price is higher by 5% or more than the average closing market price for the 5 preceding trading days on which its shares were traded on GEM; and
            (7) the Exchange may waive all or part of the above restrictions if, in the opinion of the Exchange, there are exceptional circumstances (such as, but without limitation, political or economic events having a material adverse effect on the price of shares of the issuer or issuers listed on GEM generally) justifying the waiver of such restrictions. A waiver may be granted either with respect to a fixed amount of securities of an issuer or generally or on such conditions as the Exchange shall specify and may be expressed to continue for a stated period of time or until further notice.

        • Subsequent issues (13.12)

          • 13.12

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

        • Reporting requirements (13.13)

          • 13.13

            An issuer shall:—

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

        • Status of purchased shares (13.14)

          • 13.14

            The listing of all shares which are purchased by an issuer (whether on GEM or otherwise) shall, subject to applicable law, be automatically cancelled upon purchase and the issuer must apply for listing of any further issues of that type of shares in the normal way. The issuer shall ensure that the documents of title of purchased shares are cancelled and destroyed as soon as reasonably practicable following settlement of any such purchase.

            Note: Overseas issuers with a dual listing are referred to rule 24.07 which may be relevant in this regard.

      • Restrictions on disposal of shares following the listing of a new applicant

        • 13.15

          For the purposes of rules 13.15 to 13.20, the following terms have the following meanings:— 

          (1) [Repealed 1 July 2008]
          (2) [Repealed 1 July 2008]
          (3) "listing date" means the date on which securities of the new applicant commence trading on GEM;
          (4) [Repealed 1 July 2008]
          (5) references to a "disposal" (of securities) includes the creation of any option, rights or interests (over such securities) but shall exclude the following:
          (a) any stock lending arrangement with an underwriter of the initial public offering of the new applicant's securities which satisfies the following conditions:
          (i) the stock lending arrangement is fully described in the initial listing document and must be for the sole purpose of covering any short position prior to the exercise of the underwriter's over-allotment option or similar right;
          (ii) the maximum number of shares to be borrowed from the relevant shareholder is the maximum number of shares that may be issued upon full exercise of the over-allotment option; and
          (iii) the same number of shares borrowed is returned to the relevant shareholder within 3 business days after the last day on which the over-allotment option may be exercised or, if earlier, the date on which the over-allotment option is exercised in full; and
          (b) any placing and issue of securities made in the manner described in rule 20.90(4) during the second six month period of the issuer's listing date where:
          (i) there is no change in the number of securities held by the relevant shareholder before and after completion of the placing and issue of securities; and
          (ii) the placing of securities does not result in a controlling shareholder of the issuer ceasing to be a controlling shareholder after completion of the placing and issue of securities.

        • 13.16 [Repealed]

          [Repealed 1 July 2008]

        • 13.16A

          (1) A person or group of persons shown by the listing document issued at the time of the issuer's application for listing to be controlling shareholders of the issuer shall not and shall procure that the relevant registered holder(s) shall not:—
          (a) in the period commencing on the date by reference to which disclosure of the shareholding of the controlling shareholders is made in the listing document and ending on the date which is 12 months from the date on which dealings in the securities of a new applicant commence on the Exchange, dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights, interests or encumbrances in respect of, any of those securities of the issuer in respect of which he is or they are shown by that listing document to be the beneficial owner(s); or
          (b) in the period of 12 months commencing on the date on which the period referred to in rule 13.16A(1)(a) expires, dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights, interests or encumbrances in respect of, any of the securities referred to in rule 13.16A(1)(a) if, immediately following such disposal or upon the exercise or enforcement of such options, rights, interests or encumbrances, that person or group of persons would cease to be a controlling shareholder.
          Any offer for sale contained in a listing document shall not be subject to such restrictions.
          (2) For the purpose of this rule, a person is treated as the beneficial owner of securities if he has the ultimate beneficial ownership or control of the securities, whether through a chain of companies or otherwise.

          Note: Controlling shareholder(s) is/are free to purchase additional securities and dispose of securities thus purchased in the relevant period, subject to compliance with the requirements of rule 11.23 to maintain an open market in the securities and a sufficient public float.

        • 13.17 [Repealed]

          [Repealed 1 July 2008]

        • 13.18

          Nothing in rule 13.16A shall prevent the disposal of any interest of a controlling shareholder in the securities referred to in Rule 13.16A(1)(a) in the following circumstances:—

          (1) pursuant to a pledge or charge in favour of an authorised institution (as defined in the Banking Ordinance), as security for a bona fide commercial loan;
          (2) pursuant to a power of sale under the pledge or charge (granted pursuant to sub-paragraph (1));
          (3) on the death of the controlling shareholder; or
          (4) in any other exceptional circumstances to which the Exchange has given its prior approval.

        • 13.19

          A new applicant shall procure that every controlling shareholder undertakes to the new applicant and the Exchange to comply with the following requirements:—

          (1) in the event that the controlling shareholder pledges or charges any direct or indirect interest in relevant securities under rule 13.18(1) or pursuant to any right or waiver granted by the Exchange pursuant to rule 13.18(4), at any time during the relevant periods specified in rule 13.16A, he must inform the issuer immediately thereafter, disclosing the details specified in rule 17.43(1) to (4); and
          (2) having pledged or charged any interest in securities under sub-paragraph (1) above, he must inform the issuer immediately in the event that he becomes aware that the pledgee or chargee has disposed of or intends to dispose of such interest and of the number of securities affected.

        • 13.20

          An issuer that has been informed of any matter under rule 13.19 must forthwith publish an announcement giving details of the same in accordance with the requirements of rule 17.43.

      • Restrictions on multiple applications

        • 13.21

          Where securities are offered to the public for subscription or purchase, the issuer, its directors, Sponsor and, if applicable, underwriters must take reasonable steps to ensure that multiple or suspected multiple applications are identified and rejected.

          Note: Having taken reasonable steps as required by this rule, the issuer, its directors, Sponsor and, if applicable, underwriters will be entitled to rely on the declaration/representations made by an applicant.

        • 13.22

          In this rule "multiple applications" means circumstances where more than one application is made by the same person; where a person applies for more than 100% of the securities on offer or where a person applies for more than 100% of the shares available in any pool into which the securities on offer are divided in accordance with Practice Note 6. For the purpose of these rules, the shares available in any pool is the initial allocation of shares into the pool prior to the operation of any clawback mechanism required by Practice Note 6.

        • 13.23

          An issuer, its directors, Sponsor and, if applicable, underwriters must ensure that it is a term and condition of the offer of the securities (disclosed as such in the listing document and the relevant application form) that by making an application, each applicant warrants that:—
           
          (1)    (if the application is made for his own benefit) no other application is being made for his benefit by him or by anyone applying as his agent or by any other person;
           
          (2)    (if the application is made by him as agent for the benefit of another person) no other application is being made by him as agent for or for the benefit of that person or by that person or by any other person as agent for that person;
           
          (3)    if he signs the application form as agent for someone else, he has due authority to do so on behalf of that other person.
           

        • 13.24

          The application form shall include a warning as follows:—

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

        • 13.25

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

    • Chapter 14 Listing Documents

      • Preliminary

        • 14.01

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

        • 14.02

          In order to allow the Exchange sufficient time to consider an application for listing:—

          (1) [Repealed 1 October 2013]
          (2) listed issuers are reminded that the listing document in anticipated final form must be lodged with the Exchange at least 10 clear business days prior to the intended date of its bulk printing.

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

        • 14.02A

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

      • Definition

        • 14.03

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

      • Disclaimer

        • 14.04

          Any listing document must contain on its front cover a prominent and legible disclaimer statement in the form set out in rule 2.19.

      • GEM characteristics

        • 14.05

          Any listing document must contain, at a prominent position in the document, and in bold type, a statement concerning the characteristics of GEM in the form set out in rule 2.20.

      • When required

        • 14.06

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

          (1) an offer for subscription;
          (2) an offer for sale;
          (3) a placing of securities of a class new to listing;
          (4) an introduction;
          (5) a rights issue;
          (6) an open offer;
          (7) a capitalisation issue (including in the form of a scrip dividend) or a bonus issue of warrants;
          (8) an exchange or substitution of securities (arising from consolidation or sub-division of shares or a reduction of share capital or otherwise but excluding a conversion of securities into securities of a class al listed); and
          (9) any deemed new listing under the GEM Listing Rules.

        • 14.07

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

      • Contents

        • 14.08

          In the case of a new applicant, the listing document is required to include the following:—

          (1) the statements required pursuant to rule 14.04 (disclaimer) and rule 14.05 (GEM characteristics);
          (2) [Repealed 1 July 2008];
          (3) the statement of business objectives, as described in rules 14.19 to 14.21;
          (4) subject to rule 14.11(6), all of the specific items of information which are set out in Part A of Appendix 1;
          (5) appropriate risk factors, taking into consideration the matters set out in rule 14.22;
          (6) if applicable, the information required by virtue of rule 14.10; and
          (7) subject to rule 14.13 and to the extent not included by virtue of the above, such particulars and information which, according to the particular nature of the applicant and the securities for which listing is sought, is necessary to enable an investor to make an informed assessment of:—
          (a) the activities, profits and losses, assets and liabilities, financial position, management and prospects of the applicant; and
          (b) the rights and trading arrangements attaching to such securities.

        • 14.09

          In the case of an issuer some part of whose share capital is al listed on GEM, the listing document is required to include the following:—

          (1) the statements required pursuant to rule 14.04 (disclaimer) and rule 14.05 (GEM characteristics);
          (2) subject to rule 14.11(1) to (5), all of the specific items of information which are set out in Part B of Appendix 1;
          (3) in circumstances where the listing document is to be issued in conjunction with the raising of new capital by the issuer, appropriate risk factors, taking into consideration the matters set out in rule 14.22;
          (4) if applicable, the information required by virtue of rule 14.10; and
          (5) subject to rule 14.13 and to the extent not included by virtue of the above, such particulars and information which, according to the particular nature of the issuer and the securities for which listing is sought, is necessary to enable an investor to make an informed assessment of:—
          (a) the activities, profits and losses, assets and liabilities, financial position, management and prospects of the issuer; and
          (b) the rights and trading arrangements attaching to such securities.

        • 14.10

          Special requirements for listing documents issued by overseas issuers and PRC issuers are set out in Chapters 24 and 25 respectively.

        • 14.11

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

          (1) rights issues The following paragraphs of Part B of Appendix 1: 8, 24, 26(1), 26(3), 26(4), 26(5), 37 and 42(4)
          (2) open offers As for rights issues
          (3) capitalisation issues (including in the form of scrip dividends) and bonus issues of warrants The following paragraphs of Part B of Appendix 1: 3 to 5, 7, 8, 11, 12, 13, 15, 18, 19, 22 to 43
          (4) exchanges or substitutions As for capitalisation issues
          (5) placings by or on behalf of a listed issuer of securities of a class al listed where a prospectus or other listing document is otherwise required or issued As for rights issues
          (6) Listing documents supporting an introduction in the circumstances set out in rule 10.18(3) where the consolidated assets and liabilities of the issuer are substantially the same as the consolidated assets and liabilities of the listed issuer or issuers whose securities have been exchanged The following paragraphs of Part A of Appendix 1: 8(1), 21, 33, 35 and 37, provided that the information required by paragraph 31(3) of Part B of Appendix 1 is included.

          Note: See also rules 24.05(6) and 24.09(5).

        • 14.12

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

        • 14.13

          The requirements of rule 14.08(7)(a) shall not apply to an introduction in the circumstances set out in rule 10.18(3) and the requirements of rule 14.09(5)(a) shall not apply to a capitalisation issue (including in the form of a scrip dividend) or a bonus issue of warrants, or an exchange or substitution (arising from consolidation or sub-division of shares of securities or a capital reduction of existing listed securities or otherwise).

        • 14.14

          The Exchange reserves the right to require disclosure of such additional or alternative items of information as it considers appropriate in any particular case. The Exchange also has the right to permit the omission or modification of items of information to suit the circumstances of a particular case. Where permission is sought to the omission or modification of items of information, the listing document, in the form desired, may not be issued until such permission has been granted by the Exchange. Issuers are encouraged, through their Sponsors where so retained, to seek informal and confidential guidance from the Exchange at the earliest opportunity.

        • 14.15 [Repealed]

          [Repealed 1 July 2008]

        • 14.16 [Repealed]

          [Repealed 1 July 2008]

        • 14.17 [Repealed]

          [Repealed 1 July 2008]

        • 14.18 [Repealed]

          [Repealed 1 July 2008]

      • Statement of business objectives

        • 14.19

          A new applicant must include in its listing document a statement of business objectives, having due regard to the disclosure requirements under Rule 18.08A in its annual reports and half-year reports, and set out at least the following information:—

          (1) general information as to:
          (a) the overall business objectives of the new applicant; and
          (b) the market potential for the new applicant's business over the period comprising the remainder of the current financial year of the applicant and the 2 financial years thereafter;
          (2) a detailed description of the new applicant's objectives for each of the products, services or activities (and any other objectives) analysed over the period comprising the remainder of the current financial year of the applicant and the 2 financial years thereafter;

          Notes:
          1 In the event that the applicant wishes to set its business objectives over a longer time frame, it shall be free to do so, provided always that the time frame envisaged is clearly set out in the statement of business objectives.
          2 The statement of business objectives should specify particular strategies, critical paths or milestones against which the applicant's progress may, in the future, be compared.
          3 Without prejudice to the generality of Note 2, new applicants are encouraged to include information as to the projected trends which they foresee for their products, services or activities. These projected trends should be:—
          (a) analysed by reference to such of the measurements of progress as the new applicant and its Sponsor decide are appropriate; and
          (b) set out, as far as practicable, in compliance with rule 14.21.
          4 It is for the Sponsor to assist the new applicant in determining appropriate descriptions of the business objectives and, in particular the measurements of progress in respect of which the new applicant might appropriately project trends for the term of the statement of business objectives.
          5 New applicants and their Sponsors must be to the possibility that projections set out in the statement of business objectives, whether read in isolation or together with other projections or details contained in the statement, may constitute a profit forecast. If a profit forecast is made, the new applicant must comply with the provisions of rules 14.28 to 14.31.
          (3) a detailed explanation as to how the new applicant proposes to achieve its stated business objectives for the period identified by the new applicant; and
          (4) a clear explanation of all bases and assumptions (including commercial assumptions) in support of the new applicant's assessment of its market and growth potential, business objectives and/or description of how it proposes to achieve its business objectives.

          Notes:
          1 The bases and assumptions must provide all relevant and useful information to investors to help them in forming a view as to the reasonableness and reliability of the statement of business objectives. Such bases and assumptions should draw the investor's attention to and where possible quantify those uncertain factors which could materially affect the achievement by the new applicant of its business objectives within the time frame indicated.
          2 The bases and assumptions should be specific rather than general, definite rather than vague. It will not normally be acceptable for assumptions to relate to matters which the directors, by virtue of their particular knowledge and experience in the business, are best able to take a view on or are able to exercise control over.

        • 14.20

          The statement of business objectives need not comprise nor include a profit forecast by the new applicant. However, to the extent that it does comprise or include a profit forecast or should the new applicant otherwise wish to make a profit forecast in the listing document, the new applicant must comply with the provisions set out in rules 14.28 to 14.31.

        • 14.21

          The information provided in the statement of business objectives should, so far as practicable, be set out by reference to the new applicant's half-year end (in the event this follows listing) and full-year end in respect of its current financial year and the half-year ends and full-year ends of the 2 financial years thereafter.

          Note: The purpose of this exercise is to facilitate future comparison between the issuer's statement of business objectives and its actual performance and future published financial information (see rule 18.08A).

      • Risk factors

        • 14.22

          In the case of a new applicant, or a listed issuer proposing to issue a listing document in conjunction with the raising of new capital, the listing document should fully set out, explain and give appropriate prominence to any risk factors which should be drawn to shareholders' and prospective investors' attention, having regard, as a minimum, to the following principles:—

          (1) whether or not there are risks that are relevant to the issuer itself, including as to matters such as reliance on particular products or services, the concentration of expertise within the issuer and continued sources of funding;
          (2) whether or not there are risks that are relevant to the issuer's business, including risks attendant with the products, services or activities themselves and risks relevant to the industry or sectors in which the issuer operates; and
          (3) whether or not there are risks on a macro-scale that are relevant to the issuer, including geographic, economic, political and exchange rates, currency controls or other financial risks relevant to the issuer or the markets in which it operates.

          Note: Risk factors should be capable of being read in isolation and should not be accompanied by statements or qualifications concerning steps that the issuer proposes to implement in order to alleviate such risks. Information in this regard may however be contained elsewhere in the listing document.

      • Responsibility

        • 14.23

          Directors of the issuer, including any proposed director who is named as such in the listing document, are required, collectively and individually, to accept full responsibility for the listing document and a statement (in the form set out in rule 2.18) to this effect must be included in the listing document.

      • Subsequent events

        • 14.24

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

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

          the issuer shall, as soon as practicable, submit to the Exchange for its review and, once the Exchange has confirmed that it has no further comments thereon, issue a supplementary listing document giving details of the change or new matter, unless the Exchange approves any other course of action. In such circumstances, the Exchange may, at its discretion, withdraw any listing approval granted or impose any conditions which it considers appropriate.

          For this purpose "significant" means significant for the purpose of making an informed assessment of the matters mentioned in rules 14.08(7) or 14.09(5).

      • Language and format

        • 14.25

          Every listing document must either be in the English language and be accompanied by a Chinese translation or be in the Chinese language and be accompanied by an English translation.

        • 14.26

          The information contained in the listing document should be clearly presented and should be in the plain language format specified or recommended by the Exchange and/or the Commission from time to time.

      • Illustrations

        • 14.27

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

      • Profit forecasts

        • 14.28

          No listing document is required to contain a profit forecast. No listing document may contain any reference (general or particular) to future profits or contain dividend forecasts based on an assumed future level of profits unless supported by a formal profit forecast. Dividend forecasts not based on assumed future profits are not subject to this rule.

        • 14.29

          The issuer must determine in advance with its financial adviser or Sponsor whether to include a profit forecast in a listing document. Where a profit forecast appears in any listing document, it must be clear, unambiguous and presented in an explicit manner and the principal assumptions, including commercial assumptions, upon which it is based, must be stated. The accounting policies and calculations for the forecast must be reviewed and reported on by the reporting accountants and their report must be set out. The Sponsor or financial adviser must report in addition that it has satisfied itself that the forecast has been stated by the directors after due and careful enquiry, and such report must be set out.

          A "profit forecast" for this purpose means any forecast of profits or losses, however worded, and includes any statement which explicitly or implicitly quantifies the anticipated level of future profits or losses either expressly or by reference to previous profits or losses or any other benchmark or point of reference. It also includes any profit estimate, being any estimate of profits or losses for a financial period which has expired but for which the results have not yet been audited or published. Any valuation of assets (except for property interests (as defined in rule 8.01(3)) or businesses acquired by an issuer based on discounted cash flows or projections of profits, earnings or cash flows is regarded as a profit forecast.

        • 14.30

          A profit forecast appearing in a listing document should normally cover a period which is coterminous with the issuer's financial year-end. If, exceptionally the profit forecast period ends at a half or quarter year-end, the interim report for that half or quarter year must be audited. Profit forecast periods not ending on the financial year-end, half or quarter year-end will not be permitted.

        • 14.31

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

    • Chapter 15 Prospectuses

      • Preliminary

        • 15.01

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

        • 15.02

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

      • Transfer of functions

        • 15.03

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

        • 15.04

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

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

        • 15.05

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

      • Certificates of exemption

        • 15.06

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

      • Abridged prospectuses

        • 15.07

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

      • Procedural requirements

        • 15.08

          On making an application for listing in accordance with rule 12.05, the draft prospectus must be passed to the Listing Division. The Listing Division may promulgate from time to time procedures to be followed in the submission of prospectuses for vetting.

        • 15.09

          Every listed issuer must notify the Listing Division at least 10 clear business days in advance of the date on which it is proposed to register a prospectus.

        • 15.10

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

        • 15.11

          If the Exchange is satisfied that the prospectus delivered to it pursuant to rules 12.25 and 12.26E(2) should be authorised for registration pursuant to the Companies (Winding Up and Miscellaneous Provisions) Ordinance, it will issue a certificate under section 38D(5) or section 342C(5) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (as the case may be). It is the responsibility of the issuer to deliver the prospectus and any ancillary documents to the Companies Registry for registration pursuant to section 38D(7) or section 342C(7) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (as the case may be).

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

    • Chapter 16 Publication Requirements

      • Role of the Exchange

        • 16.01

          Subject to rule 12.15, no listing document may be issued until the Exchange has confirmed to the issuer that it has no further comments thereon.

        • 16.01A

          A new applicant must publish its Application Proof on the GEM website in accordance with rule 16.17 and Practice Note 5.

        • 16.01B

          A new applicant must publish its Post Hearing Information Pack on the GEM website in accordance with rule 16.17 and Practice Note 5.

        • 16.02

          The Exchange reserves the right to oblige listed issuers to issue supplementary particulars and/or clarification announcements in circumstances where the Exchange is of the view that an issuer has failed to comply, in full, with the requirements of the GEM Listing Rules.

        • 16.03

          Any publication by an issuer pursuant to the GEM Listing Rules must be made in both the English and Chinese languages unless otherwise stated.

      • Methods of publication and dissemination

        • 16.04

          Without in anyway limiting the publication, notice or dissemination requirements relevant to an issuer under applicable laws or the issuer's own constitutional documents, the following documents shall be subject to the following minimum publication requirements under these GEM Listing Rules:—

          (1) all announcements including notices required under the GEM Listing Rules, must be submitted for publication on the GEM website in accordance with rules 16.17 and 16.18;
          (2) all listing documents, annual reports and accounts (and, where applicable, summary financial reports), half-year reports (and, where applicable, summary half-year reports) and quarterly reports, and all circulars to shareholders required under the GEM Listing Rules, must be submitted for publication on the GEM website in accordance with rules 16.17 and 16.18; and
          (3) all other documents which, in the case of a listed issuer, are corporate communications required under the GEM Listing Rules and, in the case of a new applicant, are required to be published under the GEM Listing Rules in connection with its application for listing must be submitted for publication on the GEM website in accordance with rules 16.17 and 16.18.

        • 16.04A

          (1) Subject to the provisions set out in this rule 16.04A, any requirement in the GEM Listing Rules for a listed issuer to send, mail, dispatch, issue, publish or otherwise make available any corporate communication may, to the extent permitted under all applicable laws and regulations and the listed issuer's own constitutional documents, be satisfied by the listed issuer sending or otherwise making available the corporate communication to the relevant holders of its securities using electronic means and any requirement in the GEM Listing Rules that a corporate communication of a listed issuer must be in printed form may be satisfied by the corporate communication being in electronic format.
          (2) Other than as permitted under rule 16.04A(2A) in relation to a corporate communication published on the listed issuer's own website pursuant to rule 16.19, the corporate communication may be sent or otherwise made available by the listed issuer to a holder of its securities using electronic means (which term includes sending or otherwise making available the corporate communication to the holder in electronic format) only where the listed issuer has previously received from that holder an express, positive confirmation in writing that the holder wishes to receive or otherwise have made available to the holder the corporate communication by the means and in the manner proposed by the listed issuer.
          (2A)
          (a) To the extent that:
          (i) the shareholders of the listed issuer have resolved in general meeting that the listed issuer may send or supply corporate communications to shareholders by making them available on the listed issuer's own website; or
          (ii) the listed issuer's constitutional documents contain provision to that effect,
          a holder of the listed issuer's securities in relation to whom the following conditions are met is taken to have agreed that the listed issuer may send or supply corporate communications to him in that manner.
          (b) The conditions are that:
          (i) the holder has been asked individually by the listed issuer to agree that the listed issuer may send or supply corporate communications generally, or the corporate communication in question, to him by means of the listed issuer's own website; and
          (ii) the listed issuer has not received a response indicating the holder's objection within the period of 28 days beginning with the date on which the listed issuer's request was sent.
          (c) A holder is not taken to have so agreed if the listed issuer's request:
          (i) did not state clearly what the effect of a failure to respond would be; or
          (ii) was sent less than 12 months after a previous request made to him for the purposes of this rule 16.04A(2A) in respect of the same class of corporate communications.
          (d) The listed issuer must notify the intended recipient of:
          (i) the presence of the corporate communication on the website;
          (ii) the address of the website;
          (iii) the place on the website where it may be accessed; and
          (iv) how to access the corporate communication.
          (e) The corporate communication is taken to be sent:
          (i) on the date on which the notification required under rule 16.04A(2A)(d) is sent; or
          (ii) if later, the date on which the corporate communication first appears on the website after that notification is sent.
          (3) A listed issuer which, availing itself of this rule 16.04A, sends or otherwise makes available a corporate communication to holders of its securities using electronic means must:
          (a) afford holders the right at any time by reasonable notice in writing served on the listed issuer to change their choice (whether by positive consent or deemed consent under rule 16.04A(2A)) as to whether they wish to receive corporate communications in printed form or using electronic means. The listed issuer must set out in each such corporate communication the steps for notifying the listed issuer of any such change together with a statement expressly informing holders that:
          (i) holders may at any time choose to receive corporate communications either in printed form or using electronic means; and
          (ii) holders who have chosen (or are deemed under rule 16.04A(2A) to have chosen) to receive the corporate communication using electronic means and who for any reason have difficulty in receiving or gaining access to the corporate communication will promptly upon request be sent the corporate communication in printed form free of charge; and
          (b) without prejudice to their right to use any other written means of communication for such purpose, provide holders of its securities with the option of notifying the listed issuer by email of any change in their choice as to whether they wish to receive corporate communications in printed form or using electronic means or of any request to receive the corporate communication in printed form. The listed issuer must provide holders of its securities with an email address for this purpose.

          Note: It is the sole responsibility of the listed issuer to ensure that any proposed arrangement is permitted under, and that the listed issuer will at all times comply with, all applicable laws and regulations and the listed issuer's own constitutional documents.

        • 16.04B

          (1) Any requirement in the GEM Listing Rules for a listed issuer to send, mail, dispatch, issue, publish or otherwise make available any corporate communication in both English and Chinese may, where the listed issuer has made adequate arrangements to ascertain whether or not a holder of its securities wishes to receive the English language version only or the Chinese language version only and to the extent permitted under applicable laws and regulations and the listed issuer's own constitutional documents, be satisfied by the listed issuer sending the English language version only or the Chinese language version only (in accordance with the holder's stated wish) to the holder concerned. Any arrangement by the listed issuer to ascertain a holder's wish must afford the holder the choice of receiving the English language version only, the Chinese language version only or both the English language version and the Chinese language version.
          (2) A listed issuer which, availing itself of this Rule 16.04B, sends the English language version only or the Chinese language version only of a corporate communication to holders of its securities must afford holders the right at any time by reasonable notice in writing served on the listed issuer to change their choice as to whether they wish to receive the English language version only, the Chinese language version only or both the English language version and the Chinese language version. The listed issuer must set out in each such corporate communication the steps for notifying the listed issuer of any such change together with a statement expressly informing holders that they may at any time choose to receive the English language version only, the Chinese language version only or both the English language version and the Chinese language version notwithstanding any wish to the contrary previously conveyed to the listed issuer.

          Note: By way of an example and without prejudice to the generality of the above, the Exchange will normally regard as adequate an arrangement along the following lines:
          (1) A letter, together with a pre-paid reply form (the "First Letter") in both English and Chinese, is sent by the listed issuer to holders of its securities to enable them to select either an English language version or a Chinese language version or both versions of the corporate communication. The First Letter clearly explains the consequential arrangement (see (3) below) if no reply is received from such holders by a certain date (the "Deadline").
          (2) The listed issuer sends the selected language version of the corporate communication to those holders who have made a selection.
          (3) If no reply is received on or before the Deadline, the following arrangements apply, where applicable :—
          (a) the English language version of the corporate communication is sent to: (i) all overseas holders; and (ii) all Hong Kong holders other than natural persons with a Chinese name; and
          (b) the Chinese language version of the corporate communication is sent to all Hong Kong holders who are natural persons with a Chinese name.
          Whether a holder is a Hong Kong or an overseas person will be determined by his or its address as appearing in the listed issuer's register of securities holders.
          (4) When the corporate communication is sent out according to the arrangements set out in (3) above, a letter, together with a pre-paid request form (the "Second Letter") in both English and Chinese, is attached to or printed at some prominent place in the sent out versions of the corporate communication stating that the corporate communication prepared in the other language will be available upon request.
          (5) Both the English language version and the Chinese language version of the corporate communication is made available on the listed issuer's website in an accessible format and a copy in electronic format of the corporate communication in both languages is submitted to the Exchange in accordance with the publication requirements of Chapter 16.
          (6) The listed issuer provides a dial-up hotline service or other equivalent public communication channel acceptable to the Exchange to enable holders to make enquiry of the listed issuer's proposed arrangements.
          (7) The First Letter and the Second Letter mention that the corporate communication will be available in both languages on the listed issuer's website and a dial-up hotline service or other equivalent public communication channel will be provided as mentioned in (5) and (6) respectively.
          (8) The listed issuer makes a public announcement stating the proposed arrangements at the same time as the First Letter is dispatched to holders.

        • 16.04C

          Listing documents (including any supplemental listing document(s) or subsequent amendments to the listing document(s)) published by a new applicant must be made available in electronic form on the Exchange’s website and the issuer’s own website.
           
          Note:    Companies (Winding Up and Miscellaneous Provisions) Ordinance states that it shall not be lawful to issue any form of application for shares in or debentures of a company unless the application form is issued with a prospectus that is compliant with that ordinance. The Exchange would expect the combination of this statutory requirement and rule 16.04C to result in the issue of both listing documents and application forms in the same medium, i.e. in electronic format only, unless a Mixed Media Offer is adopted.

      • Publication of electronic form prospectus and printed application form

        • 16.04D

          (1) Where an issuer intends to rely on section 9A of the Companies (Exemption of Companies and Prospectuses from Compliance with Provisions) Notice (Cap.32L) ("Class Exemption Notice") and issue a printed application form for its equity securities with an electronic form prospectus displayed on certain websites ("Mixed Media Offer"), it must satisfy all the conditions in the Class Exemption Notice. Where the issuer publishes any announcement under the Class Exemption Notice, the announcement must be published in accordance with rules 16.17 and 16.18. There is no need to clear the announcement with the Exchange.
          (2) Where the issuer intends to offer equity securities to the public relying on the Class Exemption Notice, the information required by rule 16.09(3) shall be replaced by the following information:
          (a) that the issuer intends to rely on the Class Exemption Notice and issue a printed application form for its equity securities without it being accompanied by a printed form prospectus relating to the offer;
          (b) that throughout the offer period, prospective investors may access and download the electronic form prospectus relating to the offer from either the issuer's website or the GEM website;
          (c) the address of each of the issuer's website and the GEM website, the place on the website where the electronic form prospectus may be accessed and how that prospectus may be accessed;
          (d) that throughout the offer period, copies of the printed form prospectus will be available for collection at specified locations, free of charge, upon request by any member of the public;
          (e) the particulars of the specified locations; and

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

        • 16.05

          No announcement, notice or other document that is required to be cleared by the Exchange may be published, or submitted for publication on the GEM website in accordance with rules 16.17 and 16.18 until the Exchange has confirmed that it has no further comments thereon.

        • 16.06

          The Exchange reserves the right to require an issuer to publish any announcement, notice or other document in any format or manner as may from time to time be prescribed by the Exchange, including by way of paid announcement in any gazetted newspapers.

          Note: Any issuer is at liberty to publish in the newspapers any announcement, notice or other document that has been cleared for publication by the Exchange.

      • Formal notice on issue

        • 16.07

          In the following cases, a formal notice stating the information set out in rule 16.09 must be published on the GEM website on the date of issue of the listing document:—

          (1) an offer for subscription or an offer for sale;
          (2) a placing by or on behalf of a new applicant where 20% or more of the amount placed is made available directly to the general public; or
          (3) a placing by or on behalf of a listed issuer of securities of a class new to listing where 20% or more of the amount placed is made available directly to the general public.

        • 16.08

          In the following cases, a formal notice stating the information set out in rule 16.09 must be published on the GEM website, not less than 2 clear business days before dealings commence:—

          (1) a placing by or on behalf of a new applicant which does not fall within rule 16.07(2);
          (2) a placing by or on behalf of a listed issuer of securities of a class new to listing which does not fall within rule 16.07(3);
          (3) an introduction by or on behalf of a new applicant of any class of securities;
          (4) an introduction by or on behalf of a listed issuer of securities of a class new to listing; or
          (5) an issue by a listed issuer of securities of a class new to listing which does not fall within any of rule 16.07 or sub-paragraphs (1) to (4) above.

        • 16.09

          A formal notice required for publication on the GEM website in accordance with rules 16.07 or 16.08 must state at least the following:—
           
          (1)  the name and country of incorporation or other establishment of the issuer;
           
          (2)  the amount and title of the securities for which listing is sought;
           
          (3)  the websites at which the listing document, if any, is published;
           
            Note:    Where the issuer intends to rely on the Class Exemption Notice to make a Mixed Media Offer referred to in rule 16.04D, rule 16.04D(2) replaces this sub-rule.
           
          (4)  the date of publication of the notice;
           
          (5)  in the case of a placing, the names of the lead broker and, if applicable, any distributor(s);
           
          (6)  a statement that application has been made to the Exchange for listing of and permission to deal in the securities;
           
          (7)  a statement that the formal notice appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities;
           
          (8)  in the cases set out in rule 16.07 a statement that applications will only be considered on the basis of the listing document;
           
          (9)  the date upon which dealings in the securities are expected to commence; and
           
          (10)  the name and address of the Sponsor (if applicable).
           

        • 16.10

          Model forms of formal notices for offers for subscription or sale, placings and introductions are set out in Appendix 10 for the guidance of issuers. Issuers are reminded that where a prospectus has been registered with the Registrar of Companies pursuant to the Companies (Winding Up and Miscellaneous Provisions) Ordinance, every formal notice must comply with Section 38B of that Ordinance.
           
          Note: A new applicant must not publish formal notices in accordance with rules 16.07, 16.08 and 16.10 until the Exchange has reviewed them.

        • 16.11 [Repealed]

          [Repealed 5 July 2021]

        • 16.12 [Repealed]

          [Repealed 5 July 2021]

      • Results of offers, rights issues and placings

        • 16.13

          In the case of an offer for subscription, offer for sale or open offer, an announcement of the results of the offer, the basis of allotment of the securities (including the extent to which securities have been allotted to the underwriters (if any) and their close associates) and, where relevant, the basis of any acceptance of excess applications must be published on the GEM website as soon as possible, but in any event not later than 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the business day following the date on which the allotment letters or other relevant documents of title are posted.

          Notes:

          1 The announcement should include information regarding the spread of applications and basis of allocation.
          2 In case of a new class of securities to be listed, the announcement should include the minimum prescribed percentage applicable to that class of securities pursuant to rule 11.23 if such information has not been previously disclosed.

        • 16.14

          In the case of an offer for subscription or an offer for sale by tender, an announcement of the striking price must be published on the GEM website as soon as possible, but in any event not later than 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the business day following the date on which the allotment letters or other relevant documents of title are posted.
           
          Note: A new applicant must not publish announcements in accordance with rules 16.13 and 16.14 until the Exchange has reviewed them.

        • 16.15

          In the case of a rights issue, an announcement of the results of the issue (including the extent to which securities have been allotted to the underwriters (if any) and their close associates) and of the basis of any acceptance of excess applications must be published on the GEM website as soon as possible, but in any event not later than 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the business day following the date on which the allotment letters or other relevant documents of title are posted.

        • 16.16

          In the case of a placing (including an initial public offering with a placing tranche), an announcement of the results of the placing containing the details specified in rule 10.12(4) must be published on the GEM website prior to commencement of dealings in the securities so placed.

          Notes:

          1 In the case of a placing of securities by a listed issuer effected pursuant to any general mandate granted to the directors of the issuer in accordance with rule 17.41(2), the further information required to be announced is set out in rule 17.30.
          2 In case of a new class of securities to be listed, the announcement should include the minimum prescribed percentage applicable to that class of securities pursuant to rule 11.23 if such information has not been previously disclosed.

      • Publication on the GEM website

        • 16.17

          After the Listing Division has confirmed that it has no further comments on any draft announcement, notice or other document, the issuer must submit the cleared version to the Exchange, for publication on the GEM website. The cleared version must be submitted in sufficient time so as to enable it to be published on the GEM website in accordance with any time limit prescribed by the GEM Listing Rules. For any announcement, notice or other document required by the GEM Listing Rules to be published on the GEM website but which is not required to be cleared by the Exchange, the issuer must submit the final version of the document. In this regard, the following must be adhered to:
           
          (1)    (a)    A listed issuer or a new applicant which is obliged to publish any announcement or notice under the GEM Listing Rules must submit through HKEx-EPS a -to-publish electronic copy of the document to the Exchange for publication on the GEM website.

          Note: Regard must be had to the operating hours of HKEx-EPS from time to time.
           
            (b) In the case of a new applicant, a written confirmation to the Exchange from each of the sponsors confirming that the announcement or notice has been cleared by the Exchange (where such clearance is required under the GEM Listing Rules) or that the document is required to be published by the new applicant (where such clearance is not so required), must be received by the Exchange prior to the announcement or notice being submitted through HKEx-EPS for publication.
           
            (c) All announcements or notices which are published in the newspapers by an issuer pursuant to the GEM Listing Rules must be clearly presented, use legible font size and paragraph spacing and state that it is available for viewing on the GEM website and the issuer's own website giving details as to where on these websites it is to be found (to the fullest extent known at the time of publication of the announcement or notice).
           
            (d) Where a listed issuer requests a trading halt or suspension of trading in its securities and the trading halt or suspension has been effected, the listed issuer must immediately submit through HKEx-EPS to the Exchange for publication on the GEM website a -to-publish electronic copy of an announcement informing that trading in the securities of the listed issuer has been halted or suspended and setting out briefly the reason for the trading halt or suspension.
           
          (2) (a) Other than where a prospectus is to be registered under the Companies (Winding Up and Miscellaneous Provisions) Ordinance, a listed issuer or new applicant must submit to the Exchange through HKEx-EPS for publication on the GEM website a -to-publish electronic copy of any corporate communication which is required by the GEM Listing Rules (including any listing document of a listed issuer or new applicant which is not to be registered under the Companies (Winding Up and Miscellaneous Provisions) Ordinance). The electronic copy must be received by the Exchange before the day on which it is sent to shareholders by the listed issuer or distributed to the public in the case of a new applicant.
           
            (b) Where a prospectus is to be registered under the Companies (Winding Up and Miscellaneous Provisions) Ordinance, the listed issuer or new applicant must submit to the Exchange through HKEx-EPS for publication on the GEM website a -to-publish electronic copy of each of the prospectus and any application forms. The copies must be submitted to the Exchange at the same time as they are sent to shareholders by the listed issuer or, in the case of a new applicant, their distribution to the public commences. They must be submitted only after the issuer has received the letter from the Companies Registry confirming registration of the prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance.

        • 16.18

          (1) All electronic copies of documents submitted by an issuer through HKEx-EPS to the Exchange for publication on the GEM website must be virus-free with all words being text-searchable and the document printable. The layout and contents of each page on the electronic copy of the documents submitted to the Exchange for publication on the GEM website must be the same as the layout and contents of the corresponding page of the document as published by the issuer (whether in the newspapers, on its own website, as sent to shareholders or otherwise).
          (2) When submitting a document through HKEx-EPS for publication on the GEM website, the issuer must select all such headlines as may be appropriate from the list of headlines set out in Appendix 17 (which is also displayed in HKEx-EPS) and input into the designated free-text field in HKEx-EPS the same title as appears in the document. The GEM Listing Committee has delegated to the Executive Director — Listing Division the power to approve such amendments to Appendix 17 as he may consider necessary or desirable.
          (3)
          (a) Announcement or notice must not be published on the GEM website:
          •   between 8:30 a.m. and 12:00 noon and between 12:30 p.m. and 4:30 p.m. on a normal business day; and
          •   between 8:30 a.m. and 12:30 p.m. on the eves of Christmas, New Year and the Lunar New Year when there is no afternoon session,
          except for:
          (i) [Repealed 10 March 2008];
          (ii) announcements made solely under rule 16.17(1)(d);
          (iii) announcements made solely under rule 17.12, rule 17.13 or rule 31.06;
          (iv) announcements made in response to the Exchange's enquiries of the issuer under rule 17.11 or rule 31.05 if in the announcement the issuer only provides the negative confirmations required under rule 17.11(2) or rule 31.05(2), or refers to its previously published information;
          (v) announcements made in response to media news or reports under rule 17.10 or rule 31.04(2) if in the announcement the issuer only denies the accuracy of such news or reports and/or clarifies that only its previously published information should be relied upon; and
          (vi) announcements relating to suspension and resumption of a Mixed Media Offer applicable to public offers of equity securities and debt securities (see rules 16.04D and 29.21B).
          (b) Subject to rule 16.18(3)(c), where a document is required to be published in both the English and Chinese language, the issuer must submit the -to-publish electronic copy of both the English and Chinese versions of that document together to the Exchange for publication on the GEM website.
          (c) In the case of the English and Chinese versions of a listing document or annual report submitted by an issuer to the Exchange for publication on the GEM website, the issuer must submit the -to-publish electronic copy of one version immediately after submission of the other version.
          (4) Issuers must comply with such requirements as the Exchange may from time to time determine and promulgate with regard to format, timing, procedure or otherwise for publication and submission of documents to the Exchange.

          Note: The Exchange accepts no responsibility for any defects in the content or format of any document submitted for publication on the GEM website and accepts no responsibility for any delay or failure in publication. It is the sole responsibility of the issuer to ensure that all material submitted by it or on its behalf for publication on the GEM website is accurate.

        • 16.19

          (1) Every issuer must have its own website on which it must publish any announcement, notice or other document published under rule 16.17 on the GEM website. The publication should be at the same time as publication of the electronic copy of the document on the GEM website. An issuer is not required to publish an Application Proof or Post Hearing Information Pack on its own website. In any event:
          (a) where the electronic copy of the document is published after 7:00 p.m. on the GEM website, publication on the issuer's own website must not be later than 8:30 a.m. on the business day next following such publication; and
          (b) where the electronic copy of the document is published at any other time on the GEM website, publication on the issuer's own website must not be later than 1 hour after such publication.

          Note: The issuer's website does not need to be hosted on a domain owned or maintained by the issuer. The issuer's website may be hosted on a third-party domain so long as the website is assigned a dedicated location on the Worldwide Web and the issuer's website may be managed by third-party on behalf of the issuer.
          (2) The issuer must ensure that any document published on its website pursuant to the GEM Listing Rules remains available on its website on a continuous basis for at least 5 years from the date of first publication. The public must be able to access these documents on the website free of charge.
          (3) [Repealed 1 January 2013]

      • Miscellaneous

        • 16.20

          All issuers shall retain hard copies of each announcement, notice or document issued by it pursuant to the GEM Listing Rules for a minimum period of 7 years from the date of such announcement.

        • 16.21

          Any announcement, notice or other document published on the GEM website will remain on the "Latest Company Announcements" page for a minimum period of 7 days from the date of publication.

    • Chapter 17 Continuing Obligations

      • Preliminary

        • 17.01

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

        • 17.02

          The continuing obligations in this Chapter are primarily to ensure the maintenance of a fair and orderly securities market and that all market users have simultaneous access to the same information. Issuers must keep the holders of their securities (and the public) fully informed of material factors which might affect their interests and treat the holders of their securities in a proper manner.

        • 17.03

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

        • 17.04

          The directors should seek advice and guidance from the issuer's Sponsor (as long as the issuer is obliged to retain, or otherwise retains, the services of a Sponsor) regarding the issuer's obligation to comply with, and the manner and extent of compliance with, the GEM Listing Rules. They should take such advice and guidance into account.

        • 17.05

          Any announcement an issuer is required to make under the GEM Listing Rules must be made according to the publication requirements in Chapter 16, unless otherwise stated.

      • Continuing disclosure obligations

        • Introduction (17.06-17.09)

          • 17.06

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

          • 17.07

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

          • 17.07A

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

          • 17.07B

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

          • 17.08

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

          • 17.09

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

        • General obligation of disclosure (17.10)

          • 17.10

            (1) Without prejudice to rule 17.11, where in the view of the Exchange there is or there is likely to be a false market in an issuer's securities, the issuer must, as soon as reasonably practicable after consultation with the Exchange, announce the information necessary to avoid a false market in its securities.

            Notes:
            1. This obligation exists whether or not the Exchange makes enquiries under rule 17.11.
            2. If an issuer believes that there is likely to be a false market in its listed securities, it must contact the Exchange as soon as reasonably practicable.
            (2)
            (a) Where an issuer is required to disclose inside information under the Inside Information Provisions, it must also simultaneously announce the information.
            (b) An issuer must simultaneously copy to the Exchange any application to the Commission for a waiver from disclosure under the Inside Information Provisions, and promptly upon being notified of the Commission's decision copy the Exchange with the Commission's decision.

        • Response to enquiries (17.11)

          • 17.11

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

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

            Notes:

            1 The form of the announcement referred to in rule 17.11(2) is as follows:—

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

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

            This announcement is made by the order of the Company. The Board of Directors collectively and individually accepts responsibility for the accuracy of this announcement."
            2. An issuer does not need to disclose inside information under the Rules if disclosure of the information is exempted under the Inside Information Provisions.
            3. The Exchange reserves the right to direct a trading halt of an issuer's securities if an announcement under rule 17.11(1) or 17.11(2) cannot be made promptly.

      • Trading halt or trading suspension

        • 17.11A

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

          (1) it has information which must be disclosed under rule 17.10; or
          (2) it reasonably believes that there is inside information which must be disclosed under the Inside Information Provisions; or
          (3) circumstances exist where it reasonably believes or it is reasonably likely that confidentiality may have been lost in respect of inside information which:
          (a) is the subject of an application to the Commission for a waiver; or
          (b) falls within any of the exceptions to the obligation to disclose inside information under the Inside Information Provisions in section 307D(2) of the SFO.

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

        • Dual listing disclosure obligation (17.12)

          • 17.12

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

        • Disclosure of information released by a listed subsidiary (17.13)

          • 17.13

            Where a subsidiary of the issuer listed on another stock exchange or securities market releases information on that stock exchange or in that securities market, the issuer must ensure that such information is announced as soon as practicable thereafter, irrespective of any obligation on the issuer to announce under the GEM Listing Rules or otherwise.

      • Specific matters relevant to the issuer's business

        • Exposure to borrowers and other specific circumstances that may require disclosure (17.14)

          • 17.14

            Rules 17.15 to 17.21 set out specific instances that give rise to a disclosure obligation on an issuer's part.

            Notes:

            1 Transactions and financing arrangements of the sort referred to in rules 17.15 to 17.21 may also be subject to Chapter 19 (Notifiable Transactions) and/or Chapter 20 (Connected Transactions).
            2 For the purposes of rules 17.15 to 17.21, the following terms have the following meanings:—

            "relevant advance to an entity" means the aggregate of amounts due from and all guarantees given on behalf of:—
            (i) an entity;
            (ii) the entity's controlling shareholder;
            (iii) the entity's subsidiaries;
            (iv) the entity's affiliated companies; and
            (v) any other entity with the same controlling shareholder as the entity in question.
            3 No disclosure is necessary under rules 17.15 to 17.21 where the indebtedness or financial assistance in question arises from a transaction which was approved by shareholders provided that information equivalent to rules 17.17 or 17.18, as applicable, was included in the circular to shareholders of the issuer.
            4 [Repealed 1 January 2013]

        • Advances to an entity (17.15-17.17A)

          • 17.15

            Where the relevant advance to an entity from the issuer or any of its subsidiaries exceeds 8% under the assets ratio defined under rule 19.07(1), the issuer must announce the information in rule 17.17 immediately thereafter. For the avoidance of doubt, an advance to a subsidiary of the issuer, or between subsidiaries of the issuer, will not be regarded as a relevant advance to an entity.

          • 17.16

            Where the relevant advance to an entity increases from that previously disclosed (whether under rule 17.15, 17.16 or 17.22) and the amount of the increase since the previous disclosure is 3% or more under the assets ratio defined under rule 19.07(1), the issuer must announce the information in rule 17.17 immediately thereafter.

          • 17.17

            Under rule 17.15 or 17.16, an issuer must announce the following information:—

            (1) details of the relevant advance to an entity including details of the balances;
            (2) the nature of events or transactions giving rise to the amounts;
            (3) the identity of the debtor group;
            (4) interest rate; and
            (5) repayment terms and collateral.

          • 17.17A

            For the purpose of rules 17.15 and 17.16, any trade receivable is not regarded as a relevant advance to an entity if:

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

        • Financial assistance and guarantees to affiliated companies of an issuer (17.18)

          • 17.18

            Where the financial assistance extended by an issuer or any of its subsidiaries to affiliated companies of the issuer, and guarantees given by the issuer or any of its subsidiaries in respect of facilities granted to affiliated companies of an issuer, in aggregate exceeds 8% under the asset ratio defined under rule 19.07(1), the issuer must immediately thereafter announce the following information:

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

        • Pledging of shares by the controlling shareholder (17.19)

          • 17.19

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

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

            Note: This disclosure obligation is separate from the disclosure obligation arising from the pledging or charging of securities by controlling shareholders in rule 17.43.

        • Loan agreements with covenants relating to specific performance by the controlling shareholder (17.20)

          • 17.20

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

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

        • Breach of loan agreement by an issuer (17.21)

          • 17.21

            If an issuer or any of its subsidiaries breaches the terms of a loan agreement, in respect of any loan that is significant to the group's operations, such that the lender may demand its immediate repayment and where the lender has not waived the breach, the issuer must announce such information.

        • Continuing disclosure requirements (17.22-17.24)

          • 17.22

            Where the circumstances giving rise to a disclosure obligation under rule 17.15 continue to exist at the issuer's half yearly or quarterly period end or annual financial year end, the information specified under rule 17.17, as at such period end or year end, shall be included in the half-year, quarterly or annual report as applicable.

          • 17.23

            Where an obligation arises under rules 17.19, 17.20, 17.21 or 17.43, the disclosures required by these rules should be included in subsequent half-year, quarterly and annual reports for so long as the circumstances giving rise to the obligation continue to exist.

            Note: Please refer to rule 17.43 for further details on the continuing disclosure requirements in respect of securities pledged or charged by controlling shareholders.

          • 17.24

            Where the circumstances giving rise to a disclosure under rule 17.18 continue to exist at the issuer's half yearly or quarterly period end or annual financial year end, its half-year, quarterly or annual report must include a combined balance sheet of affiliated companies as at the latest practicable date. The combined balance sheet of affiliated companies should include significant balance sheet classifications and state the issuer's effective economic interest in the affiliated companies. If it is not practicable to prepare the combined balance sheet of affiliated companies, the Exchange, on the issuer's application, may consider accepting, as an alternative, a statement of the indebtedness, contingent liabilities and capital commitments as at the end of the period reported on by affiliated companies.

        • Material changes following listing (17.25)

          • 17.25

            Any proposed fundamental change in the principal business activities of an issuer or its group must be announced immediately after it has been the subject of any decision. Other than with the prior approval of the issuer's independent shareholders in general meeting under rule 19.89, an issuer may not, during the period of 12 months from the date on which dealings in its securities commenced on GEM, implement any such material change.

            Note: See also rules 19.88 to 19.90.

        • Sufficient operations (17.26-17.26A)

          • 17.26

            (1)    An issuer shall carry out, directly or indirectly, a business with a sufficient level of operations and assets of sufficient value to support its operations to warrant the continued listing of the issuer's securities.
             
              Note:    Rule 17.26(1) is a qualitative test. The Exchange may consider an issuer to have failed to comply with the rule in situations where, for example, the Exchange considers that the issuer does not have a business that has substance and/or that is viable and sustainable.

            The Exchange will make an assessment based on specific facts and circumstances of individual issuers. For example, when assessing whether a money lending business of a particular issuer is a business of substance, the Exchange may consider, among other factors, the business model, operating scale and history, source of funding, size and diversity of customer base and loan portfolio and internal control systems of the money lending business of that particular issuer, taking into account the norms and standards of the relevant industry.

            Where the Exchange raises concerns with an issuer about its compliance with the rule, the onus is on the issuer to provide information to address the Exchange's concerns and demonstrate its compliance with the rule.

             
            (2) Proprietary trading and/or investment in securities by an issuer and its subsidiaries are normally excluded when considering whether the issuer can meet rule 17.26(1).
             
              Note: This rule would not normally apply to proprietary securities trading and/or investment activities carried out in the ordinary and usual course of business by a member of an issuer's group that is:
             
                (a)    a banking company (as defined in rule 20.86);
             
                (b)    an insurance company (as defined in rule 19.04); or
             
                (c)    a securities house (as defined in rule 19.04) that is mainly engaged in regulated activities under the SFO. It should be noted that proprietary securities trading and/or investment is not a regulated activity under the SFO and accordingly, this exemption is not available where proprietary securities trading and/or investment constitutes a significant part of the business of the securities house.

          • 17.26A

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

        • Material matters which impact on profit forecasts (17.26B)

          • 17.26B

            (1) If, during the period of any forecast made by the issuer:—
            (a) an event occurs which, had it been known when the profit forecast was made, would have caused any of the assumptions upon which the forecast is based to have been materially different; or
            (b) profit or loss is generated by some activity outside the issuer's ordinary and usual course of business (which was not disclosed as anticipated in the document containing the profit forecast) and which materially contributes to or reduces, or is likely to materially contribute to or reduce, the profits for such period,
            the issuer must promptly announce the event and relevant details. In the announcement, the issuer must also indicate the likely impact of that event or activity on the profit forecast al made.
            (2) The issuer must announce the information under rule 17.26B(1) as soon as it becomes aware that it is likely that the contribution to or reduction in the profits made or to be made by the profit or loss generated or to be generated as aforesaid will be material.

        • Winding-up and liquidation (17.27)

          • 17.27

            (1) An issuer shall inform the Exchange of and announce the happening of any of the following events, as soon as it comes to its attention:—
            (a) the appointment of a receiver or manager either by any court having jurisdiction or under the terms of a debenture or any application to any court having jurisdiction for the appointment of a receiver or manager, or equivalent action in the country of incorporation or other establishment, in respect of the business or any part of the business of the issuer or the property of the issuer, its holding company or any subsidiary falling under rule 17.27(2);
            (b) the presentation of any winding-up petition, or equivalent application in the country of incorporation or other establishment, or the making of any winding-up order or the appointment of a provisional liquidator, or equivalent action in the country of incorporation or other establishment, against or in respect of the issuer, its holding company or any subsidiary falling under rule 17.27(2);
            (c) the passing of any resolution by the issuer, its holding company or any subsidiary falling under rule 17.27(2) that it be wound up by way of members' or creditors' voluntary winding-up, or equivalent action in the country of incorporation or other establishment;
            (d) the entry into possession of or the sale by any mortgagee of a portion of the issuer's assets where the aggregate value of the total assets or the aggregate amount of profits or revenue attributable to such assets represents more than 5% under any of the percentage ratios as defined under rule 19.04(9); or
            (e) the making of any final judgment, declaration or order by any court or tribunal of competent jurisdiction whether on appeal or at first instance which is not subject to any or further appeal, which may adversely affect the issuer's enjoyment of any portion of its assets where the aggregate value of the total assets or the aggregate amount of profits or revenue attributable to such assets represents more than 5% under any of the percentage ratios defined under rule 19.04(9).
            (2) Rules 17.27(1)(a), (b) and (c) will apply to a subsidiary of the issuer if the value of that subsidiary's total assets, profits or revenue represents 5% or more under any of the percentage ratios defined under rule 19.04(9).

            Note:
            1 For the purposes of rule 17.27(2), 100% of that subsidiary's total assets, profits or revenue (as the case may be) or, where that subsidiary itself has subsidiaries, the consolidated total assets, profits or revenue (as the case may be) of that subsidiary is to be compared to the total assets, profits or revenue (as the case may be) shown in the issuer's latest published audited consolidated financial statements irrespective of the interest held in the subsidiary.
            2 [Repealed 1 January 2013]
            3 [Repealed 1 January 2013]

      • General matters relevant to the issuer's securities

        • Changes in issued shares – Next day disclosure return and monthly return

          • 17.27A

            (1) In addition and without prejudice to specific requirements contained elsewhere in the GEM Listing Rules, an issuer must, whenever there is a change in its issued shares as a result of or in connection with any of the events referred to in rule 17.27A(2), submit through HKEx-EPS, or such other means as the Exchange may from time to time prescribe, for publication on the GEM website a return in such form and containing such information as the Exchange may from time to time prescribe by not later than 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the business day next following the relevant event.
            (2) The events referred to in rule 17.27A(1) are as follows:
            (a) any of the following:
            (i) placing;
            (ii) consideration issue;
            (iii) open offer;
            (iv) rights issue;
            (v) bonus issue;
            (vi) scrip dividend;
            (vii) repurchase of shares or other securities;
            (viii) exercise of an option under the issuer's share option scheme by any of its directors;
            (ix) exercise of an option other than under the issuer's share option scheme by any of its directors;
            (x) capital reorganisation; or
            (xi) change in issued shares not falling within any of the categories referred to in rule 17.27A(2)(a)(i) to (x) or rule 17.27A(2)(b); and
            (b) subject to rule 17.27A(3), any of the following:
            (i) exercise of an option under a share option scheme other than by a director of the issuer;
            (ii) exercise of an option other than under a share option scheme not by a director of the issuer;
            (iii) exercise of a warrant;
            (iv) conversion of convertible securities; or
            (v) redemption of shares or other securities.
            (3) The disclosure obligation for an event in rule 17.27A(2)(b) only arises where:
            (a) the event, either individually or when aggregated with any other events described in that rule which have occurred since the listed issuer published its last monthly return under rule 17.27B or last return under this rule 17.27A (whichever is the later), results in a change of 5% or more of the listed issuer's issued shares; or
            (b) an event in rule 17.27A(2)(a) has occurred and the event in rule 17.27A(2)(b) has not yet been disclosed in either a monthly return published under rule 17.27B or a return published under this rule 17.27A.
            (4) For the purposes of rule 17.27A(3), the percentage change in the listed issuer's issued shares is to be calculated by reference to the listed issuer's total number of issued shares as it was immediately before the earliest relevant event which has not been disclosed in a monthly return published under rule 17.27B or a return published under this rule 17.27A.

          • 17.27B

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

          • 17.27C

            An issuer shall, in relation to each new issue of securities reported in the next day disclosure return under rule 17.27A and the monthly return under rule 17.27B, confirm that (where applicable):

            (1) the issue of securities has been duly authorised by its board of directors;
            (2) all money due to the listed issuer in respect of the issue of securities has been received by it;
            (3) all pre-conditions for listing imposed by the Rules under “Qualification of listing” have been fulfilled;
            (4) all (if any) conditions contained in the formal letter granting listing of and permission to deal in the securities have been fulfilled;
            (5) all the securities of each class are in all respects identical;
            Note: “Identical” means in this context:
            (a) the securities are of the same nominal value with the same amount called up or paid up;
            (b) they are entitled to dividend/interest at the same rate and for the same period, so that at the next ensuing distribution, the dividend/interest payable per unit will amount to exactly the same sum (gross and net); and
            (c) they carry the same rights as to unrestricted transfer, attendance and voting at meetings and rank pari passu in all other respects.
            (6) all documents required by the Companies (Winding Up and Miscellaneous Provisions) Ordinance to be filed with the Registrar of Companies have been duly filed and that compliance has been made with all other legal requirements;
            (7) all the definitive documents of title have been delivered/are to be delivered/are being prepared and will be delivered in accordance with the terms of issue;
            (8) completion has taken place of the purchase by the issuer of all property shown in the listing document to have been purchased or agreed to be purchased by it and the purchase consideration for all such property has been duly satisfied; and
            (9) the trust deed/deed poll relating to the debenture, loan stock, notes or bonds has been completed and executed, and particulars thereof, if so required by law, have been filed with the Registrar of Companies.

        • Subsequent listing (17.28)

          • 17.28

            An issuer shall, prior to their issue, apply for the listing of any further securities which are of the same class as securities al listed and shall not issue such securities unless approval for the listing of those securities has been granted by the Exchange.

        • No further issues of securities within 6 months of listing (17.29)

          • 17.29

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

            (1) the issue of shares, the listing of which has been approved by the Exchange, pursuant to a share option scheme under Chapter 23;
            (2) the exercise of conversion rights attaching to warrants issued as part of the initial public offering;
            (3) any capitalisation issue, capital reduction or consolidation or sub-division of shares;
            (4) the issue of shares or securities pursuant to an agreement entered into before the commencement of dealing, the material terms of which have been disclosed in the listing document issued in connection with the initial public offering; and
            (5) any issue of shares or securities convertible into equity securities of a listed issuer (whether or not of a class al listed) which satisfies the following requirements:
            (a) the issue is for the purpose of an acquisition of assets which would complement the listed issuer's business described in the listed issuer's initial listing document, and the acquisition does not constitute a major transaction, very substantial acquisition or reverse takeover pursuant to rules 19.06(3), (5) and (6) respectively;
            (b) the issue does not result in a controlling shareholder of the listed issuer ceasing to be a controlling shareholder after the issue and, in any event, must not result in a change in control of the listed issuer within the meaning of the Takeovers Code;
            (c) the issue and any transaction related to it is made subject to the approval of shareholders with the following persons abstaining from voting: -
            (i) any core connected person and its close associates; and
            (ii) any shareholder who has a material interest in the issue and/or the related transaction, other than an interest arising solely by virtue of a shareholding in the listed issuer; and
            (d) the circular in respect of the issue and the related transaction which is despatched to the shareholders of the listed issuer must comply with the requirements of a circular as specified in Chapter 19 and contain such information as is necessary for the independent shareholders to make an informed judgement on the issue and related transaction.

            Note: The circular must include:
            (i) an opinion from an independent financial adviser acceptable to the Exchange stating whether, in the financial adviser's opinion, the terms of the proposed issue and related transaction are fair and reasonable so far as the shareholders of the listed issuer (excluding any of the shareholders described in rule 17.29(5)(c)) are concerned;
            (ii) a statement as to whether or not the listed issuer and its directors had any plan or intention to acquire the assets concerned before or at the time of the issue of the listed issuer's initial listing document;
            (iii) the circumstances under which the opportunity to acquire the assets has arisen;
            (iv) the number of new shares or securities to be issued and the dilution effect on shareholders;
            (v) information on the assets to be acquired including their value;
            (vi) an explanation as to how the issue price for the new shares or securities was fixed;
            (vii) reasons for the acquisition and why it is important for the listed issuer to acquire the assets within six months of its listing;
            (viii) the effect of the acquisition on the listed issuer's business and prospects and on the statement of business objectives set out in the listed issuer's initial listing document;
            (ix) how the acquired assets would complement the listed issuer's business; and
            (x) details of the persons who would receive the new shares or securities and their connection, if any, with any core connected persons of the listed issuer.
            (xi) [Repealed 1 October 2013]
            Notes: In exceptional circumstances, the Exchange may be prepared to waive the requirements of this rule, for example where the listed issuer raised, at the time of its initial public offering, less than the maximum amount stated in its listing document and so as to enable the listed issuer to raise the shortfall of such maximum amount.

        • Announcement of issues of securities (17.30-17.30A)

          • 17.30

            Where the directors agree to issue any securities for cash in accordance with rule 17.39 or 17.41, an issuer shall publish an announcement as soon as possible, but in any event not later than the time that is 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the next business day, containing the following information:—

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

            Note: If the issue involves (i) securities convertible into shares of the issuer or (ii) options, warrants or similar rights to subscribe for shares or such convertible securities, the announcement should also contain:
            (a) the conversion/subscription price and a summary of the provisions for adjustments of such price and/or number of shares to be issued and all other material terms of the convertible securities or warrants; and
            (b) the maximum number of shares that could be issued upon exercise of the conversion/subscription rights.
            (3) the total funds to be raised and the proposed use of the proceeds;
            (4) the issue price of each security and the basis for determining the same;
            (5) the net price to the issuer of each security;
            (6) the reasons for making the issue;
            (7) the names of the allottees, if fewer than 6 in number and, in the case of 6 or more allottees details of such allottees in accordance with rule 10.12(4). The Exchange reserves the right to require submission of such further information (on an electronic spreadsheet or such other format as it may request) on the allottees as it may consider necessary for the purpose of establishing their independence, including without limitation details of beneficial ownership;
            (8) the market price of the securities concerned on a named date, being the date on which the terms of the allotment were fixed;
            (9) the total funds raised and a detailed breakdown and description of the funds raised on any issue of equity securities in the 12 months immediately preceding the announcement of the proposed issue of securities, the use of such proceeds, the intended use of any amount not yet utilised and how the issuer has dealt with such amount;
            (10) where applicable, the name of the underwriter/placing agent and the principal terms of the underwriting/placing arrangements;
            (11) a statement whether the issue is subject to shareholders' approval;
            (12) where the securities are issued under a general mandate granted to the directors by the shareholders in accordance with rule 17.41(2), details of the mandate;
            (13) where the securities are issued by way of a rights issue or an open offer, the information set out in paragraph 18 of Appendix 1, Part B;
            (14) the conditions to which the issue is subject or a negative statement if applicable; and
            (15) any other material information with regard to the issue (including any restrictions on the ability of the issuer to issue further securities or any restrictions on the ability of the allottees to dispose of shares issued to them or any restrictions on the ability of existing shareholders to dispose of their securities arising in connection with the allotment).

            Notes:

            (1) This rule does not apply to a grant of options or issue of securities under a share option scheme which complies with Chapter 23. For these, the issuer must follow the announcement requirement under rule 23.06A.
            (2) For any exercise of these options, the issuer must follow the disclosure obligations under rules 17.27A and 17.27B.

          • 17.30A

            Where the securities are issued for cash under the authority of a general mandate granted to the directors by the shareholders in accordance with rule 17.41(2) and at a discount of 20% or more to the benchmarked price set out in rule 17.42B, an issuer shall publish an announcement as soon as possible, but in any event not later than the time that is 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the business day immediately following the day on which the relevant agreement involving the proposed issue of securities is signed. The announcement must disclose, among other things, the following information:

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

        • Results of offers and rights issues (17.31)

          • 17.31

            An issuer shall announce, in accordance with the provisions of rules 16.13 to 16.15, the results and other details of any offer for subscription, offer for sale, rights issue or open offer.

            Note: An issuer shall announce any extension of time granted for the currency of temporary documents of title.

        • Changes of rights attaching to securities (17.32)

          • 17.32

            An issuer shall inform the Exchange and make an announcement concerning any changes in the rights attaching to any class of securities issued or to be issued by the issuer, including any changes in the terms of conversion or exercise of any of its convertible securities.

        • Issue of new warrants to existing warrantholders and/or altering the terms of existing warrants (17.33)

          • 17.33

            Without prejudice to the generality of rule 17.32, where an issuer proposes to issue new warrants to existing warrantholders and/or alter the terms of existing warrants, the issuer must comply with the provisions of rules 21.06 and 21.07.

        • Altering the terms of convertible equity securities (17.34)

          • 17.34

            Without prejudice to the generality of rule 17.32, where an issuer proposes to alter the terms of existing convertible equity securities, the issuer must comply with the provisions of rule 22.03.

        • Purchase of securities (17.35)

          • 17.35

            An issuer shall submit to the Exchange for publication a completed return in such form and containing such information as the Exchange may from time to time prescribe, as soon as practicable after any purchase, sale, drawing or redemption by the issuer, or any member of the group, of its listed securities (whether on the Exchange or otherwise) and the Exchange may disseminate such information to such persons and in such manner as the Exchange thinks fit.

            Notes:

            1 Purchases by the issuer of its own securities (whether on the Exchange or otherwise) must be notified to the Exchange by not later than 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the business day following dealing. The information given should include the number of securities purchased and the purchase price per security or the highest and lowest prices paid, where relevant. In this regard, reference is made to the provisions of rule 13.13.
            2 Issuers may only purchase their own securities on the Exchange in accordance with the provisions of Chapter 13 of the GEM Listing Rules (amended in the case of a PRC issuer by the provisions of Chapter 25).

        • Minimum prescribed public holding (17.36-17.37)

          • 17.36

            An issuer shall inform the Exchange immediately and publish an announcement, if it becomes aware that the number of listed securities which are in the hands of the public has fallen below the minimum percentage prescribed by rule 11.23.

          • 17.37

            Once the issuer becomes aware that the number of listed securities in the hands of the public has fallen below the minimum prescribed percentage, the issuer shall take steps to ensure that compliance is resumed from the earliest practicable opportunity.

            Notes:

            1 Pursuant to the provisions of Chapter 9, the Exchange reserves the right to suspend trading in the issuer's securities or cancel the listing of such securities where the Exchange considers that there are insufficient securities in the hands of the public.
            2 In this regard, issuers should also be aware of the notes to rule 11.23.

        • Other listings (17.38)

          • 17.38

            An issuer shall inform the Exchange immediately and publish an announcement, at such time as any of its securities (or the securities of any of its subsidiaries) become listed or dealt in on any other stock exchange or securities market other than GEM, stating which stock exchange or securities market and of any consequences to the holders of securities listed on GEM.

        • Sufficiency of public float (17.38A)

          • 17.38A

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

            Note: GEM listed issuers that have been allowed a lower minimum prescribed percentage of public float (including those which have been granted a waiver under repealed GEM Rule 11.23(5)) have a grace period of three years to comply with the public float requirement under rule 11.23. Accordingly, all GEM issuers must comply with the public float requirement by no later than 30 June 2011.

        • Pre-emptive rights (17.39-17.42D)

          • 17.39

            Except in the circumstances mentioned in rule 17.41, the directors of an issuer (other than a PRC issuer, to which the provisions of rule 25.23 apply) shall obtain the consent of shareholders in general meeting prior to allotting, issuing or granting:—

            (1) shares;
            (2) securities convertible into shares; or
            (3) options, warrants or similar rights to subscribe for any shares or such convertible securities.

            Note: Importance is attached to the principle that a shareholder should be able to protect his proportion of the total equity by having the opportunity to subscribe for any new issue of equity securities. Accordingly, unless shareholders otherwise permit, all issues of equity securities by the issuer must be offered to the existing shareholders (and, where appropriate, to holders of other equity securities of the issuer entitled to be offered them) pro rata to their existing holdings, and only to the extent that the securities offered are not taken up by such persons may they be allotted or issued to other persons or otherwise than pro rata to their existing holdings. This principle may be waived by the shareholders themselves on a general basis, but only within the limits of rules 17.41 and 17.42.

          • 17.40

            Notwithstanding rule 17.41(2), the directors of the issuer (other than a PRC issuer, to which the provisions of rule 25.23 apply) shall obtain the consent of the shareholders in general meeting prior to allotting any voting shares if such allotment would effectively alter the control of the issuer.

          • 17.41

            No such consent as is referred to in rule 17.39 shall be required:—

            (1) for the allotment, issue or grant of such securities pursuant to an offer made to the shareholders of the issuer which excludes for that purpose any shareholder that is resident in a place outside Hong Kong provided the directors of the issuer consider such exclusion to be necessary or expedient on account either of the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place and, where appropriate, to holders of other equity securities of the issuer entitled to be offered them, pro rata (apart from fractional entitlements) to their existing holdings but subject to rule 10.29; or

            Notes:
            1 The issuer must make enquiry regarding the legal restrictions under the laws of the relevant place and the requirements of the relevant regulatory body or stock exchange and may only exclude such overseas shareholders on the basis that, having made such enquiry, it would be necessary or expedient to do so.
            2 If any shareholders that are resident outside Hong Kong are excluded from an offer of securities pursuant to rule 17.41(1), the issuer shall include an explanation for the exclusion in the relevant circular or document containing the offer of securities. Issuers shall ensure that the circular or offer document is delivered to such shareholders for their information subject to compliance with the relevant local laws, regulations and requirements.
            (2) if, but only to the extent that, the existing shareholders of the issuer have by ordinary resolution in general meeting given a general mandate to the directors of the issuer, either unconditionally or subject to such terms and conditions as may be specified in the resolution, to allot or issue such securities or to grant any offers, agreements or options which would or might require securities to be issued, allotted or disposed of, whether during the continuance of such mandate or thereafter, subject to a restriction that the aggregate number of securities allotted or agreed to be allotted must not exceed the aggregate of (i) 20% of the number of issued shares of the issuer as at the date of the resolution granting the general mandate (or in the case of a scheme of arrangement involving an introduction in the circumstances set out in rule 10.18(3), 20% of the number of issued shares of the issuer following implementation of the scheme) and (ii) the number of such securities repurchased by the issuer itself since the granting of the general mandate (up to a maximum number equivalent to 10% of the number of issued shares the issuer as at the date of the resolution granting the repurchase mandate), provided that the existing shareholders of the issuer have by a separate ordinary resolution in general meeting given a general mandate to the directors of the issuer to add such repurchased securities to the 20% general mandate.

            Notes:

            1. Other than where independent shareholders' approval has been obtained, an issue of securities to a connected person pursuant to a general mandate given under rule 17.41(2) is only permitted in the circumstances set out in rule 20.90.

            2. If the issuer conducts a share consolidation or subdivision after the issue mandate has been approved in general meeting, the maximum number of securities that may be issued under the mandate as a percentage of the total number of issued shares at the date immediately before and after such consolidation or subdivision shall be the same.

            3. The exemption for the shareholders' approval requirement under rule 17.41(1) does not apply to the allotment, issue or grant of securities under an open offer.

          • 17.42

            A general mandate given under rule 17.41(2) shall only continue in force until:—

            (1) the conclusion of the first annual general meeting of the issuer following the passing of the resolution at which time it shall lapse unless, by ordinary resolution passed at that meeting, the mandate is renewed, either unconditionally or subject to conditions; or
            (2) revoked or varied by ordinary resolution of the shareholders in general meeting, whichever occurs first.

          • 17.42A

            Where an issuer has obtained a general mandate from its shareholders pursuant to rule 17.41(2), any refreshments of the general mandate before the next annual general meeting shall be subject to the following provisions:

            (1) any controlling shareholders and their associates or, where there are no controlling shareholders, directors (excluding independent non-executive directors) and the chief executive of the issuer and their respective associates shall abstain from voting in favour;
            (2) the Exchange reserves the right to require the following parties to abstain from voting in favour of the relevant resolution at the general meeting:
            (a) any parties who were controlling shareholders of the issuer at the time the decision to seek a refreshment of the mandate was made or approved by the board, and their associates; or
            (b) where there were no such controlling shareholders, directors (excluding independent non-executive directors) and the chief executive of the issuer at the time the decision to seek a refreshment of the mandate was made or approved by the board, and their respective associates;
            (3) the issuer must comply with requirements set out in rules 17.47(6) and 17.47(7) and rules 17.47A, 17.47B and 17.47C;
            (4) the relevant circular to shareholders must contain information relating to the issuer's history of refreshments of mandate since the last annual general meeting, the amount of proceeds raised from the utilisation of such mandate, the use of such proceeds, the intended use of any amount not yet utilised and how the issuer has dealt with such amount. The circular must also contain information required under rule 2.28; and
            (5) where the issuer offers or issues securities to its shareholders pro rata to their existing holdings (including where overseas shareholders are excluded for legal or regulatory reasons), it will not be necessary for the issuer to comply with rules 17.42A(1), (2) or (3) in order for it to refresh its general mandate immediately thereafter such that the amount in percentage terms of the unused part of the general mandate upon refreshment is the same as the unused part of the general mandate immediately before the issue of securities. In such cases, it need only obtain approval from its shareholders and comply with rule 17.42A(4).

          • 17.42B

            In the case of a placing or open offer of securities for cash consideration, an issuer may not issue any securities pursuant to a general mandate given under rule 17.41(2) if the relevant price represents a discount of 20% or more to the benchmarked price of the securities, such benchmarked price being the higher of:
             
            (1)    the closing price on the date of the relevant placing agreement or other agreement involving the proposed issue of securities under the general mandate; and
             
            (2)    the average closing price in the 5 trading days immediately prior to the earlier of:
             
              (a)    the date of announcement of the placing or the proposed transaction or arrangement involving the proposed issue of securities under the general mandate;
             
              (b) the date of the placing agreement or other agreement involving the proposed issue of securities under the general mandate; and
             
              (c) the date on which the placing or subscription price is fixed,
             
              unless the issuer can demonstrate that it is in a serious financial position and that the only way it can be saved is by an urgent rescue operation which involves the issue of new securities at a price representing a discount of 20% or more to the benchmarked price of the securities or that there are other exceptional circumstances. The issuer shall provide the Exchange with detailed information on the allottees to be issued with securities under the general mandate.

          • 17.42C

            The issuer may not issue securities convertible into new shares of the issuer for cash consideration pursuant to a general mandate given under rule 17.41(2), unless the initial conversion price is not lower than the benchmarked price (as defined in rule 17.42B) of the shares at the time of the placing.

          • 17.42D

            The issuer may not issue warrants, options or similar rights to subscribe for (a) any new shares of the issuer or (b) any securities convertible into new shares of the issuer, for cash consideration pursuant to a general mandate given under rule 17.41(2).

        • Information on the pledging of securities in the issuer (17.43)

          • 17.43

            An issuer shall publish an announcement on being informed of, or on otherwise becoming aware of, any matter referred to in rule 13.19 concerning the pledging or charging of any interests in the securities of the issuer by any controlling shareholder. In these circumstances, the information to be announced is as follows:—

            (1) the number and class of securities being pledged or charged;
            (2) the purpose for which the pledge or charge is made;
            (3) any other relevant details; and
            (4) in the event that the pledgee or chargee has disposed of or intends to dispose of any securities, details of the same, including the number of securities affected or to be affected.

            Note:
            1 Pursuant to rule 17.23, where any obligation arises under rule 17.43, the requisite disclosure made pursuant to this rule should also be included in subsequent half-year, quarterly and annual reports of the issuer for so long as the circumstances giving rise to the obligation continue to exist, provided that such disclosure shall not be required after the expiry of the periods referred to in rule 13.16A.
            2 The disclosure obligations set out in this rule are separate from the disclosure obligations arising from the pledging or charging of securities by the controlling shareholder of the issuer to secure debts of the issuer or to secure guarantees or other obligations of the issuer, which are dealt with in rules 17.19 and 17.23.

      • Meetings

        • Notices of general meetings (17.44)

          • 17.44

            An issuer shall ensure that notice of every general meeting is announced (see also rule 17.46).

        • Proxy forms (17.45)

          • 17.45

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

            Notes:

            1 The object of the requirement relating to proxy forms is to ensure that holders have adequate opportunity to express their views on all resolutions intended to be proposed such as the adoption of the annual accounts and re-election of directors.
            2 Provided two-way proxy forms are made available, the printing and postal arrangements are matters entirely at the discretion of the issuer. The proxy form must state that if it is returned without an indication as to how the proxy shall vote on any particular matter the proxy will exercise his discretion as to whether he votes and if so how. The proxy form must state that a shareholder is entitled to appoint a proxy of his own choice and must provide a space for the name of such proxy.
            3 Pursuant to rule 16.04(3), the proxy form must be submitted for publication on the GEM website in accordance with rules 16.17 and 16.18.

        • Notices to members (17.46-17.46A)

          • 17.46

            (1) An issuer shall send notices to all holders of its listed securities whether or not their registered address is in Hong Kong.
            (2) In addition to any direction of the court, an issuer shall ensure that notice of every meeting of its shareholders or its creditors concerning the issuer (e.g. for winding up petitions, schemes of arrangement or capital reduction) is published in accordance with Chapter 16. The issuer shall despatch a circular to its shareholders at the same time as (or before) the issuer gives notice of the general meeting to approve the transaction referred to in the circular. The issuer shall provide its shareholders with any material information on the subject matter to be considered at a general meeting that comes to the directors' attention after the circular is issued. The issuer must provide the information either in a supplementary circular or by way of an announcement not less than 10 business days before the date of the relevant general meeting to consider the subject matter. The meeting must be adjourned before considering the relevant resolution to ensure compliance with this 10 business day requirement by the chairman or, if that is not permitted by the issuer's constitutional documents, by resolution to that effect (see also rule 17.47B).

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

          • 17.46A

            An issuer shall also disclose the details required under rule 17.50(2) of any directors proposed to be re-elected or proposed new director in the notice or accompanying circular to its shareholders of the relevant general meeting, if such re-election or appointment is subject to shareholders' approval at that relevant general meeting (including, but not limited to, an annual general meeting).

        • Nomination of directors (17.46B)

          • 17.46B

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

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

        • Meetings of holders of securities (17.47-17.47C)

          • 17.47

            (1) An issuer proposing to solicit proxies or votes in connection with any meeting of holders of its securities may only use for such purpose previously published information which remains accurate and is not misleading at the time it is quoted.
            (2) Shareholders must not be put under pressure to vote or abstain from voting at any general meeting and, where their votes are solicited, must be encouraged to consult their professional advisers.
            (3) [Repealed 1 January 2009]
            (4) Any vote of shareholders at a general meeting must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. The issuer must announce the results of the poll in the manner prescribed under rule 17.47(5).

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

            The poll results announcement must include the number of:
            (a) shares entitling the holder to attend and vote on a resolution at the meeting;
            (b) shares entitling the holder to attend and abstain from voting in favour as set out in rule 17.47A;
            (c) shares of holders that are required under the GEM Listing Rules to abstain from voting;
            (d) shares actually voted for a resolution; and
            (e) shares actually voted against a resolution.
            The issuer must appoint its auditors, share registrar or external accountants who are qualified to serve as its auditors as scrutineer for the vote-taking and state the identity of the scrutineer in the announcement. The issuer must state in the announcement whether or not any parties that have stated their intention in the circular to vote against the relevant resolution or to abstain have done so at the general meeting.
            (6) In relation to any transactions that are subject to independent shareholders' approval pursuant to the GEM Listing Rules, any issue of shares or securities convertible into equity securities of an issuer pursuant to rule 17.29(5) or spin-off proposals that are subject to approval of the shareholders of the issuer pursuant to paragraph 3(e) of Practice Note 3:
            (a) the issuer shall establish an independent board committee (which shall consist only of independent non-executive directors) to advise shareholders as to whether the terms of the relevant transaction or arrangement are fair and reasonable and whether such a transaction or arrangement is in the interests of the issuer and its shareholders as a whole and to advise shareholders on how to vote, taking into account the recommendations of the independent financial adviser appointed under rule 17.47(6)(b);
            (b) the issuer shall appoint an independent financial adviser acceptable to the Exchange to make recommendations to the independent board committee and the shareholders as to whether the terms of the relevant transaction or arrangement are fair and reasonable and whether such a transaction or arrangement is in the interests of the issuer and its shareholders as a whole and to advise shareholders on how to vote; and
            (c) the independent board committee shall not consist of any independent non-executive directors who have a material interest in the relevant transaction or arrangement. The independent board committee may consist of only one independent non-executive director if all other independent non-executive directors have a material interest in the relevant transaction or arrangement. If all the independent non-executive directors have a material interest in the relevant transaction or arrangement, no independent board committee can be formed. In that event, the independent financial adviser shall make its recommendation to the shareholders only in the manner prescribed under rule 17.47(7)(b).
            (7) In relation to any transactions that are subject to independent shareholders' approval pursuant to the GEM Listing Rules, any issue of shares or securities convertible into equity securities of an issuer pursuant to rule 17.29(5) or spin-off proposals that are subject to approval of the shareholders of the issuer pursuant to paragraph 3(e) of Practice Note 3, the circular to shareholders must contain at least:
            (a) if applicable, a separate letter from the independent board committee advising shareholders as to whether the terms of the relevant transaction or arrangement are fair and reasonable and whether such a transaction or arrangement is in the interests of the issuer and its shareholders as a whole and advising shareholders on how to vote, taking into account the recommendations of the independent financial adviser; and
            (b) a separate letter from the independent financial adviser containing its recommendation to the independent board committee and shareholders (or, if applicable, to the shareholders only) as to whether the terms of the relevant transaction or arrangement are fair and reasonable and whether such a transaction or arrangement is in the interests of the issuer and its shareholders as a whole and advising shareholders on how to vote. Such letter must set out the reasons for and the key assumptions made and factors taken into consideration in forming that opinion.
            (8) For any connected transactions, the requirements relating to the opinion and recommendation of the independent board committee and the independent financial adviser are set out in Chapter 20.

            Note: "Independent shareholders" under paragraphs (6) and (7) of this rule 17.47 means any shareholders other than controlling shareholders of the issuer and their associates or, where there are no controlling shareholders, any shareholders other than directors (excluding independent non-executive directors) and the chief executive of the issuer and their respective associates.

          • 17.47A

            Parties that are required to abstain from voting in favour at the general meeting pursuant to rules 9.20(1), 9.21, 10.29(1), 10.29A, 10.39(1), 10.39A, 17.42A(1), 17.42A(2), 19.89(2), 19.90(1), 23.04(1) may vote against the resolution at the general meeting of an issuer provided that their intention to do so has been stated in the relevant listing document or circular to shareholders. Any such party may change his mind as to whether to abstain or vote against the resolution, in which case the issuer must, if it becomes aware of the change before the date of the general meeting, immediately despatch a circular to its shareholders or publish an announcement notifying its shareholders of the change and, if known, the reason for such change. Where the circular is despatched or the announcement is published less than 10 business days before the date originally scheduled for the general meeting, the meeting must be adjourned before considering the relevant resolution to a date that is at least 10 business days from the date of despatch or publication by the chairman or, if that is not permitted by the issuer's constitutional documents, by resolution to that effect.

          • 17.47B

            Where under rules 17.46(2) or 17.47A, a meeting is required to be adjourned by resolution, all shareholders are permitted to vote on that resolution. Any shareholders who would have been required to abstain from voting on any resolution that was to be proposed shall vote in favour of the resolution to adjourn the meeting.

          • 17.47C

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

        • Board meetings (17.48)

          • 17.48

            An issuer shall publish an announcement at least 7 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, quarter-year or other period is to be approved for publication.

        • Voting of directors at board meeting (17.48A)

          • 17.48A

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

            Note: The references to "close associate" shall be changed to "associate" where the transaction or arrangement is a connected transaction under Chapter 20.

        • Board decisions (17.49)

          • 17.49

            An issuer shall announce immediately after (and for the purpose of providing details of) the approval by or on behalf of the board of:—

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

            Notes:
            1 The timing of board meetings is a matter for the convenience and judgement of individual boards, but an issuer should announce decisions on dividends and results as soon as practicable after they have been taken. The directors are reminded that it is their direct responsibility to ensure that such information is kept strictly confidential until it is announced. In the case of a preliminary announcement of results, issuers' attention is drawn to the provisions in Chapter 18 regarding disclosure of quarterly, half-year and annual results announcements.
            2 Note 1 is also applicable to a preliminary announcement of results for a full year. As soon as possible after draft accounts have been agreed with the auditors, those accounts, adjusted to reflect any dividend decision, should be approved as the basis of a preliminary announcement of results for the full year.
            3. If there is any change to the expected payment date previously disclosed under rule 17.49(1) or this note, the issuer should announce this fact and the new expected payment date as soon as practicable.
            (4) any proposed change in the capital structure of the issuer, including any redemption of its listed securities.

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

        • Suspension on Failure to Publish Timely Financial Information (17.49A)

          • 17.49A

            Without prejudice to the generality of rules 18.03, 18.49, 18.53, 18.66, 18.78 and 18.79, the Exchange will normally require suspension of trading in an issuer's securities if an issuer fails to publish periodic financial information in accordance with the Rules. The suspension will normally remain in force until the issuer publishes an announcement containing the requisite financial information.

          • 17.49B

            The Exchange will normally require suspension of trading in an issuer’s securities if it publishes a preliminary results announcement for a financial year as required under rule 18.49 and the auditor has issued, or has indicated that it will issue, a disclaimer of opinion or an adverse opinion on the issuer’s financial statements. The suspension will normally remain in force until the issuer has addressed the issues giving rise to the disclaimer or adverse opinion, provided comfort that a disclaimer or adverse opinion in respect of such issues would no longer be required, and disclosed sufficient information to enable investors to make an informed assessment of its financial positions.

             
            Notes: (1) The Exchange will not normally suspend trading in an issuer’s securities under this rule where the issuer publishes a preliminary results announcement for a financial year and the auditor has issued, or has indicated that it will issue, a disclaimer of opinion on the issuer’s financial statements relating to the going concern issue only (and not any other issues). The preliminary results announcement must contain details of the audit modification, the facts and circumstances giving rise to the modification (including the different views of the issuer and its auditor), and the actions taken and/or to be taken by the issuer to address the modification.
              (2) If the issuer has addressed all the issues giving rise to the disclaimer of opinion or adverse opinion before the publication of the preliminary results announcement and disclosed sufficient information to enable investors to make an informed assessment of its financial position, suspension of trading may not be required under this rule.

          • 17.49C

            As a transitional arrangement for issuers whose securities have been suspended from trading under rule 17.49B, the 12 month period referred to in rule 9.14A(1) is extended to 24 months if the suspension during the 12 month period is only due to a disclaimer or adverse opinion on the issuer’s financial statements for the financial years commencing between 1 September 2019 and 31 August 2021, both dates inclusive.

      • Changes

        • 17.50

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

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

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

          Note: Changes to the relevant parts of the articles of association or equivalent documents must conform with the requirements of Appendix 3 to the GEM Listing Rules and, in the case of an overseas issuer which is incorporated or otherwise established in a jurisdiction in respect of which additional requirements are set out in Appendix 11 (including, for these purposes, the PRC), such changes must conform with Appendix 11.
          (2) any changes in its directorate (and, in the case of a PRC issuer, its supervisory committee), and shall procure that new directors or members of its governing body and, in the case of a PRC issuer, supervisors shall lodge with the Exchange as soon as practicable after the appointment a declaration, undertaking and acknowledgement in the relevant form set out in Appendix 6 and the contact information required under rule 5.13A(1) or 25.04A (in the manner prescribed by the Exchange from time to time).

          Where a new director, supervisor or chief executive is appointed or the resignation, re-designation, retirement or removal of a director, a supervisor or chief executive takes effect, the issuer must announce the change as soon as practicable and include the following details of any newly appointed or re-designated director, supervisor or chief executive in the announcement:—
          (a) the full name (including any former name(s) and alias(es)), which should normally be the same as that stated in his declaration, undertaking and acknowledgement in the form set out in Appendix 6 to the GEM Listing Rules and age;
          (b) positions held with the issuer and other members of the issuer's group;
          (c) experience including (i) other directorships held in the last 3 years in public companies the securities of which are listed on any securities market in Hong Kong or overseas, and (ii) other major appointments and professional qualifications;
          (d) length or proposed length of service with the issuer;
          (e) relationships with any directors, senior management, substantial shareholders, or controlling shareholders of the issuer;
          (f) his interests in shares of the issuer within the meaning of Part XV of the Securities and Futures Ordinance;
          (g) amount of the director's or chief executive's emoluments (and, in the case of a PRC issuer, the supervisor's emoluments) and the basis of determining the director's or chief executive's emoluments (and, in the case of a PRC issuer, the supervisor's emoluments) (including any bonus payments, whether fixed or discretionary in nature, irrespective of whether a director, supervisor or chief executive has or does not have a service contract) and how much of these emoluments are covered by a service contract;
          (h) full particulars of any public sanctions made against him by statutory or regulatory authorities;
          (i) where he has at any time been adjudged bankrupt or insolvent, the Court by which he was adjudged bankrupt or insolvent and, if discharged, the date and conditions on which he was granted his discharge;
          (j) where he has at any time been a party to a deed of arrangement or entered into any other form of arrangement or composition with his creditors, full particulars of the deed of arrangement or the arrangement or composition with his creditors;
          (k) full particulars of any unsatisfied judgments or court orders of continuing effect against him;
          (l) where any enterprise, company or unincorporated business enterprise has been dissolved or put into liquidation (otherwise than by a members' voluntary winding up when the company, in the case of a Hong Kong company, was solvent) or bankruptcy or been the object of an analogous proceeding, or entered into any form of arrangement or composition with creditors, or had a receiver, trustee or similar officer appointed over it (i) during the period when he was one of its directors or, in the case of an enterprise, a company or an unincorporated business enterprise established in the PRC, during the period when he was one of its directors, supervisors or managers, or (ii) within 12 months after his ceasing to act as one of its directors, supervisors or managers, as the case may be, full particulars, including the name of the enterprise, company or unincorporated business enterprise, its place of incorporation or establishment, the nature of its business, the nature of the proceeding involved, the date of commencement of the proceeding and the amounts involved together with an indication of the outcome or current position of the proceeding;
          (m) subject to the provisions of the Rehabilitation of Offenders Ordinance or comparable legislation of other jurisdictions, full particulars of any conviction for any offence (including details of each such offence, the court by which he was convicted, the date of conviction and the penalty imposed):
          (i) involving fraud, dishonesty or corruption;
          (ii) under the Securities and Futures Ordinance, the Companies Ordinance, Part II of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (insofar as that Part relates, whether directly or indirectly, to the performance of functions by the Commission in relation to prospectuses and purchase by a company of its own shares) and Part XII of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (insofar as that Part relates, whether directly or indirectly, to the performance of functions by the Commission in relation to prospectuses), the Commodity Exchanges (Prohibition) Ordinance, the repealed Protection of Investors Ordinance, the repealed Securities Ordinance, the repealed Securities (Disclosure of Interests) Ordinance, the repealed Securities and Futures Commission Ordinance, the repealed Commodities Trading Ordinance, the repealed Stock Exchanges Unification Ordinance, the repealed Securities and Futures (Clearing Houses) Ordinance, the repealed Exchanges and Clearing Houses (Merger) Ordinance, the repealed Securities (Insider Dealing) Ordinance, the Bankruptcy Ordinance, the Banking Ordinance, the repealed Leveraged Foreign Exchange Trading Ordinance or any Ordinance relating to taxation, or any comparable legislation of other jurisdictions; or
          (iii) in respect of which he has, within the past 10 years, been sentenced as an adult to a period of imprisonment of six months or more, including suspended or commuted sentences;
          (n) full particulars where:
          (i) he has been identified as an insider dealer under Parts XIII or XIV of the Securities and Futures Ordinance or the repealed Securities (Insider Dealing) Ordinance at any time;
          (ii) any enterprise, company or unincorporated business enterprise with which he was or is connected (as defined in Parts XIII or XIV of the Securities and Futures Ordinance or the repealed Securities (Insider Dealing) Ordinance) or any enterprise, company or unincorporated business enterprise for which he acts or has acted as an officer, supervisor or manager has been identified as an insider dealer under Parts XIII or XIV of the Securities and Futures Ordinance or the repealed Securities (Insider Dealing) Ordinance at any time during the period when he was connected and/or acted as an officer, supervisor or manager;
          (iii) he has been found guilty of or been involved in insider dealing, or been held by any Court or competent authority to have breached any securities or financial markets laws, rules or regulations including any rules and regulations of any securities regulatory authority, stock exchange or futures exchange at any time;
          (iv) any enterprise, company or unincorporated business enterprise in which he was or is a controlling shareholder (as defined in the GEM Listing Rules) or was or is a supervisor, manager, director or officer or has been found guilty of or been involved in insider dealing, or been held by any Court or competent authority to have breached any securities or financial markets laws, rules or regulations including any rules and regulations of any securities regulatory authority, stock exchange or futures exchange at any time during the period when he was a controlling shareholder, supervisor, manager, director or officer; or
          (v) he has been found by the Market Misconduct Tribunal, any Court or competent authority to have breached an obligation under the Inside Information Provisions, or where any issuer of which he was or is a controlling shareholder (as defined in the GEM Listing Rules) or was or is a supervisor, manager, director, chief executive or officer has been found by the Market Misconduct Tribunal, any Court or competent authority to have breached an obligation under the Inside Information Provisions at any time during the period when he was a controlling shareholder, supervisor, manager, director, chief executive or officer;
          (o) where he has been adjudged by a Court or arbitral body civilly liable for any fraud, breach of duty or other misconduct by him involving dishonesty, full particulars of the judgment;
          (p) where any enterprise, company, partnership or unincorporated business enterprise of which he was or is a partner, director, supervisor or manager has had its business registration or licence revoked at any time during the period when he was one of its partners, directors, supervisors or managers, full particulars of such revocation, including the date upon which such registration or licence was revoked, the reasons for the revocation, the outcome and current position;
          (q) where he has at any time been disqualified from holding, or deemed unfit to hold, the position of director, supervisor or manager of an enterprise, a company or an unincorporated business enterprise, or from being involved in the management or conduct of the affairs of any enterprise, company or unincorporated business enterprise, pursuant to any applicable law, rule or regulation or by any competent authority, full particulars of such disqualification or ruling;
          (r) except where such disclosure is prohibited by law, full particulars of any investigation by any judicial, regulatory or governmental authority to which he is subject, including the investigating body, the nature of the investigation and the matters under investigation;
          (s) where he has at any time been refused admission to membership of any professional body or been censured or disciplined by any such body to which he belongs or belonged or been disqualified from membership in any such body or has at any time held a practising certificate or any other form of professional certificate or licence subject to special conditions, full particulars of such refusal, censure, disciplinary action, disqualification or special conditions;
          (t) where he is now or has at any time been a member of a triad or other illegal society, full particulars;
          (u) except where such disclosure is prohibited by law, where he is currently subject to (i) any investigation, hearing or proceeding brought or instituted by any securities regulatory authority, including the Hong Kong Takeovers Panel or any other securities regulatory commission or panel, or (ii) any judicial proceeding in which violation of any securities law, rule or regulation is or was alleged, full particulars of such investigation, hearing or proceeding;
          (v) except where such disclosure is prohibited by law, where he is a defendant in any current criminal proceeding involving an offence which may be material to an evaluation of his character or integrity to be a director or supervisor of the issuer, full particulars of such proceeding;
          (w) any other matters that need to be brought to the attention of holders of securities of the issuer; and
          (x) where there is no information to be disclosed pursuant to any of the requirements of this rule 17.50(2), an appropriate negative statement to that effect.
          The issuer must also disclose in the announcement of resignation or removal of a director, supervisor or chief executive the reasons given by or to the director, supervisor or chief executive for the resignation or removal (including, but not limited to, any information relating to his disagreement with the board and a statement whether or not there are any matters that need to be brought to the attention of holders of securities of the issuer).

          The issuer must publish an announcement on any important change in the holding of an executive office, including changes to any important functions or executive responsibilities of a director.
          (3) any change in its share registrar (see rule 11.08) (including any change in overseas branch share registrar), secretary (see rule 5.14), compliance officer (see rule 5.19) or member of the audit committee (see rule 5.28);
          (4) any change in its auditors or financial year end, the reason(s) for the change and any other matters that need to be brought to the attention of holders of securities of the issuer (including, but not limited to, information set out in the outgoing auditors' confirmation in relation to the change in auditors);

          Note: The issuer must state in the announcement whether the outgoing auditors have provided a confirmation that there are no matters that need to be brought to the attention of holders of securities of the issuer. If no such confirmation has been provided, the announcement must state the reason for this.
          (5) any change in its registered address or registered office or (as applicable) its registered place of business in Hong Kong or agent for the service of process in Hong Kong; and
          (6) any revision of interim reports, quarterly reports, annual reports or summary financial reports, the reason leading to the revision of published financial reports, and the financial impacts, if any.

      • Provision of information in respect of and by directors, supervisors and chief executives

        • 17.50A

          (1) Where, following implementation of this rule, there is a change in any of the information required to be disclosed pursuant to paragraphs (a) to (e) and (g) of rule 17.50(2) during the course of the director's, supervisor's or chief executive's term of office, the issuer must ensure that the change and the updated information regarding the director, supervisor or chief executive is set out in the next published annual or interim report of the listed issuer (whichever is the earlier).
          (2) Where, following implementation of this rule, there is a change in any of the information required to be disclosed pursuant to paragraphs (h) to (v) of rule 17.50(2) during the course of a director's, supervisor's or chief executive's term of office, the issuer must publish an announcement in accordance with Chapter 16 as soon as practicable setting out the updated information regarding the director, supervisor or chief executive and any other information concerning that change that needs to be brought to the attention of holders of the issuer's securities.
          (3) Without prejudice to the issuer's obligation to disclose financial information and biographical details of its directors, supervisors and chief executive(s) under Chapter 18, the disclosures required to be made by an issuer pursuant to paragraphs (1) and (2) are subject to the following exceptions and modifications:
          (a) for rule 17.50(2)(a), an issuer need not disclose the age of the director, supervisor or chief executive in its interim reports;
          (b) for rule 17.50(2)(d), an issuer need not disclose the length of service of a director, supervisor or chief executive;
          (c) for rule 17.50(2)(h), an issuer need not disclose any sanction imposed on it by the Exchange; and
          (d) for rule 17.50(2)(k), an issuer need not disclose the particulars of any unsatisfied judgments or court orders of continuing effect until the relevant judgment or court order becomes final.

        • 17.50B

          Directors, supervisors and chief executive(s) of an issuer must procure and/or assist the issuer to comply with rule 17.50(2) and rule 17.50A including, but not limited to, by immediately informing the issuer of the information referred to in paragraphs (a) to (x) of rule 17.50(2) and any change in the information referred to in paragraphs (a) to (w) of rule 17.50(2) which information concerns the director, supervisor or chief executive. In procuring and/or assisting the issuer in the publication of the information (whether in an announcement in accordance with Chapter 16, or in an annual or interim report, as the case may be), the directors, supervisors and chief executive(s) concerned must accept responsibility for the accuracy of the information.

        • 17.50C

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

      • Appointments outstanding

        • 17.51

          An issuer shall immediately inform the Exchange and publish an announcement containing the relevant details and reasons if:

          (1) there remains outstanding the appointment of any individual(s) to the position of compliance officer as required pursuant to Chapter 5; or
          (2) the issuer fails to set up an audit committee or at any time has failed to meet any of the other requirements set out in rule 5.28 regarding the audit committee. The issuer shall set up an audit committee and/or appoint appropriate members to the audit committee to meet the requirement(s) within 3 months after failing to meet such requirement(s); or
          (3) the number of its independent non-executive directors falls below the minimum number required under rule 5.05(1) or at any time it has failed to meet the requirement set out in rule 5.05(2) regarding qualification of the independent non-executive directors. The issuer shall appoint a sufficient number of independent non-executive directors to meet the minimum number required under rule 5.05(1) or appoint an independent non-executive director to meet the requirement set out in rule 5.05(2) within 3 months after failing to meet the requirement(s).

      • Amendments to company information sheet

        • 17.52

          An issuer shall submit to the Exchange (in the electronic format specified by the Exchange from time to time) for publication on the GEM website a revised company information sheet, in the prescribed form set out in Appendix 5F as soon as reasonably practicable after any particulars on the form previously published cease to be accurate.

      • Inclusion of stock code in documents

        • 17.52A

          An issuer shall set out its stock code in a prominent position on the cover page or, where there is no cover page, the first page of all announcements, circulars and other documents published by it pursuant to these GEM Listing Rules.
           
          Note:    For an issuer’s annual report and interim report, the Exchange would consider rule 17.52A to be satisfied if the issuer’s stock code is displayed prominently in the corporate or shareholder information section of the report.

      • Announcements, circulars and other documents

        • Review of documents (17.53-17.55)

          • 17.53

            Subject to rule 17.53A, where an issuer is obliged to publish any announcements, circulars or other documents for the purposes of the GEM Listing Rules, the documents need not be submitted to the Exchange for review before they are issued unless the documents fall within rule 17.53(1) or (2).
             
            (1)    The issuer shall submit to the Exchange drafts of the following documents for review before they are issued:
             
            (a) listing document (including prospectus);
             
            (b) circular relating to cancellation or withdrawal of listing of listed securities;
             
            (c) circular relating to transaction or matter required under Chapter 19 of the GEM Listing Rules;
             
            (d) circular relating to connected transaction (including continuing connected transaction) required under Chapter 20 of the GEM Listing Rules;
             
            (e) circular to the issuer's shareholders seeking their approval of:
             
            (i) any transaction or arrangement under rule 17.39, 17.40 or 17.47(7);
             
            (ii) any matter relating to share option scheme required under Chapter 23 of the GEM Listing Rules; or
             
            (iii) any warrant proposal under rule 21.07(3); or
             
            (f) circulars or offer documents issued by the issuer in connection with takeovers, mergers or offers.
             
            The issuer shall not issue such documents until the Exchange has confirmed that it has no further comments thereon.
             
            A document should be resubmitted to the Exchange for further comment prior to issue if any material change is made to the document after the Exchange has issued the “no further comment” confirmation (other than changes made to address the comments attached to the “no further comment” confirmation). If there is any doubt as to whether or not a change is material the Exchange must be consulted as soon as possible.
             
            (2)    The following transitional provisions apply to announcements set out in this rule and shall cease to have effect on such date as the Exchange may determine and promulgate.

            An issuer shall submit to the Exchange drafts of the following announcements for review before they are issued:
             
            (a) announcement for any very substantial disposal, very substantial acquisition or reverse takeover under rules 19.34 and 19.35;
             
            (b) announcement for any transaction or arrangement under rules 19.88 to 19.90; or
             
            (c) announcement for any matter relating to a cash company under rules 19.82 and 19.83.
             
            The issuer shall not issue such announcements until the Exchange has confirmed that it has no further comments thereon.
             
            Notes:    1      Draft documents should be submitted in sufficient time for review and, if necessary, re-submission prior to dissemination or final printing.
             
              2 [Repealed 5 July 2021]
             
              3 In the case of documents issued in connection with takeovers, mergers or offers covered by the Takeovers Code, the Exchange will pass its comments on the documents directly to the issuer and will at the same time provide a copy of such comments to the Commission.
             
              4 The Exchange reserves the right to require an issuer to issue a further announcement or document and/or take other remedial action if the original document does not comply with the requirements of the GEM Listing Rules.
             
              5 Where an announcement or advertisement of a new or further issue of securities contains a profit forecast, the provisions of rules 19.61 and 19.62 will apply.
             

          • 17.53A

            In addition to the specified requirements set out in rule 17.53, the Exchange has the right to request to review any announcements, circulars or other documents prior to publication in individual cases. In any such case, the Exchange will communicate to the issuer its direction to review the document prior to publication and the reasons for its decision. The issuer shall accordingly submit to the Exchange draft documents for review and shall not issue the document until the Exchange has confirmed that it has no further comments thereon.

          • 17.53B

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

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

          • 17.53C

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

          • 17.54

            (1) Any listing document, circular or announcement issued by an issuer pursuant to the GEM Listing Rules is required to contain the statement of responsibility and confirmation set out in rule 2.18.
            (2) Any listing document, circular, announcement or notice issued by an issuer pursuant to the GEM Listing Rules must contain on its front cover or inside front cover, or as a heading, a prominent and legible disclaimer statement in the form set out in rule 2.19.
            (3) Any listing document or circular and every annual report and accounts, half-year and quarterly report issued by an issuer pursuant to the GEM Listing Rules (excluding any Explanatory Statement issued pursuant to rule 13.08) must contain at a prominent position in the document, and in bold type, a statement about the characteristics of GEM, in the form set out in rule 2.20.
            (4) Any listing document issued by an issuer must contain a statement to the effect that dealings in securities of the issuer may be settled through CCASS and that investors should seek the advice of their stock broker or other professional adviser for details of those settlement arrangements and how such arrangements will affect their rights and interests.

          • 17.55 [Repealed]

            [Repealed 1 March 2019]

        • Information Gathering (17.55A)

          • 17.55A

            An issuer must provide to the Exchange or the Commission as soon as possible, or otherwise in accordance with time limits imposed by the Exchange or the Commission:
             
            (1)    any information that the Exchange or the Commission reasonably considers appropriate to protect investors or ensure the smooth operation of the market; and
             
            (2)    any other information or explanation that the Exchange or the Commission may reasonably require for the purpose of investigating a suspected breach of or verifying compliance with the GEM Listing Rules or the Securities and Futures Ordinance.
             

          • 17.55B

            In responding to enquiries or investigations by the Exchange or the Commission, a party subject to the enquiries or investigations must provide to the Exchange or the Commission information or explanation which is accurate, complete and up-to-date.

        • Presentation of information (17.56-17.56A)

          • 17.56

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

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

          • 17.56A

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

        • Forwarding of documents, circulars, etc. (17.57)

          • 17.57

            An issuer must, upon request by the Exchange, provide the requested number of certified copies of all resolutions of the issuer including resolutions concerning any of the matters in rules 17.39 to 17.41, except resolutions concerning any other routine business at an annual general meeting, within 15 days after they are passed.

        • Circulars to holders of securities (17.58-17.59A)

          • 17.58

            In the event of a circular being issued to the holders of any of the issuer's securities, the issuer shall issue a copy or summary of such circular to the holders of all its other securities unless the contents of such circular are of no material concern to such other holders.

          • 17.59

            All circulars sent to holders of the issuer's securities must be in the English language and be accompanied by a Chinese translation or be in the Chinese language and be accompanied by an English translation. In respect of overseas members, it shall be sufficient for the issuer to mail an English language version of the circular if it contains a prominent statement in both English and Chinese to the effect that a Chinese language version of the circular is available from the issuer, on request.

          • 17.59A [Repealed]

            [Repealed 1 January 2009]

        • Corporate communications to non registered holders of securities (17.60)

          • 17.60

            An issuer shall:—

            (1) as soon as practicable following a request to HKSCC, and at the expense of the issuer, send to any non registered holder (by means permitted by the GEM Listing Rules) copies of any corporate communications; and
            (2) forward to each participant regardless of whether the participant is a member of the issuer, one copy of each of the corporate communications of the issuer that relate to the relevant Eligible Security, at the same time as they are despatched to the holders of those securities with registered addresses in Hong Kong. Whenever practicable, an issuer should provide a participant with such reasonable number of additional copies of these documents as the participant requests in advance and undertakes to forward to its bona fide clients who have beneficial interests in those Eligible Security.

            Notes:
            1 For the purpose of this rule, the following terms have the following meanings:—

            "non registered holder" such a person or company whose listed securities are held in CCASS, directly or through a participant, and who has notified the issuer from time to time, through HKSCC, that such person or company wishes to receive corporate communications; and
            "participant" a person or company admitted for the time being by HKSCC as a participant of CCASS.
            2 HKSCC will provide listed issuers with up to date lists of participants.

        • Increases in authorised capital (17.61)

          • 17.61

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

      • Trading and Settlement

        • Standard transfer form (17.62)

          • 17.62

            In relation to the transfer of equity securities, an issuer must adopt the standard form of transfer as prescribed by the Exchange from time to time.

        • Certification of transfers (17.63)

          • 17.63

            An issuer shall:—

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

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

        • Registration services (17.64-17.67)

          • 17.64

            An issuer (or its registrar) must provide a standard securities registration service in accordance with rule 17.68. An issuer (or its registrar) may, but shall not be obliged to, provide an optional securities registration service in accordance with rule 17.69 and/or an expedited securities registration service in accordance with rule 17.70. An issuer (or its registrar) must also provide a bulk securities registration service in accordance with rule 17.71 and a certificate replacement service in accordance with rule 17.72. Subject to rule 17.65 below, the issuer shall ensure that where the issuer (or its registrar) charges a fee for registering transfers or cancelling, splitting, consolidating or issuing definitive certificates relating to the issuer's listed securities, such fee must not exceed, in total, the applicable amounts prescribed in rules 17.68 to 17.72.

          • 17.65

            An issuer shall ensure that where it (or its registrar) charges a fee for registering other documents relating to or affecting the title to the issuer's listed securities (e.g. probate, letters of administration, certificates of death or marriage, powers of attorney or other instruments or memorandum and articles of association in respect of a new corporate holder) or for marking or noting documents, such fee must not exceed HK$5 per item per register.

            Note: "Per item" shall be defined to mean each of such other documents submitted for registration.

          • 17.66

            It is the responsibility of an issuer whose registrar is in breach of any of rules 17.63 to 17.74 to report such breach to the Exchange as soon as it becomes aware of the breach and the Exchange reserves the right to communicate such information to the Commission.

          • 17.67

            Save as provided in rules 17.64 to 17.66 or rules 17.68 to 17.74, the issuer shall not and shall use all reasonable endeavour to ensure that neither its registrar nor other agents will charge holders or transferees any other fees for any dealings with them in connection with the transfer or transmission of its listed securities.

        • Issue of certificates, registration and other fees (17.68-17.74)

          • 17.68

            (1) Standard securities registration service: An issuer shall (or shall procure that its registrar shall) issue definitive certificates arising out of a registration of transfer or the cancelling, splitting, consolidating or issuing (otherwise than pursuant to rule 17.72) of certificates within:—
            (a) 10 business days of the date of expiration of any right of renunciation; or
            (b) 10 business days of the receipt of properly executed transfer or other relevant documents or the relevant certificates.
            (2) The fee for registration pursuant to the standard securities registration service shall not exceed, in total, the higher of the following:—
            (a) HK$2.50 multiplied by the number of certificates issued; or
            (b) HK$2.50 multiplied by the number of certificates cancelled.

          • 17.69

            (1) Optional securities registration service: An issuer (or its registrar) may, but shall not be obliged to, provide an optional securities registration service under which definitive certificates are required to be issued within:—
            (a) 6 business days of the date of expiration of any right of renunciation; or
            (b) 6 business days of the receipt of properly executed transfer or other relevant documents or the relevant certificates.
            (2) The fee for registration pursuant to the optional securities registration service shall not exceed, in total, the higher of the following:—
            (a) HK$3.00 multiplied by the number of certificates issued; or
            (b) HK$3.00 multiplied by the number of certificates cancelled.
            (3) If the issuer (or its registrar) fails to effect any registration within the period of 6 business days specified in rule 17.69(1), the fee for such registration shall be that determined in accordance with rule 17.68(2).

          • 17.70

            (1) Expedited securities registration service: An issuer (or its registrar) may, but shall not be obliged to, provide an expedited securities registration service under which definitive certificates are required to be issued within:—
            (a) 3 business days of the date of expiration of any right of renunciation; or
            (b) 3 business days of the receipt of properly executed transfer or other relevant documents or the relevant certificates.
            (2) The fee for registration pursuant to the expedited securities registration service shall not exceed, in total, the higher of the following:
            (a) HK$20.00 multiplied by the number of certificates issued; or
            (b) HK$20.00 multiplied by the number of certificates cancelled.
            (3) If the issuer (or its registrar) fails to effect any registration within the period of 3 business days specified in rule 17.70(1), the registration shall be performed free of charge.

          • 17.71

            (1) Bulk securities registration service: An issuer shall (or shall procure that its registrar shall) provide a bulk securities registration service, for transfers of listed securities representing 2,000 or more board lots of the issuer's listed securities where the securities are being transferred from the name of a single holder into the name of another or the same single holder. Certificates shall be issued pursuant to the bulk securities registration service within 6 business days of the receipt of properly executed transfers or other relevant documents or the relevant certificates.
            (2) The fee for registration pursuant to the bulk securities registration service shall not exceed, in total, the higher of the following:—
            (a) HK$2.00 multiplied by the number of certificates issued; or
            (b) HK$2.00 multiplied by the number of certificates cancelled.

          • 17.72

            Certificate replacement service: An issuer shall (or shall procure that its registrar shall) provide a certificate replacement service. The fee for replacing certificates:

            (1) representing securities with a market value of HK$200,000 or less (at the time the request for replacement is made) for a person named on the register shall not exceed HK$200.00, plus the costs incurred by the issuer (or its registrar) in publishing the required public notice; or
            (2) either:
            (a) representing securities with a market value of more than HK$200,000 (at the time the request for replacement is made); or
            (b) for a person not named on the register (irrespective of the market value of the securities concerned);
            shall not exceed HK$400.00, plus the costs incurred by the issuer (or its registrar) in publishing the required public notice.

          • 17.73

            For the purposes of rules 17.68 to 17.72,

            (1) the expression "business day" shall exclude Saturdays, Sundays and public holidays in Hong Kong; and
            (2) in computing any period of business days, such period shall be inclusive of the business day on which the relevant transfers, certificates or other documents were received (or, if such documents were not received on a business day, the business day next following their receipt) and of the business day on which the relevant certificates were delivered or otherwise made available.

          • 17.74

            References in rules 17.64 to 17.72 to the issuer's registrar providing a service, or to the issuer procuring that its registrar shall provide a service, shall not relieve the issuer of any obligations in respect of any acts or omissions of its registrar.

        • Registration arrangements (17.75)

          • 17.75

            In connection with rules 17.63 to 17.74 if the issuer does not maintain its own registration department, appropriate arrangements must be made with the registrars to ensure compliance with the provisions of such rules.

        • Trading limits (17.76-17.76A)

          • 17.76

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

          • 17.76A

            The issuer must not undertake a subdivision or bonus issue of shares if its share price adjusted for the subdivision or bonus issue is less than HK$1 based on the lowest daily closing price of the shares during the six-month period before the announcement of the subdivision or bonus issue.

        • Change in board lot size (17.77)

          • 17.77

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

        • Closure of books and record date (17.78)

          • 17.78

            (1)    An issuer must announce any closure of its transfer books or register of members in respect of securities listed in Hong Kong at least six business days before the closure for a rights issue, or 10 business days before the closure in other cases. In cases where there is an alteration of book closing dates, a further notice shall be given at least five business days before the announced closure or the new closure, whichever is earlier, unless exceptional circumstances render the giving of such notice impossible, in which case, a further notice (by way of an announcement) should be given as soon as practicable, save that no further notice need be given in the circumstances referred to in rules 17.79 to 17.80. Where the issuer decides on a record date without book closure, these requirements apply to the record date.
             
            (2)    An issuer must ensure that the last day for trading in the securities with entitlements falls at least one business day after the general meeting, if the entitlements require the approval of shareholders in the general meeting or are contingent on a transaction that is subject to the approval of shareholders in the general meeting. This rule shall not apply where the issuer announces the timetable of an entitlement on or before 19 June 2011.
             
            Notes:
             
            1.    For a rights issue, the issuer must provide at least two trading days for trading in the securities with entitlements (i.e. before the ex-date) after publication of the book closure. If trading on the Exchange is interrupted due to a typhoon, “extreme conditions” caused by a super typhoon (as defined in note 3 to rule 17.79) and/or a black rainstorm warning, the book-close date will be automatically postponed, where necessary, to provide at least two trading days (during neither of which trading is interrupted) for trading of the securities with entitlements during the notice period. In these circumstances the issuer must publish an announcement on the revised timetable.
             
            2.    For the purposes of rule 17.78(2),
             
              —    the record date (when there is no book closure) or the last registration date (when there is a book closure) must be at least three business days after the general meeting; and
             
              —    if the issuer fails to publish the result of the poll conducted in the general meeting in the manner prescribed under rule 17.47(5), it must ensure there is at least one trading day for trading in the securities with entitlements after publication of the results of the poll. The issuer must publish an announcement on any revised timetable.

        • Emergency share registration arrangement during a typhoon or “extreme conditions” caused by a super typhoon (17.79)

          • 17.79

            Under the T+2 settlement system, securities trade ex-entitlement (an "ex-date") for two trading days prior to the advertised date on which a listed issuer's transfer books or register of members is to be closed (the "book-close date") preceding a record date; the 2 trading days prior to the book-close date being referred to in this rule (and rule 17.80) as the first and second ex-date, respectively. A typhoon or “extreme conditions” occurring on either of the two ex-dates may affect the ability of the purchaser to effect registration in time. Accordingly, in the event of a typhoon or “extreme conditions”, the following arrangements will apply:—
             
            (1)    Where the No. 8 signal or above is hoisted or remains hoisted, or “extreme conditions” are announced or remain in force, between 9 am and 12 noon on either the first or second ex-date and is not lowered or cancelled at or before 12 noon on the relevant ex-date:—
             
            (a)    the last time for accepting shares for registration shall be deferred to the next business day during normal business hours for each ex-date affected; and
             
            (b) the book-close date shall be automatically postponed by the number of ex-dates affected;
             
            (2)    Where the No. 8 signal or above is hoisted or remains hoisted, or “extreme conditions” are announced or remain in force, between 12 noon and 3 pm on either the first or second ex-date:—
             
            (a)    the last time for accepting shares for registration shall be deferred to the next business day during normal business hours for each ex-date affected; and
             
            (b) the book-close date shall be automatically postponed by the number of ex-dates affected;
             
            (3)    Where the No. 8 signal or above is hoisted between 3 pm and 4 pm on the first ex-date, no changes will be made to the timetable for accepting shares for registration in respect of the reduced business hours on such ex-date;
             
            (4)    Where the No. 8 signal or above is hoisted, or “extreme conditions” are announced, between 3 pm and 4 pm on the second ex-date but lowered or cancelled at or before 9 am on the next business day:—
             
            (a)    the last time for accepting shares for registration shall be deferred to 12 noon on the next business day; and
             
            (b) if the original book-close date is not a business day, the book-close date shall be automatically postponed to the next business day;
             
            (5)    Where the No. 8 signal or above is hoisted, or “extreme conditions” are announced, between 3 pm and 4 pm on the second ex-date but lowered or cancelled after 9 am but at or before 12 noon on the next business day:—
             
            (a)    the last time for accepting shares for registration shall be deferred to 5 pm on the next business day; and
             
            (b) if the original book-close date is not a business day, the book-close date shall be automatically postponed to the next business day;
             
            (6)    Where the No. 8 signal or above is hoisted, or “extreme conditions” are announced, between 3 pm and 4 pm on the second ex-date but not lowered or cancelled until after 12 noon on the next business day:—
             
            (a)    the last time for accepting shares for registration shall be deferred to 12 noon on the following business day; and
             
            (b) the book-close date shall be automatically postponed to such date;
             
            (7) Where the No. 8 signal is lowered or “extreme conditions” are cancelled at or before 12 noon on the first ex-date, no changes will be made in respect of the time for accepting shares for registration or the book-close date in respect of the reduced business hours on such ex-date. On the other hand, where the No. 8 signal is lowered or “extreme conditions” are cancelled at or before 12 noon on the second ex-date, the time for accepting shares for registration shall be deferred to at least 5 pm on the same day but no change will automatically be made to the book-close date;
             
            (8) In each of the circumstances referred to in sub-paragraphs (1) to (7) above, listed issuers may alter the stated book-closure period in accordance with any delays made to the book-close date so that the book-closure period remains the same;
             
            (9) Listed issuers shall not be required to make any announcements with respect to changes made to the ex-dates or the book-close date in accordance with this rule. All investors and practitioners should be aware of these emergency share registration arrangements as any subsequent announcement given of date changes after a typhoon is not likely to assist them. On the other hand, if the deferments referred to above affect the dividend payment date or the end of the book-closure period, a listed issuer must give notice (by way of an announcement) of the new dividend payment date and any extension in the book-closure period as soon as practicable;
             
            (10) Where any of the circumstances referred to in sub-paragraphs (1) to (7) above occur on any deferred ex-dates or on a postponed book-close date, the same arrangements will apply mutatis mutandis;
             
            (11) Listed issuers are required to ensure that where a book-close date is automatically altered by virtue of these arrangements any reference to such date in a resolution, listing document, announcement or circular to shareholders will include such altered date.
             
            Notes:    1.    For clarity, the proposed arrangements have been summarised in Table 1 set out at the end of this Chapter.
             
              2. For the purposes of this rule and Table 1 set out at the end of this Chapter:—
             
            (a)    references to "normal business hours" in respect of a share registrar means at least 9 am to 4 pm; and
             
            (b)    references to a "trading day" shall have the same meaning as in the Rules of the Exchange.
             
              3. According to the “Code of Practice in Times of Typhoons and Rainstorms”, the Hong Kong Government 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 Hong Kong 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.

        • Emergency share registration arrangements during a black rainstorm warning (17.80)

          • 17.80

            A black rainstorm warning occurring on either of the 2 ex-dates (as defined in rule 17.79) may affect the ability of the purchaser to effect registration in time. Accordingly, in the event of a black rainstorm warning, the following arrangements will apply:—

            (1) Where a black rainstorm warning is issued before 9 am and remains in effect at 12 noon:—
            (a) the last time for accepting shares for registration shall be deferred to the next business day during normal business hours for each ex-date affected; and
            (b) the book-close date shall be automatically postponed by the number of ex-dates affected;
            (2) Where a black rainstorm warning issued before 9 am is cancelled at or before 12 noon on either the first or second ex-date, the time for accepting shares for registration shall be deferred to 5 pm on the same day but no change will automatically be made to the book-close date;
            (3) Where a black rainstorm warning is issued at or after 9 am, no changes will be made in respect of the time for accepting shares for registration or the book-close date as the share registrar will open to the public as normal;
            (4) In each of the circumstances referred to sub-paragraph (1) to (3) above, listed issuers may alter the stated book-closure period in accordance with any delays made to the book-close date so that the book-closure period remains the same;
            (5) Listed issuers shall not be required to make any announcements with respect to changes made to the ex-dates or the book-close date in accordance with this rule. All investors and practitioners should be aware of these emergency share registration arrangements as any subsequent announcement given of date changes after a black rainstorm warning is not likely to assist them. On the other hand, if the deferments referred to above affect the dividend payment date or the end of the book-closure period, a listed issuer must give notice (by way of an announcement) of the new dividend payment date and any extension in the book-closure period as soon as practicable;
            (6) Where any of the circumstances referred to in sub-paragraphs (1) to (3) above occur on any deferred ex-dates or on a postponed book-close date, the same arrangements will apply mutatis mutandis;
            (7) Listed issuers are required to ensure that where a book-close date is automatically altered by virtue of these arrangements any reference to such date in a resolution, listing document, announcement or circular to shareholders will include such altered date.

            Notes:

            1 For clarity, the proposed arrangements have been summarised in Table 2 set out in the end of this Chapter.
            2 For the purposes of this rule and Table 2 set out at the end of this Chapter:—
            (a) references to "normal business hours" in respect of a share registrar means at least 9 am to 4 pm; and
            (b) references to a "trading day" shall have the same meaning as in the Rules of the Exchange.

      • Miscellaneous obligations

        • 17.81 [Repealed]

          [Repealed 1 January 2005]

        • 17.82 [Repealed]

          [Repealed 1 January 2005]

        • 17.83 [Repealed]

          [Repealed 1 January 2005]

        • 17.84 [Repealed]

          [Repealed 1 January 2005]

        • 17.85 [Repealed]

          [Repealed 1 January 2005]

        • 17.86 [Repealed]

          [Repealed 1 January 2005]

        • 17.87 [Repealed]

          [Repealed 1 January 2005]

        • Equality of treatment (17.88)

          • 17.88

            An issuer shall ensure equality of treatment for all holders of securities of the same class who are in the same position.

        • Takeovers and share repurchases (17.89)

          • 17.89

            An issuer must comply with the Takeovers Code and the Code on Share Buy-backs.

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

        • Directors' service contracts (17.90-17.91)

          • 17.90

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

            (a) is for a duration that may exceed 3 years; or
            (b) in order to entitle the issuer to terminate the contract, expressly requires the issuer to give a period of notice of more than 1 year or to pay compensation or make other payments equivalent to more than 1 year's remuneration.

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

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

          • 17.91 [Repealed]

            [Repealed 1 October 2020]

        • Independent financial advisers (17.92-17.99)

          • Directors’ contact information (17.91A)

            An issuer shall inform the Exchange as soon as practicable of any change(s) in the contact information, including the information set out in rule 5.13A(1), of its directors (and, in the case of a PRC issuer, supervisors).

            • 17.92

              An independent financial adviser appointed under rule 17.47(6)(b), rule 20.42 or rule 24.05(6)(a)(ii) must take all reasonable steps to satisfy itself that:

              (1) it has a reasonable basis for making the statements required by rule 20.43; and
              (2) without limiting the generality of paragraph (1) above, there is no reason to believe any of the following information is not true or omits a material fact:
              (a) any information relied on by the independent financial adviser in forming its opinion; or
              (b) any information relied on by any third party expert on whose opinion or advice the independent financial adviser relies in forming its opinion.
              Notes:
              1. For the purposes of this rule, the Exchange expects that the reasonable steps an independent financial adviser will typically perform will include the following:
              (a) obtaining all information and documents of the issuer relevant to an assessment of the fairness and reasonableness of the terms of the transaction, for example, if the transaction involves the purchase or sale of products or services, information and documents showing the prices at which the issuer buys and sells such products and services to independent third parties;
              (b) researching the relevant market and other conditions and trends relevant to the pricing of the transaction;
              (c) reviewing the fairness, reasonableness and completeness of any assumptions or projections relevant to the transaction;
              (d) without limiting the generality of paragraph (c) above, in relation to any third party expert providing an opinion or valuation relevant to the transaction:
              (i) interviewing the expert including as to its expertise and any current or prior relationships with the issuer, other parties to the transaction, and core connected persons of either the issuer or another party to the transaction;
              (ii) reviewing the terms of engagement (having particular regard to the scope of work, whether the scope of work is appropriate to the opinion required to be given and any limitations on the scope of work which might adversely impact on the degree of assurance given by the expert's report, opinion or statement); and
              (iii) where the independent financial adviser is aware the issuer or another party to the transaction has made formal or informal representations to the expert, assessing whether the representations are in accordance with the independent financial adviser's knowledge; and
              (e) if there have been any relevant alternative offers made (for example, offers made recently for the same asset), then reviewing and assessing such alternative offers and the reasons given, if any, by the management for rejecting these offers.
              2. The Exchange expects the independent financial adviser will ensure the letter referred to at rule 20.43 takes account of the following principles:
              (a) the source for any fact which is material to an argument should be clearly stated, including sufficient detail to enable the significance of the fact to be assessed; however, if the fact has been included in a document recently sent to shareholders, an appropriate cross reference may instead be made;
              (b) a quotation (for example, from a newspaper or a stockbroker circular) should not be used out of context and details of the origin should be included. Since quotations will necessarily carry the implication that they are endorsed by the independent financial adviser, quotations should not be used unless the independent financial adviser has corroborated or substantiated them;
              (c) pictorial representations, charts, graphs and diagrams should be presented without distortion and, when relevant, should be to scale; and
              (d) any comparables referred to in a document must be a fair and representative sample. The bases for compiling such comparables must be clearly stated in the document.

            • 17.93

              The issuer must:

              (1) afford any independent financial adviser it appoints pursuant to rule 17.47(6)(b) or rule 24.05(6)(a)(ii) full access at all times to all persons, premises and documents relevant to the independent financial adviser's performance of its duties as set out in the GEM Listing Rules. In particular, terms of engagement with experts retained to perform services related to the transaction should contain clauses entitling the independent financial adviser access to:
              (a) any such expert;
              (b) the expert's reports, draft reports (both written and oral), and terms of engagement;
              (c) information provided to or relied on by the expert;
              (d) information provided by the expert to the Exchange or Commission; and
              (e) all other correspondence exchanged between the issuer or its agents and the expert or between the expert, the issuer and the Exchange or Commission;
              Note: The Exchange expects that access to documents for the purposes of this rule would include the right to take copies of the documents without charge.
              (2) keep the independent financial adviser it appoints informed of any material change to any information previously given to or accessed by the independent financial adviser pursuant to paragraph (1) above; and
              (3) provide to or procure for the independent financial adviser all necessary consents to the provision of the information referred to in paragraphs (1) and (2) above to the independent financial adviser.

            • 17.94

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

            • 17.95

              An independent financial adviser must perform its duties with impartiality.

            • 17.96

              An independent financial adviser must be independent from any issuer for whom it acts. An independent financial adviser is not independent if any of the following circumstances exist as at the time of making the declaration required by rule 17.97(1):

              (1) the IFA group and any director or close associate of a director of the independent financial adviser holds, directly or indirectly, in aggregate more than 5% of the number of issued shares of the issuer, another party to the transaction, or a close associate or core connected person of the issuer or another party to the transaction;
              (1A) in the case of a connected transaction, the independent financial adviser holds more than 5% of the number of issued shares of an associate of another party to the transaction;
              (2) any member of the IFA group or any director or close associate of a director of the independent financial adviser is a close associate or core connected person of the issuer or another party to the transaction;
              (2A) in the case of a connected transaction, the independent financial adviser is an associate of another party to the transaction;
              (3) any of the following exceeds 10% of the total assets shown in the latest consolidated financial statements of the independent financial adviser's ultimate holding company or, where there is no ultimate holding company, the independent financial adviser:
              (a) the aggregate of:
              (i) amounts due to the IFA group from:
              (A) the issuer;
              (B) its subsidiaries;
              (C) its controlling shareholder; and
              (D) any close associates of its controlling shareholder; and
              (ii) all guarantees given by the IFA group on behalf of:
              (A) the issuer;
              (B) its subsidiaries;
              (C) its controlling shareholder; and
              (D) any close associates of its controlling shareholder;
              (b) the aggregate of:
              (i) amounts due from the IFA group to:
              (A) the issuer;
              (B) its subsidiaries; and
              (C) its controlling shareholder; and
              (ii) all guarantees given on behalf of the IFA group by:
              (A) the issuer;
              (B) its subsidiaries; and
              (C) its controlling shareholder;
              (c) the aggregate of:
              (i) amounts due from the IFA group to any of the following (referred to in this rule as "the Other Parties"):
              (A) another party to the transaction;
              (B) any holding company of another party to the transaction;
              (C) any subsidiary of any holding company of another party to the transaction;
              (D) any controlling shareholder of:
              (1) another party to the transaction; or
              (2) any holding company of another party to the transaction; and
              (E) any close associate of any controlling shareholder referred to in paragraph (D) above; and
              (ii) all guarantees given by any of the Other Parties on behalf of the IFA group; and
              (d) the aggregate of:
              (i) amounts due to the IFA group from any of the Other Parties; and
              (ii) all guarantees given by the IFA group on behalf of any of the Other Parties;
              (4) any of the following has a current business relationship with the issuer or another party to the transaction, or a director, subsidiary, holding company or substantial shareholder of the issuer or another party to the transaction, which would be reasonably considered to affect the independent financial adviser's independence in performing its duties as set out in the GEM Listing Rules, or might reasonably give rise to a perception that the independent financial adviser's independence would be so affected, except where that relationship arises under the independent financial adviser's appointment to provide the advice:
              (a) any member of the IFA group;
              (b) an employee of the independent financial adviser who is directly engaged in providing the advice to the issuer;
              (c) a close associate of an employee of the independent financial adviser who is directly engaged in providing the advice to the issuer;
              (d) a director of any member of the IFA group; or
              (e) a close associate of a director of any member of the IFA group;
              (5) within 2 years prior to making the declaration pursuant to rule 17.97(1):
              (a) a member of the IFA group has served as a financial adviser to:
              (i) the issuer or its subsidiaries;
              (ii) another party to the transaction or its subsidiaries; or
              (iii) a core connected person of the issuer or another party to the transaction; or
              (b) without limiting paragraph (a), an employee or a director of the independent financial adviser who is directly engaged in providing the subject advice to the issuer:
              (i) was employed by or was a director of another firm that served as a financial adviser to any of the entities referred to at paragraphs (a)(i) to (a)(iii) above; and
              (ii) in that capacity, was directly engaged in the provision of financial advice to the issuer or another party to the transaction;
              (6) the independent financial adviser or a member of the IFA group is the issuer's auditor or reporting accountant.

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

              For these purposes "investment manager" has the meaning given to it in section 316(7) of the Securities and Futures Ordinance.
              3. For the purposes of this rule, ultimate holding company means a holding company that itself does not have a holding company.

            • 17.97

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

              (1) a declaration in the prescribed form set out in Appendix 13 to the effect that the independent financial adviser is independent, including a statement addressing each of the circumstances set out in rule 17.96; and
              (2) an undertaking, in the terms set out in Appendix 14 to:
              (a) comply with the GEM Listing Rules; and
              (b) co-operate in any investigation conducted by the Listing Division and/or the GEM Listing Committee of the Exchange, including answering promptly and openly any questions addressed to the independent financial adviser, promptly producing the originals or copies of any relevant documents and attending before any meeting or hearing at which the independent financial adviser is requested to appear.

            • 17.98

              Where an independent financial adviser or issuer becomes aware of a change in the circumstances set out in the declaration required by rule 17.97(1) during the period the independent financial adviser is engaged by the issuer, the independent financial adviser or issuer must notify the Exchange as soon as possible upon that change occurring.

            • 17.99

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

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

          • Financial advisers appointed in relation to extreme transactions

            • 17.99A

              A financial adviser appointed by a listed issuer under rule 19.53A(2) in relation to an extreme transaction must conduct reasonable due diligence on the assets acquired and/or to be acquired under the extreme transaction to put itself in a position to be able to make the declaration in Appendix 21. The extent of its work and scope of due diligence shall be referenced to Practice Note 2 to the GEM Listing Rules.

            • 17.99B

              The financial adviser must be a person licensed or registered under the SFO for Type 6 regulated activity and permitted under its license or certificate of registration to undertake the work of a sponsor. The financial adviser must submit to the Exchange an undertaking in the prescribed form set out in Appendix 22 to:

              (a) comply with the GEM Listing Rules; and
              (b) co-operate in any investigation conducted by the Listing Division and/or the GEM Listing Committee of the Exchange, including answering promptly and openly any questions addressed to the financial adviser, promptly producing the originals or copies of any relevant documents and attending before any meeting or hearing at which the financial adviser is requested to appear.

            • 17.99C

              The issuer must assist the financial adviser to perform its duties. The requirements under rule 17.93 shall apply mutatis mutandis as if all references to “independent financial adviser” were references to “financial adviser”.

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

        • 17.100

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

      • Corporate Governance Code

        • 17.101

          (1) The Corporate Governance Code in Appendix 15 sets out the principles of good corporate governance and two levels of recommendations: (a) code provisions; and (b) recommended best practices. Issuers are expected to comply with, but may choose to deviate from, the code provisions. The recommended best practices are for guidance only.

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

          Note: For the requirements governing preliminary results announcements, see rules 18.50 and 18.78.
          (3) Where the issuer deviates from the code provisions, it must give considered reasons:
          (a) for annual reports (and summary financial reports), in the Corporate Governance Report under Appendix 15; and
          (b) for half-year reports (and summary half-year reports), either:
          (i) by giving considered reasons for each deviation; or
          (ii) to the extent that it is reasonable and appropriate, by referring to the Corporate Governance Report in the immediately preceding annual report, and providing details of any changes together with considered reasons for any deviation not reported in that annual report. The references must be clear and unambiguous and the half-year report (or summary half-year report) must not contain only a cross-reference without any discussion of the matter.
          (4) For the recommended best practices, issuers are encouraged, but are not required, to state whether they have complied with them and give considered reasons for any deviation.

      • Publication of issuers' constitutional documents

        • 17.102

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

      • Environmental and Social Matters

        • 17.103

          (1)    The Environmental, Social and Governance (“ESG”) Reporting Guide in Appendix 20 comprises two levels of disclosure obligations: (a) mandatory disclosure requirements; and (b) “comply or explain” provisions.
           
          (2)    For the relevant financial year in their annual reports or in separate ESG reports, issuers must:
           
              (a)    disclose the information required under the “Mandatory Disclosure Requirements” in Part B of the ESG Reporting Guide; and
           
              (b)    state whether they have complied with the “comply or explain” provisions set out in Part C of the ESG Reporting Guide.
           
          (3)    Where the issuer deviates from the “comply or explain” provisions, it must give considered reasons in its ESG report.
           
          (4)    Issuers must publish their ESG reports on an annual basis and regarding the same period covered in their annual reports. An ESG report may be presented as information in the issuer’s annual report or in a separate report. Regardless of the format adopted, the ESG report must be published on the Exchange’s website and the issuer’s website.
           
          (5)    Where the ESG report does not form part of the issuer’s annual report:
           
              (a)    To the extent permitted under all applicable laws and regulations and the issuer’s own constitutional documents, an issuer is not required to provide the ESG report in printed form to its shareholders irrespective of whether such shareholders have elected to receive the issuer’s corporate communication electronically or otherwise under rule 16.04A.
           
              (b)    The issuer must notify the intended recipient of:
           
          (i)    the presence of the ESG report on the website;
          (ii)    the address of the website;
          (iii)    the place on the website where it may be accessed; and
          (iv)    how to access the ESG report.
           
              (c)    Notwithstanding the above, the issuer shall promptly provide a shareholder with an ESG report in printed form upon its specific request.
           
              (d)    The issuer is encouraged to publish the ESG report at the same time as the publication of the annual report. In any event, the issuer should publish the ESG report as close as possible to, and no later than five months after, the end of the financial year.
           

        • 17.104

          The nomination committee (or the board) shall have a policy concerning diversity of board members, and shall disclose the policy on diversity or a summary of the policy in the corporate governance report.

          Note: Board diversity will differ according to the circumstances of each issuer. Diversity of board members can be achieved through consideration of a number of factors, including but not limited to gender, age, cultural and educational background, or professional experience. Each issuer should take into account its own business model and specific needs, and disclose the rationale for the factors it uses for this purpose.

      • Tables

        • TABLE 1 (CHAPTER 17) — EMERGENCY SHARE REGISTRATION ARRANGEMENTS FOR T + 2 SETTLEMENT SYSTEM

          Event Ex-entitlement Day (Ex-Date) Issue/cancellation of a typhoon warning signal or “extreme conditions” Registrar Book-Close Date Closed Period for Transfer Books or Register of Members Announcements Required
          Time Status Time for Accepting Shares for Registration
          1 First 9 am -12 noon No. 8 Signal or above is hoisted or remains hoisted and is not lowered at or before 12 noon; or

          “Extreme conditions” are announced or remain in force and are not cancelled at or before 12 noon
          For each ex-date affected defer to the next business day (normal business hours) Automatically postponed by number of ex-dates affected The book-closure period may be extended in accordance with the delay to the book-close date so that the book-closure period remains the same No announcement required unless:—
          (i) the payment date is also deferred, in which case an announcement of the new payment date must be made by the listed issuer; or
          (ii) the book-closure period is extended,
          in both cases the listed issuer must publish a notice of such changes as soon as possible.
          2 Second
          3 First 12 noon -3 pm No. 8 Signal or above is hoisted or remains hoisted during this period; or

          “Extreme conditions” are announced or remain in force during this period
          4 Second
          5 First 3 pm -4 pm No. 8 Signal or above is hoisted No deferment on first ex-date No change No change No announcement required
          6 Second 3 pm -4 pm No. 8 Signal or above is hoisted but lowered at or before 9 am on the next business day; or

          “Extreme conditions” are announced but cancelled at or before 9 am on the next business day
          Defer to 12 noon or the next business day If the original book-close date is a business day - no change. Otherwise postponed to the next business day The book-closure period may be extended in accordance with the delay to the book-close date so that the book-closure period remains the same No announcement required unless:—
          (i) the payment date is also deferred, in which case an announcement of the new payment date must be made by the listed issuer; or
          (ii) the book-closure period is extended,
          in both cases the listed issuer must publish a notice of such changes as soon as practicable.
          7 Second 3 pm -4 pm No. 8 Signal or above is hoisted but lowered after 9 am but at or before 12 noon on the next business day; or

          “Extreme conditions” are announced but cancelled after 9 am but at or before 12 noon on the next business day
          Defer to 5 pm on the next business day If the original book-close date book-close date is a business day - no change. Otherwise postponed to the next business day    
          8 Second 3 pm -4 pm No. 8 Signal or above is hoisted but not lowered until after 12 noon on the next business day; or

          “Extreme conditions” are announced but not cancelled until after 12 noon on the next business day
          Defer to 12 noon on the business day following the next business day ("B day") Automatically postponed to B day
          9 First At or before 12 noon No. 8 Signal is lowered or “extreme conditions” are cancelled No deferment No change No change No announcement required
          10 Second At or before 12 noon No. 8 Signal is lowered or “extreme conditions” are cancelled Extension to 5 pm

          NB: Where any of the above events happen on deferred ex-dates or on a postponed book-close date the relevant arrangements set out above will apply mutatis mutandis.

        • TABLE 2 (CHAPTER 17) — EMERGENCY SHARE REGISTRATION ARRANGEMENTS DURING A BLACK RAINSTORM WARNING

          Event Ex-entitlement Day (Ex-Date) Issue/cancellation of a Black Rainstorm Warning Registrar Book-Close Date Closed Period for Transfer Books or Register of Members Announcements Required
          Time Status of Signal Time for Accepting Shares for Registration
          1 First Before 9 am A Black Rainstorm Warning is issued and remains in effect at 12 noon For each ex-date affected defer to the next business day (normal business hours) Automatically postponed by number of ex-dates affected The book-closure period may be extended in accordance with the delay to the book-close date so that the book-closure period remains the same No announcement required unless:—
          (i) the payment date is also deferred, in which case an announcement of the new payment date must be made by the listed issuer, or
          (ii) the book-closure period is extended,
          in both cases the listed issuer must publish a notice of such changes as soon as possible.
          2 Second
          3 First Before 9 am A Black Rainstorm Warning is issued before 9 am but cancelled at or prior to 12 noon Extension to 5 pm on the same day No change No change No announcement required
          4 Second
          5 First At or after 9 am A Black Rainstorm Warning issued at or after 9 am No change No change No change No announcement required
          6 Second

          NB: Where any of the above events happen on deferred ex-dates or on a postponed book-close date the relevant arrangements set out above will apply mutatis mutandis.

    • Chapter 18 Financial Information

      • Introduction

        • 18.01

          This Chapter sets out the continuing obligations of a listed issuer with regard to the disclosure of routine financial information on an annual, half-yearly and quarterly basis. It also sets out certain recommended disclosure items on discussion and analysis (see rule 18.83) that listed issuers are encouraged to include in their half-year and annual reports. These recommended disclosure items are not obligatory, but merely items relating to good practice which are recommended for disclosure. Additional requirements, relating to non-routine financial disclosure, are set out in the following Chapters:

          Chapter 7 Accountants' Reports and Pro Forma Financial Information
          Chapter 14 Listing Documents
          Chapter 19 Notifiable Transactions
          Chapter 20 Connected Transactions

          Additional disclosure requirements in respect of routine financial information are set out in the following Chapters, in so far as they relate to the following issuers:—

          Chapter 24 Overseas issuers
          Chapter 25 PRC issuers
          Chapter 31 Issuers of debt securities

          Note: In circumstances where the disclosure requirements of Chapters 24 or 25, as appropriate, are inconsistent with the requirements of this Chapter, the requirements of Chapters 24 or 25, as appropriate, shall prevail.

        • 18.02

          A listed issuer is required to prepare annual financial statements, half-year reports and quarterly reports. The contents, timing and publication requirements for each such financial statements or reports are set out in this Chapter.

      • Annual reports

        • Distribution (18.03)

          • 18.03

            The listed issuer must send to:—
             
            (1)    every member of the listed issuer; and
             
            (2)    every other holder of its listed securities,

            a copy of either (i) the directors' report and its annual financial statements and, where the listed issuer prepares consolidated financial statements, the consolidated financial statements, together with a copy of the auditors' report thereon or (ii) its summary financial report, not less than 21 days before the date of the listed issuer's annual general meeting and not more than 3 months after the date upon which the financial period ended. The issuer may send a copy of its summary financial report to a member and a holder of its listed securities in place of a copy of its annual report and financial statements, provided that it complies with rule 18.81 and the relevant provisions set out in sections 437 to 446 of the Companies Ordinance and in the Companies (Summary Financial Reports) Regulation or, in the case of overseas issuers, with provisions no less onerous than the above provisions for listed issuers incorporated in Hong Kong.

            Nothing in this rule shall require the listed issuer to send any of the documents referred to therein to:—
             
            (a)    a person of whose address the listed issuer is unaware; or
             
            (b)    more than one of the joint holders of any of its listed securities.
             
            Notes:  1    "Consolidated financial statements", for the purposes of a Hong Kong listed issuer, has the meaning ascribed to it under section 379(2) of the Companies Ordinance.
             
              2    The directors' report, auditors' report, annual financial statements (including consolidated financial statements) and, where applicable, summary financial report must be in the English language and must be accompanied by a Chinese translation or be in the Chinese language accompanied by an English translation. In respect of overseas members, it shall be sufficient for the listed issuer to mail an English language version of either (i) its directors' report, auditors' report and annual financial statements or (ii) its summary financial report if such documents contain a prominent statement in both English and Chinese to the effect that a Chinese translation is available from the listed issuer, on request.
             
              3    Sections 429 and 431 of the Companies Ordinance require the directors of a Hong Kong issuer to lay the issuer's annual financial statements before its members at its annual general meeting within the period of 6 months after the end of the financial year or accounting reference period to which the annual financial statements relate. An overseas issuer (including for such purposes, a PRC issuer) should comply with the same requirement as a Hong Kong issuer.
             
              4    The Exchange may at its discretion suspend dealings in or cancel the listing of the securities of the listed issuer if it falls into arrears in the issue of its directors' report and financial statements. If the listed issuer has significant interests outside Hong Kong it may apply for an extension of the 6 month period. However, the attention of a Hong Kong issuer is drawn to section 431 of the Companies Ordinance which requires any extension of the time limit to be approved by the Court of First Instance.
             
              5    [Repealed 1 January 2011]
             
              6    Newly listed issuers will be required to prepare and publish the relevant annual report or summary financial report (irrespective of whether the period in question ends on a date before or after the date on which dealings in the securities of the listed issuer commenced) where the 3-month deadline for publishing the report falls after the date on which dealings in the securities of the listed issuer commenced. The requirements under rule 18.03 are not applicable to the reporting period which ended immediately before the listing of a newly listed issuer if the following is disclosed in its listing document:—
             
            (a)    the financial information required under Chapter 18 in relation to annual reports, in respect of such reporting period;
             
            (b)    a statement as to whether it complies with the Corporate Governance Code in Appendix 15 and, if not, the reason for deviation; and
             
            (c)    that it will not breach its constitutional documents, laws and regulations of its place of incorporation or other regulatory requirements as a result of not distributing such annual reports and accounts.
             
            Such a newly listed issuer should publish an announcement no later than the time prescribed in rule 18.03 that the relevant financial information has been included in its listing document. The newly listed issuer must still comply with the requirements under rule 17.103(5).

        • Accounting standards (18.04-18.06)

          • 18.04

            Annual financial statements of a listed issuer are required, subject to rule 18.05 and rule 18.06, to conform with HKFRS, IFRS or CASBE in the case of a PRC issuer that has adopted CASBE for the preparation of its annual financial statements.

            Note: The issuer must apply one of these bodies of standards consistently and shall not normally change from one body of standards to the other unless there are reasonable grounds to justify such change. All reasons for any such change must be disclosed in the annual financial statements.

          • 18.05

            A listed issuer, which is also listed on the New York Stock Exchange or the Nasdaq Stock Market of the United States of America, may prepare annual financial statements drawn up in conformity with Generally Accepted Accounting Principles in the United States of America (US GAAP), subject to the following:—

            (1) the listed issuer has adopted US GAAP for the purposes of reporting to shareholders on the New York Stock Exchange or the Nasdaq Stock Market of the United States of America;
            (2) a listed issuer al listed on the Exchange which subsequently obtains a listing on the New York Stock Exchange or the Nasdaq Stock Market of the United States of America and thereafter adopts US GAAP in place of the standards referred to in rule 18.04 in the preparation of its annual financial statements will be required to compile a statement of the financial effect of material differences from the standards referred to in rule 18.04 in the first annual financial statements in which US GAAP is adopted;
            (3) a listed issuer which was permitted to adopt US GAAP on the basis that it is listed on the New York Stock Exchange or the Nasdaq Stock Market of the United States of America but is no longer so listed, will be required to revert to one of the relevant standards referred to in rule 18.04 for financial reporting purposes; and
            (4) a listed issuer whose principal activity is property development and/or investment may not adopt US GAAP for financial reporting purposes.

          • 18.06

            Where the Exchange, in exceptional circumstances, allows the annual financial statements of any overseas issuer to be drawn up otherwise than in conformity with accounting standards referred to in rule 18.04 or with US GAAP in the circumstances set out in rule 18.05, the Exchange will normally require the annual financial statements to contain a statement of the financial effect of the material differences (if any) and a summary of any material differences in disclosure (if any) from either HKFRS or IFRS referred to in rule 18.04.

        • Information to accompany directors' report and annual financial statements (18.07-18.37)

          • 18.07

            The listed issuer shall include the disclosures required under the relevant accounting standards adopted and the information set out in rules 18.07A to 18.47 in its directors' report and annual financial statements. Unless stated to the contrary the financial information specified in these rules may be included outside the financial statements and will therefore be outside the scope of the auditors' report on the financial statements. The statement of profit or loss and other comprehensive income and statement of financial position set out in the financial statements must include at least the information set out in rule 18.50B. Banking companies (meaning banks, restricted licence banks and deposit-taking companies as defined in the Banking Ordinance) shall, in addition, comply with the Guideline on the Application of the Banking (Disclosure) Rules as issued by the Hong Kong Monetary Authority.

            Notes:
            1 The Exchange may authorise the omission from an annual report of specified items of information if it considers that disclosure of such information would be contrary to the public interest or seriously detrimental to the listed issuer. The Exchange will only authorise such omission provided it is satisfied that the omission is not likely to mislead the public with regard to facts and circumstances, knowledge of which is essential for the assessment of the securities in question. The listed issuer or its representatives will be responsible for the correctness and relevance of the facts on which any application for such exemption is based.
            2 The annual report and financial statements must contain, at a prominent position, and in bold type, a statement about the characteristics of GEM, in the form set out in rule 2.20.
            3 If an accounting estimate reported in prior interim period of the current financial year is changed during the subsequent interim period of the same financial year and has a material effect in that subsequent interim period, the nature and amount of a change in an accounting estimate that has a material effect in the current financial year or which is expected to have a material effect in subsequent periods should be disclosed. If it is impracticable to quantify the amount, this fact should be disclosed.
            4 An annual report shall contain the following information required under other parts of the GEM Listing Rules:
            (a) advance to an entity under rule 17.22;
            (b) pledging of shares by the controlling shareholder under rule 17.23;
            (c) loan agreements with covenants relating to specific performance of the controlling shareholder under rule 17.23;
            (d) breach of loan agreement by an issuer under rule 17.23;
            (e) financial assistance and guarantees to affiliated companies of an issuer under rule 17.24;
            (f) provision of information in respect of and by directors, supervisors and chief executives under rule 17.50A(1);
            (g) for an issuer involving in mining activities, continuing disclosure obligations arise under rules 18A.14 to 18A.17, where appropriate;
            (h) information required under rule 19.36B and/or rule 20.61 about any guarantee regarding the financial performance of a company or business acquired; 
            (i) share option schemes under rules 23.07, 23.08 and 23.09; and
            (j) provision of information in respect of corporate governance code provisions B.1.5 (remuneration payable to members of senior management by band) and C.1.4 (discussion and analysis of group's performance) of Appendix 15 or explain reason for deviation.
            5 Issuers must publish ESG reports in accordance with Rule 17.103 and the ESG Reporting Guide contained in Appendix 20.

          • 18.07A

            In addition, a listed issuer shall include disclosures required under the following provisions of the Companies Ordinance and subsidiary legislation:—

            (1) in financial statements
            (a) Section 383 — Notes to financial statements to contain information on directors' emoluments etc.;
            (b) Schedule 4 — Accounting Disclosures relating to:
            (i) Part 1(1) Aggregate amount of authorized loans;
            (ii) Part 1(2) Statement of financial position to be contained in notes to annual consolidated financial statements;
            (iii) Part 1(3) Subsidiary's financial statements must contain particulars of ultimate parent undertaking;
            (iv) Part 2(1) Remuneration of auditor; and
            (c) Companies (Disclosure of Information about Benefits of Directors) Regulation; and
            (2) in directors' report
            (a) Section 390 — Contents of directors' report: general;
            (b) Section 470 — Permitted indemnity provision to be disclosed in directors' report;
            (c) Section 543 — Disclosure of management contract;
            (d) Schedule 5 — Content of Directors' Report: Business Review; and
            (e) Companies (Directors' Report) Regulation.

            Notes:
            1 Directors must prepare the directors' report which complies with section 388 of the Companies Ordinance and the directors' report must be approved and signed, which complies with section 391 of the Companies Ordinance.
            2 Section 390(3)(b) of the Companies Ordinance requires a company to disclose the name(s) of the director(s) of its subsidiaries. Notwithstanding the disclosure provisions in sub-paragraph 2(a) above, a listed issuer not incorporated in Hong Kong is not required to disclose the name(s) of its subsidiaries' director(s).

          • 18.08 [Repealed]

            [Repealed 31 December 2015]

          • 18.08A

            In each annual report and half-year report published during at least the first 2 full financial years after listing, a statement by the directors as to the issuer's achievement of its business objectives as stated in its listing document at the time of listing under rule 14.19. The discussion in the statement should include a balanced and concise analysis of the level of achievement of the business objectives in terms of both qualitative and quantitative financial and non-financial information. There should be a description of the principal risks and uncertainties facing the company and a commentary on the directors' approach to them, together with an explanation of any material differences between the disclosure in the listing document and actual business progress in the relevant period (including as to the use of proceeds as indicated in the listing document).

            Notes:

            1 For general guidance, issuers may include information such as:
            (a) significant developments by key business segments;
            (b) trends, internal and external environmental and industry factors affecting performance or achievement of the objectives;
            (c) the principal risks and uncertainties facing the issuer or its group, including strategic, operational and financial risks; and
            (d) the key performance indicators used by the directors to measure performance in achieving the issuer's objectives.
            2 Key performance indicators are factors by reference to which the development, performance or position of the business can be measured effectively. For the purposes of rule 18.08A these rules issuers should determine and disclose their own key performance indicators which should be of a quantitative nature so that the level of achievement of objectives can be quantified. Such quantitative standards may include, for example:
            (a) customer retention and satisfaction
            (b) capital adequacy and expenditure
            (c) store portfolio changes
            (d) reserve replacement costs
            (e) equipment utilisation and capacity
            (f) loan loss
            (g) asset quality
            (h) expected return on sales
            (i) sales volume per square foot of store space, etc.
            3 The issuer should use, where appropriate, a tabular format of presentation with a recitation of the business objectives (as stated in its listing document) on one side and the directors' comments about level of achievement on the other.

          • 18.08B

            An issuer shall include in its annual report a statement of sufficiency of public float with information as required under rule 17.38A.

          • 18.09

            (1) In relation to connected transactions (including continuing connected transactions) that are not exempt from annual reporting requirement in Chapter 20, particulars of the transactions pursuant to rule 20.69.
            (2) Where a listed issuer includes in its annual report particulars of a related party transaction or continuing related party transaction (as the case may be) in accordance with applicable accounting standards adopted for the preparation of its annual financial statements, a statement as to whether or not the transaction falls under the definition of "connected transaction" or "continuing connected transaction" (as the case may be) in Chapter 20. The listed issuer must also confirm whether or not it has complied with the disclosure requirements in accordance with Chapter 20.

          • 18.10

            A statement showing:—

            (1) the name of every subsidiary, its principal country of operation, its country of incorporation or other establishment and the kind of legal entity it is registered as (for the purposes of the relevant jurisdiction);
            (2) particulars of the issued share capital and debt securities of every subsidiary; and
            (3) the nature of the business of every subsidiary,

            provided that if, in the opinion of the directors of the listed issuer, the number of them is such that compliance with this rule would result in particulars of excessive length being given, compliance with this rule shall not be required except in the case of subsidiaries carrying on a business the results of the carrying on of which, in the opinion of the directors, materially affected the amount of the profit or loss of the group or the amount of the assets of the group.

          • 18.11

            Details of the classes and numbers of any convertible securities, options, warrants or similar rights issued or granted by the listed issuer or any of its subsidiaries during the financial year, together with the consideration received by the listed issuer or any of its subsidiaries therefor.

          • 18.12

            Particulars of any exercise made during the financial year of any conversion or subscription rights under any convertible securities, options, warrants or similar rights issued or granted at any time by the listed issuer or any of its subsidiaries.

          • 18.13

            Particulars of any redemption or purchase or cancellation by the listed issuer or any of its subsidiaries of its redeemable securities and the amount of such securities outstanding after any such redemption or purchase or cancellation has been made.

          • 18.14

            Particulars of any purchase, sale or redemption by the listed issuer, or any of its subsidiaries, of its listed securities during the financial year (analysed on a monthly basis), or an appropriate negative statement. Such statement must include the aggregate price paid or received by the listed issuer for such purchases, sales or redemptions and should distinguish between those securities purchased or sold:—

            (1) on the Exchange;
            (2) on another stock exchange;
            (3) by private arrangement; and
            (4) by way of a general offer; and

            any such statement must also distinguish between those listed securities which are purchased by the listed issuer (separately distinguishing those shares which are cancelled and those which are held as treasury stock, if applicable) and those which are purchased by a subsidiary of the listed issuer. The directors' report shall contain references to the purchases made during the year and the directors' reasons for making such purchases (see rule 13.13(2)).

          • 18.15

            (1) Subject to rule 18.15(2), a statement as at the end of the relevant financial year showing the interests and short positions of each director and chief executive of the listed issuer in the shares, underlying shares and debentures of the listed issuer or any associated corporation (within the meaning of Part XV of the Securities and Futures Ordinance):
            (a) as recorded in the register required to be kept under section 352 of the Securities and Futures Ordinance; or
            (b) as otherwise notified to the listed issuer and the Exchange pursuant to the required standard of dealings by directors of listed issuers as referred to in rule 5.46 (which for purposes of this sub-paragraph shall be deemed to apply to the PRC issuer's supervisors to the same extent as it applies to directors); or
            (c) if there is no such interests or short positions, a statement of that fact,

            provided that the Exchange may agree, in its sole discretion, that compliance with this sub-paragraph may be modified or waived in respect of any associated corporation if, in the opinion of the Exchange, the number of associated corporations in respect of which each director and chief executive is taken or deemed to have an interest under Part XV of the Securities and Futures Ordinance is such that compliance with this sub-paragraph would result in particulars being given which are not material in the context of the group and are of excessive length.
            (2) The information required to be included by virtue of rule 18.15(1) must specify the company in which interests or short positions are held, the class to which those securities belong and the number of such securities held, but need not disclose:
            (a) the interests of a director or a chief executive officer in the shares of the listed issuer or any of its subsidiaries if such interest is held solely in a non-beneficial capacity and is for the purpose of holding the requisite qualifying shares; or
            (b) the non-beneficial interests of directors or chief executive officers in the shares of any subsidiary of the listed issuer in so far as that interest comprises the holding of shares subject to the terms of a written, valid and legally enforceable declaration of trust in favour of the parent company of that subsidiary or the listed issuer and such interest is held solely for the purpose of ensuring that the relevant subsidiary has more than one member.

            Note: Where interests in securities arising from the holding of such securities as qualifying shares are not disclosed pursuant to the exception provided in this paragraph, a general statement should nevertheless be made to indicate that the directors hold qualifying shares.

          • 18.16

            A statement as at the end of the relevant financial year, showing the interests or short positions of every person, other than a director or chief executive of the listed issuer, in the shares and underlying shares of the listed issuer as recorded in the register required to be kept under section 336 of the Securities and Futures Ordinance, or if there is no such interests or short positions recorded in the register, a statement of that fact.

            Notes:

            1 For the purposes of rules 18.15 and 18.16, particulars should be given of the extent of any duplication which occurs.
            2 In the case of a PRC issuer, references to director or chief executive in rules 18.15 and 18.16 inclusive shall also mean and include supervisors.

          • 18.17

            Statements disclosing interests and short positions in shares, underlying shares and debentures have to separately refer to three categories of persons, namely, directors and chief executives, substantial shareholders and other persons who are required to disclose their interests. Such statements should describe the capacity in which such interests and short positions are held and the nature of such interests and short positions as disclosed in the prescribed forms required to be used, when giving notice pursuant to sections 324 and 347 of Part XV of the Securities and Futures Ordinance. Where interests or short positions are attributable on account of holdings through corporations that are not wholly-owned by the person making disclosure, the percentage interests held by such person in such corporation should be disclosed.

          • 18.17A

            For directors and chief executives, the statements should show details of the following matters as recorded in the register required to be kept under section 352 of the Securities and Futures Ordinance:

            (1) aggregate long position in shares and (in respect of positions held pursuant to equity derivatives) underlying shares and in debentures of the issuer and its associated corporation(s) showing separately for each entity:
            (a) interests in shares (other than pursuant to equity derivatives such as share options, warrants to subscribe or convertible bonds);
            (b) interests in debentures; and
            (c) interests under equity derivatives showing separately for listed and unlisted equity derivatives, interests in underlying shares of the entity pursuant to:
            (i) physically settled equity derivatives;
            (ii) cash settled equity derivatives;
            (iii) other equity derivatives.

            Notes:
            (1) In the case of issuers and associated corporations, the statements should include the percentage which the aggregate long position in shares represents to the issued voting shares of the issuer or associated corporation.
            (2) A long position arises where a person is a party to an equity derivative, by virtue of which the person:
            (i) has a right to take the underlying shares;
            (ii) is under an obligation to take the underlying shares;
            (iii) has a right to receive money if the price of the underlying shares increases; or
            (iv) has a right to avoid or reduce a loss if the price of the underlying shares increases.
            (3) For (c)(i) above, in respect of options granted to directors or chief executives pursuant to share option schemes under Chapter 23 of the GEM Listing Rules, the statements should show such details as are required to be disclosed under Rule 23.07(1) of the GEM Listing Rules.
            (2) aggregate short position in shares and (in respect of positions held pursuant to, equity derivatives) underlying shares and in debentures of the issuer and its associated corporation(s) showing separately for each entity:
            (a) short positions in respect of shares arising under a stock borrowing and lending agreement; and
            (b) short positions under equity derivatives showing separately for listed and unlisted equity derivatives, interests in underlying shares of the entity pursuant to:
            (i) physically settled equity derivatives;
            (ii) cash settled equity derivatives; and
            (iii) other equity derivatives.

            Notes:
            (1) In the case of issuers or associated corporations, the statements should include the percentage which the aggregate short position in shares represents to the issued voting shares of the issuer or associated corporation.
            (2) A short position arises:
            (i) where the person is the borrower of shares under a securities borrowing and lending agreement, or has an obligation to deliver the underlying shares to another person who has lent shares;
            (ii) where the person is the holder, writer or issuer of any equity derivatives, by virtue of which the person —
            (a) has a right to require another person to take the underlying shares of the equity derivatives;
            (b) is under an obligation to deliver the underlying shares of the equity derivatives to another person;
            (c) has a right to receive from another person money if the price of the underlying shares declines; or
            (d) has a right to avoid a loss if the price of the underlying shares declines.

          • 18.17B

            For substantial shareholders, the statements should show details of the following matters as recorded in the register required to be kept under section 336 of the Securities and Futures Ordinance:

            (1) aggregate long position in the shares and (in respect of positions held pursuant to equity derivatives) underlying shares of the issuer showing separately:
            (a) interests in shares (other than pursuant to equity derivatives such as share options, warrants to subscribe or convertible bonds); and
            (b) interests under equity derivatives showing separately for listed and unlisted equity derivatives, interests in underlying shares of the entity pursuant to:
            (i) physically settled equity derivatives; and
            (ii) cash settled equity derivatives.

            Notes:
            (1) The statements should include the percentage which the aggregate long position in shares represents to the issued voting shares of the issuer.
            (2) A long position arises where a person is a party to an equity derivative, by virtue of which the person:
            (i) has a right to take the underlying shares;
            (ii) is under an obligation to take the underlying shares;
            (iii) has a right to receive money if the price of the underlying shares increases; or
            (iv) has a right to avoid or reduce a loss if the price of the underlying shares increases.
            (3) For (b)(i) above, in respect of options granted to substantial shareholders pursuant to share option schemes under Chapter 23 of the GEM Listing Rules, the statements should show such details as are required to be disclosed under Rule 23.07(1) of the GEM Listing Rules.
            (2) aggregate short position in shares and (in respect of positions held pursuant to equity derivatives) underlying shares of the issuer showing separately:
            (a) short positions in respect of shares arising under a stock borrowing and lending agreement; and
            (b) short positions under equity derivatives showing separately for listed and unlisted equity derivatives, interests in underlying shares of the entity pursuant to:
            (i) physically settled equity derivatives; and
            (ii) cash settled equity derivatives.

            Notes:
            (1) The statements should include the percentage which the aggregate short position in shares represents to the issued voting shares of the issuer.
            (2) A short position arises:
            (i) where the person is the borrower of shares under a securities borrowing and lending agreement, or has an obligation to deliver the underlying shares to another person who has lent shares;
            (ii) where the person is the holder, writer or issuer of any equity derivatives, by virtue of which the person —
            (a) has a right to require another person to take the underlying shares of the equity derivatives;
            (b) is under an obligation to deliver the underlying shares of the equity derivatives to another person;
            (c) has a right to receive from another person money if the price of the underlying shares declines; or
            (d) has a right to avoid a loss if the price of the underlying shares declines.

          • 18.17C

            For other persons whose interests are recorded (or, in the case of a new listing, are required to be recorded) in the register required to be kept under section 336 of the Securities and Futures Ordinance, the statements should show details of the same matters as are required to be disclosed in the case of a substantial shareholder pursuant to Rule 18.17B, except that note (3) to Rule 18.17B(1) does not apply.

          • 18.18

            In the event of trading results shown by the financial statements for the period under review differing materially from any published forecast made by the listed issuer, an explanation for the difference.

          • 18.19

            A statement in the accounting policies section of the financial statements indicating which accounting body's generally accepted accounting principles and standards have been followed in the preparation of the financial statements.

          • 18.20

            A statement as to the reasons for any significant departure from accounting standards adopted by the listed issuer for the preparation of its annual financial statements.

            Note: In this regard, refer to rules 18.04 to 18.06.

          • 18.21

            Except where the listed issuer is a banking company, a statement as at the end of the financial year showing, firstly, bank loans and overdrafts and, secondly, other borrowings of the group, the aggregate amounts repayable:—

            (1) on demand or within a period not exceeding 1 year;
            (2) within a period of more than 1 year but not exceeding 2 years;
            (3) within a period of more than 2 years but not exceeding 5 years; and
            (4) within a period of more than 5 years.

          • 18.22 [Repealed]

            [Repealed 31 December 2015]

          • 18.23

            Where any of the percentage ratios (as defined under rule 19.04(9)) of any properties held for development and/or sale or for investment purposes held by the group exceeds 5%, the following information:

            (1) in the case of property held for development and/or sale:—
            (a) an address sufficient to identify the property, which generally must include the postal address, lot number and such further designation as is registered with the appropriate government authorities in the jurisdiction in which the property is located;
            (b) if in the course of construction, the stage of completion as at the date of the annual report and financial statements;
            (c) if in the course of construction, the expected completion date;
            (d) the existing use (e.g. shops, offices, factories, residential, etc.);
            (e) the site and gross floor area of the property; and
            (f) the percentage interest in the property.
            (2) in the case of property held for investment:—
            (a) an address sufficient to identify the property, which generally must include the postal address, lot number and such further designation as is registered with the appropriate government authorities in the jurisdiction in which the property is located;
            (b) the existing use (e.g. shops, offices, factories, residential, etc.); and
            (c) whether the property is held on short lease, medium term lease or long lease or, if situated outside Hong Kong, is freehold; and
            (3) such other details as may be prescribed or requested from time to time by the Exchange, provided that if, in the opinion of the directors of the listed issuer, the number of the properties is such that compliance with this rule would result in particulars of excessive length being given, compliance with this rule shall not be required except in the case of properties which in the opinion of the directors are material.

          • 18.24

            Statements as to:—

            (1) the unexpired period of any service contract, which is not determinable by the employer within one year without payment of compensation (other than statutory compensation), of any director proposed for re-election at the forthcoming annual general meeting or, if there are no such service contracts, a statement of that fact; and
            Note: In the case of a PRC issuer, reference to director under this paragraph shall also mean and include supervisor.
            (2) the length of the term of appointment of every non-executive director.

          • 18.24A [Repealed]

            [Repealed 1 October 2020]

          • 18.25

            Particulars (nature and extent) of any transaction, arrangement or contract of significance subsisting during or at the end of the financial year in which a director of the listed issuer or an entity connected with a director is or was materially interested, either directly or indirectly, or, if there has been no such transaction, arrangement or contract, a statement of that fact.

            Notes:

            1 In the case of a PRC issuer, reference to director under this paragraph shall also mean and include supervisor.
            2 A "transaction, arrangement or contract of significance" is one where any of the percentage ratios (as defined under 19.04(9)) of the transaction is 1% or more.
            3 An interest in a transaction, arrangement or contract is material for the purposes of disclosure in the financial statements if the omission of information relating to that transaction, arrangement or contract could have changed or influenced the judgement or decision of a person relying on the relevant information.
            4 A reference to an entity connected with a director has the meaning given by section 486 of the Companies Ordinance.

          • 18.26

            Particulars of any contract of significance between the listed issuer, or one of its subsidiary companies, and a controlling shareholder or any of its subsidiaries.

            Note: For the purposes of this rule and rule 18.27, the words "controlling shareholder" mean any shareholder entitled to exercise, or control the exercise of, 30 per cent (or such other amount as may from time to time be specified in the Takeovers Code as being the level for triggering a mandatory general offer) or more of the voting power at general meetings of the listed issuer or one which is in a position to control the composition of a majority of the board of directors of the listed issuer.

          • 18.27

            Particulars of any contract of significance for the provision of services to the listed issuer or any of its subsidiaries by a controlling shareholder or any of its subsidiaries.

            Note: See Note 2 to rule 18.25 and the Note to rule 18.26.

          • 18.28

            Information concerning the emoluments, pension and any compensation arrangements for the directors and past directors of the listed issuer. The information provided pursuant to this rule must include details of directors' and past directors' emoluments, by name as follows:—

            (1) the directors' fees for such financial year;
            (2) the directors' basic salaries, housing allowances, other allowances and benefits in kind;
            (3) the contributions to pension schemes for directors or past directors for such financial year;
            (4) the bonuses paid or receivable by directors which are discretionary or are based on the listed issuer's, the group's or any member of the group's performance (excluding amounts disclosed in (5) and (6) below) for such financial year;
            (5) the amounts paid during such financial year or receivable by directors as an inducement to join or upon joining the listed issuer;
            (6) the compensation paid during such financial year or receivable by directors or past directors for the loss of office as a director of any member of the group or of any other office in connection with the management of the affairs of any member of the group distinguishing between contractual and other payments (excluding amounts disclosed in (2) to (5) above); and
            (7) information on share options held by directors as required under rule 23.07.

            Notes:
            1 In the case of a PRC issuer, references to directors or past directors in this rule shall also mean and include past and present supervisors (as appropriate).
            2 Sub-paragraphs (2) to (6) of this rule require an analysis of the amounts to be disclosed in the issuer's financial statements under the provisions of section 383(1)(a) to (c) inclusive of the Companies Ordinance.
            3 Where a director is contractually entitled to bonus payments which are fixed in amount such payments are more in the nature of basic salary and accordingly must be disclosed under sub-paragraph (2) of this rule.
            4 In addition to discretionary bonus payments, all bonus payments to which a director is contractually entitled and which are not fixed in amount, together with the basis upon which they are determined, must be disclosed under sub-paragraph (4) of this rule.
            5 Where the information provided under sub-paragraphs (1) to (5) of this rule does not disclose the full compensation of a director for the financial year, any outstanding element of compensation must also be disclosed.
            6 References to "director" in this rule include a chief executive who is not a director.

          • 18.29

            A listed issuer shall include particulars of any arrangement under which a director has waived or agreed to waive any emoluments.

            Note: Where a director has agreed to waive future emoluments, particulars of such waiver must be given together with those relating to emoluments which accrued during the past financial year. This applies in respect to emoluments from the listed issuer or any of its subsidiaries or other person.

          • 18.29A

            The following information in respect of the group's emolument policy:

            (1) a general description of the emolument policy and any long-term incentive schemes of the group; and
            (2) the basis of determining the emolument payable to its directors.

          • 18.30

            Additional information in respect of those 5 individuals whose emoluments (excluding amounts paid or payable by way of commissions on sales generated by the individual) were the highest in the listed issuer or the group for the year and details of the increase of each of their emoluments. Where all 5 of these individuals are directors and the information required by this rule has been disclosed in the emoluments of directors, this must be stated and no additional disclosure is required. Where the details of one or more of the individuals whose emoluments were the highest have not been included in the emoluments of directors, the following information must be disclosed:—

            (1) the aggregate of basic salaries, housing allowances, other allowances and benefits in kind for such financial year;
            (2) the aggregate of contributions to pension schemes for the financial year;
            (3) the aggregate of bonuses paid or receivable which are discretionary or are based on the issuer's, the group's or any member of the group's performance (excluding amounts disclosed in (4) and (5) below) for the financial year;
            (4) the aggregate of amounts paid during the financial year or receivable as an inducement to join or upon joining the issuer or the group;
            (5) the aggregate of compensation paid during such financial year or receivable for the loss of any office in connection with the management of the affairs of any member of the group distinguishing between contractual payments and other payments (excluding amounts disclosed in (1) to (3) above); and
            (6) an analysis showing the number of individuals whose remuneration (being amounts paid under (1) to (5) above) fell within bands from HK$nil up to HK$1,000,000 or into higher bands (where the higher limit of the band is an exact multiple of HK$500,000 and the range of the band is HK$499,999).

            Notes:
            1 It is not necessary to disclose the identity of the highest paid individuals, unless any of them are directors of the issuer.
            2 The purpose of these disclosures is to provide shareholders with an indication of the fixed management costs of groups and accordingly employees who are higher paid by virtue of sales commissions are to be omitted from this disclosure.

          • 18.31

            Particulars of any arrangement under which a shareholder has waived or agreed to waive any dividends.

            Note: Where a shareholder has agreed to waive future dividends, particulars of such waiver(s) must be given together with those relating to dividends which were payable during the past financial year. Waivers of dividends of minor amount may be disregarded provided that some payment has been made on each share during the relevant calendar year.

          • 18.32

            In the case of any issue for cash of equity securities (including securities convertible into equity securities):—

            (1) the reasons for making the issue;
            (2) the classes of equity securities issued;
            (3) as regards each class of equity securities, the number issued, their aggregate nominal value, if any;
            (4) the issue price of each security;
            (5) the net price to the listed issuer of each security;
            (6) the names of the allottees, if less than 6 in number, and, in the case of 6 or more allottees, details of such allottees in accordance with rule 10.12(4);
            (7) the market price of the securities concerned on a named date, being the date on which the terms of the issue were fixed; and
            (8) the total funds raised from the issue and details of the use of proceeds including:
            (a) a detailed breakdown and description of the proceeds for each issue and the purposes for which they are used during the financial year;
            (b) if there is any amount not yet utilized, a detailed breakdown and description of the intended use of the proceeds for each issue and the purposes for which they are used and the expected timeline; and
            (c) whether the proceeds were used, or are proposed to be used, according to the intentions previously disclosed by the issuer, and the reasons for any material change or delay in the use of proceeds.
            Note: Issuers are recommended to present the above information in tabular format to show separately the amounts used and the purposes for which they are used, and compare each of the actual or intended uses against the intention and expected timeframe previously disclosed by the issuer.

          • 18.32A

            To the extent that there are proceeds brought forward from any issue of equity securities (including securities convertible into equity securities) made in previous financial year(s), the listed issuer shall disclose the amount of proceeds brought forward and details of the use of such proceeds as set out in rule 18.32.

          • 18.33

            A summary, in the form of a comparative table, of the published results and of the assets and liabilities of the group for the last 5 financial years. Where the published results and statement of assets and liabilities have not been prepared on a consistent basis this must be explained in the summary.

          • 18.34

            An issuer shall include the following information in addition to the information required under the relevant accounting standard in respect of pension schemes:

            (1) a brief outline of how contributions are calculated or benefits funded;
            (2) in the case of defined contribution schemes, details of whether forfeited contributions (by employers on behalf of employees who leave the scheme prior to vesting fully in such contributions) may be used by the employer to reduce the existing level of contributions and if so, the amounts so utilised in the course of the year and available at the date of statement of financial position for such use; and
            (3) in the case of defined benefit plans, an outline of the results of the most recent formal independent actuarial valuation (which should be as at a date not earlier than 3 years prior to the date to which the listed issuer's financial statements are drawn up) or later formal independent review of the scheme on an ongoing basis. This should include disclosure of:—
            (a) the name and qualifications of the actuary, the actuarial method used and a brief description of the main actuarial assumptions;
            (b) the market value of the scheme assets at the date of their valuation or review (unless the assets are administered by an independent trustee in which case this information may be omitted);
            (c) the level of funding expressed in percentage terms; and
            (d) comments on any material surplus or deficiency (including quantification of the deficiency) indicated by (c) above.

          • 18.35

            If the issuer has caused any property interests to be valued (under Chapter 8) or has caused any valuation to be made of any other tangible assets and included such a valuation in the prospectus relating to the initial public offer of shares in the issuer and those assets are not stated at such valuation (or at subsequent valuation) in its first annual financial statements published after listing, then the issuer is required to disclose the following additional information in its first annual report published after listing:—

            (1) the amount of such valuation of those properties or other tangible assets as included in the prospectus; and
            (2) the additional depreciation (if any) that would be charged against the statement of profit or loss and other comprehensive income had those assets been stated at such valuation (or subsequent valuation).

          • 18.36 [Repealed]

            [Repealed 31 December 2015]

          • 18.37

            A statement of the reserves available for distribution to shareholders by the listed issuer (as calculated under the provisions of sections 291, 297 and 299 of the Companies Ordinance) as at the date of its statement of financial position.

      • [Repealed]

        [Repealed 31 December 2015]

        • 18.37A [Repealed]

          [Repealed 31 December 2015]

        • 18.37B [Repealed]

          [Repealed 31 December 2015]

      • [Repealed]

        [Repealed 31 December 2015]

        • 18.38 [Repealed]

          [Repealed 31 December 2015]

        • 18.39

          Brief biographical details in respect of the directors and senior managers of the listed issuer. Such details will include name, age, positions held with the listed issuer and other members of the listed issuer's group, length of service with the listed issuer and the group and such other information (which may include business experience) of which shareholders should be aware, pertaining to the ability or integrity of such persons (which would include, without limitation, full particulars of any public sanctions made against them by statutory or regulatory authorities). Where a director has any former name or alias, such information should also be disclosed. Where any of the directors or senior managers are related, having with any other director or senior manager any one of the relationships set out below, that fact should be stated. The relationships are spouse; any person cohabiting with the director or senior manager as a spouse; and any relative meaning a child or step-child regardless of age, a parent or step-parent, a brother, sister, step-brother or step-sister, a mother-in-law, a father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law. Where any director of the listed issuer is a director or employee of a company which has an interest in the share capital of the listed issuer which would fall to be disclosed to the listed issuer under the provisions in Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance, that fact shall be stated.
           
          It is the responsibility of the directors of the listed issuer to determine which individual or individuals constitute senior management. Senior management may include directors of subsidiaries; heads of divisions, departments or other operating units within the group as, in the opinion of the listed issuer's directors, is appropriate.
           
          Note: In the case of a PRC issuer, references to directors and senior managers in this paragraph shall also mean and include supervisors.
           

        • 18.39A

          In relation to an independent non-executive director appointed by a listed issuer during the financial year, the listed issuer shall disclose the reasons why such an independent nonexecutive director was and is considered to be independent if he has failed to meet any of the independence guidelines set out in rule 5.09.

        • 18.39B

          A listed issuer must confirm whether it has received from each of its independent non-executive directors an annual confirmation of his independence pursuant to rule 5.09 and whether it still considers the independent non-executive directors to be independent.

        • 18.40

          Additional information in respect of major customers (meaning, other than in relation to consumer goods or services, the ultimate customer, and in relation to consumer goods or services the ultimate wholesaler or retailer as the case may be) and suppliers (meaning the ultimate supplier of items which are not of a capital nature) as follows:—

          (1) a statement of the percentage of purchases attributable to the group's largest supplier;
          (2) a statement of the percentage of purchases attributable to the group's 5 largest suppliers combined;
          (3) a statement of the percentage of revenue from sales of goods or rendering of services attributable to the group's largest customer;
          (4) a statement of the percentage of revenue from sales of goods or rendering of services attributable to the group's 5 largest customers combined;
          (5) a statement of the interests of any of the directors; their close associates; or any shareholder (which to the knowledge of the directors own more than 5% of the number of issued shares of the listed issuer) in the suppliers or customers disclosed under (1) to (4) above or if there are no such interests a statement to that effect;
          (6) in the event that the percentage which would fall to be disclosed under (2) above is less than 30, a statement of that fact shall be given and the information required in (1), (2) and (5) (in respect of suppliers) may be omitted; and
          (7) in the event that the percentage which would fall to be disclosed under (4) above is less than 30, a statement of that fact shall be given and the information required in (3), (4) and (5) (in respect of customers) may be omitted.

          Notes:
          1 Rule 18.40 applies to all listed issuers whose businesses comprise, in whole or in part, the supply of goods or services of whatever nature, and in the case of service references to customers includes the clients of such listed issuers.
          2 In relation to consumer goods, references to customers are to the ultimate wholesaler or retailer, except when the listed issuer's business incorporates the wholesaling or retailing operation. In all other cases references to customers are to ultimate customer.
          3 References to suppliers are primarily to those who provide goods or services which are specific to a listed issuer's business and which are required on a regular basis to enable the listed issuer to continue to supply or service its customers. Suppliers of goods and services which are freely available from a range of suppliers at similar prices or which are otherwise freely available (such as utilities) are excluded. In particular, it is recognised that an obligation on listed issuers who are providers of financial services (such as banks and insurance companies) to give information about suppliers would be of limited or no value, and there is therefore no disclosure requirement in respect of suppliers to such listed issuers.
          4 The Exchange must be consulted if there is any doubt about the application of rule 18.40.

        • 18.41

          A discussion and analysis of the group's performance during the year and the material factors underlying its results and financial position. It should emphasise trends and identify significant events or transactions during the year under review. As a minimum the directors of the listed issuer should comment on the following:—

          (1) the group's liquidity and financial resources. This may include comments on the level of borrowings at the end of the period under review, the seasonality of borrowing requirements, and the maturity profile of borrowings and committed borrowing facilities. Reference may also be made to the funding requirements for capital expenditure commitments and authorisations;
          (2) the capital structure of the group in terms of maturity profile of debt, type of capital instruments used, currency and interest rate structure. The discussion may cover funding and treasury policies and objectives in terms of the manner in which treasury activities are controlled; the currencies in which borrowings are made and in which cash and cash equivalents are held; the extent to which borrowings are at fixed interest rates; the use of financial instruments for hedging purposes; and the extent to which foreign currency net investments are hedged by currency borrowings and other hedging instruments;
          (3) the state of the group's order book (where applicable) and prospects for new business including new products and services introduced or announced;
          (4) significant investments held, their performance during the year and their future prospects;
          (4A) a breakdown of its significant investments (including any investment in an investee company with a value of 5 per cent. or more of the issuer's total assets as at the year end date):
          (a) details of each investment, including the name and principal businesses of the underlying company, the number and percentage of shares held and the investment costs;
          (b) the fair value of each investment as at the year end date and its size relative to the issuer's total assets;
          (c) the performance of each investment during the year, including any realised and unrealised gain or loss and any dividends received; and
          (d) a discussion of the issuer's investment strategy for these significant investments;
          (5) details of material acquisitions and disposals of subsidiaries, associates and joint ventures in the course of the year;
          (6) comments on segmental information. This may cover changes in the industry segment, developments within the segment and their effect on the results of that segment. It may also include changes in the market conditions, new products and services introduced or announced and their impact on the group's performance and changes in revenue and margins;
          (7) where applicable, details of the number and remuneration of employees, remuneration policies, bonus and share option schemes and training schemes;
          (8) details of charges on group assets;
          (9) details of future plans for material investments or capital assets and their expected sources of funding in the coming year;
          (10) gearing ratio;
          (11) exposure to fluctuations in exchange rates and any related hedges; and
          (12) details of contingent liabilities, if any.

          Notes:
          1 It is the responsibility of the directors of the listed issuer to determine what investment or capital asset is material in the context of the listed issuer's business, operations and financial performance. The materiality of investment or capital asset varies from one listed issuer to another according to its financial performance, assets and capitalisation, the nature of its operations and other factors. An event that is "material" in the context of a smaller listed issuer's business and affairs is often not material to a larger listed issuer. The directors of the listed issuer are in the best position to determine materiality. The Exchange recognises that decisions on disclosure require careful subjective judgements, and encourages listed issuers to consult the Exchange when in doubt as to whether disclosure should be made.
          2 The basis on which the gearing ratio is computed should be disclosed.
          3 If the above information required in this rule has been disclosed in a business review in the directors' report as set out in rule 18.07A, no additional disclosure is required.

        • 18.42

          A statement of any change in auditors of the listed issuer in any of the preceding 3 years.

        • 18.43 [Repealed]

          [Repealed 1 July 2008]

        • 18.44

          The following information in respect of an issuer:—

          (1) the full name and professional qualifications (if any) of:—
          (a) the company secretary of the issuer; and
          (b) the compliance officer of the issuer appointed pursuant to rule 5.19; and
          (2) a separate Corporate Governance Report prepared by the board on its corporate governance practices. The report must, as a minimum, contain the information required under paragraphs G to Q of Appendix 15 regarding the accounting period covered by the annual report. To the extent that it is reasonable and appropriate, the issuer may incorporate by reference information in its annual report into the Corporate Governance Report. Any such references must be clear and unambiguous and the Corporate Governance Report must not contain only a cross-reference without any discussion of the matter.

        • 18.45

          Information as to the interests (if any) of the Compliance Adviser and its directors, employees and close associates, as notified to the issuer pursuant to rule 6A.32 and all directors and controlling shareholders of the issuer and their respective close associates as referred to in rule 11.04.

        • 18.46

          In respect of PRC properties where long term title certificates are not obtained by the issuer, any property revaluation surplus arising from those PRC properties must be excluded from the issuer's annual financial statements.

        • 18.47

          If the relevant annual financial statements do not give a true and fair view of the state of affairs and profit or loss and cash flow of the listed issuer or group, more detailed and/or additional information must be provided.

          Note: If listed issuers are in doubt as to what more detailed and/or additional information should be provided, they should apply to the Exchange for guidance.

        • [Repealed]

          [Repealed 31 December 2015]

          • 18.48 [Repealed]

            [Repealed 31 December 2015]

      • Obligation to publish

        • 18.48A

          A listed issuer must publish (in accordance with the requirements of Chapter 16) its annual report, in respect of each financial year of the listed issuer, not later than 3 months after the date upon which the financial year ended.

      • Preliminary announcement of results for the financial year

        • Preliminary (18.49)

          • 18.49

            A listed issuer must publish (in accordance with the requirements of Chapter 16) a preliminary announcement of the results for the financial year, which has been agreed with its auditors, on the GEM website as soon as possible, but in any event not later than the time that is 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the next business day after approval by or on behalf of the board of its results. The issuer must publish such results not later than 3 months after the date upon which the financial year ended.
             
            Notes:    1    The term financial year refers to the period covered by a listed issuer’s financial statements even where the period is not a calendar year.
             
              2    Newly listed issuers will be required to prepare and publish the relevant annual results (irrespective of whether the period in question ends on a date before or after the date on which dealings in the securities of the listed issuer commenced) where the 3-month deadline for publishing the results falls after the date on which dealings in the securities of the listed issuer commenced. The requirements under rule 18.49 are not applicable to the reporting period which ended immediately before the listing of a newly listed issuer if the following is disclosed in its listing document:—
             
            (a)    the financial information required under Chapter 18 in relation to annual results announcements, in respect of such reporting period; and
             
            (b)    that it will not breach its constitutional documents, laws and regulations of its place of incorporation or other regulatory requirements as a result of not publishing such annual results announcements.

            Such a newly listed issuer should publish an announcement no later than the time prescribed in rule 18.49 that the relevant financial information has been included in its listing document.

        • Content of preliminary announcement (18.50-18.51)

          • 18.50

            The preliminary announcement of results for the financial year must contain at least the following information in respect of the group:

            (1) the information in respect of the statement of financial position and the statement of profit or loss and other comprehensive income as set out in rule 18.50B comprising a statement of profit or loss and other comprehensive income for the financial year, with comparative figures for the immediately preceding financial year, and statement of financial position as at the end of the financial year, with comparative figures as at the end of the immediately preceding financial year. The listed issuer must include the notes relating to revenue, taxation, earnings per share, dividends and any other notes that the directors consider necessary for a reasonable appreciation of the results for the year. Directors of the listed issuer must ensure that the information contained in the preliminary announcement of results is consistent with the information that will be contained in the annual reports (see rule 18.50A);

            Note: [Repealed 31 December 2015]
            (2) a commentary covering the following:
            (a) a fair review of the development of the business of the listed issuer and its subsidiaries during the financial year and of their financial position at the end of the year;
            (b) details of important events affecting the listed issuer and its subsidiaries which have occurred since the end of the financial year; and
            (c) an indication of likely future developments in the business of the listed issuer and its subsidiaries;
            (3) [Repealed 31 December 2015]
            (4) particulars of any purchase, sale or redemption by the listed issuer or any of its subsidiaries, of its listed securities during the financial year, or an appropriate negative statement;
            (5) any supplementary information which in the opinion of the directors of the listed issuer is necessary for a reasonable appreciation of the results for the relevant year;
            (6) a statement as to whether the listed issuer meets the code provisions set out in the Corporate Governance Code contained in Appendix 15. The listed issuer must also disclose any deviations from the code provisions and considered reasons for such deviations. To the extent that it is reasonable and appropriate, such information may be given by reference to the immediately preceding half-year report or to the Corporate Governance Report in the immediately preceding annual report, and summarising any changes since that report. Any such references must be clear and unambiguous;
            (7) a statement as to whether the annual results have been reviewed by the audit committee of the listed issuer;
            (8) where the auditors are likely to issue a modified report on the listed issuer's annual financial statements, details of the modification;
            (9) where there are any significant changes in accounting policies, a statement to that fact must be made; and
            Note: A listed issuer should apply the accounting policies consistently except where the change in accounting policy is required by an accounting standard which came into effect during the financial year.
            (10) where there are prior period adjustments due to correction of material errors, a statement of that fact must be made.
            Note: The term financial year refers to the period covered by a listed issuer's financial statements even where the period is not a calendar year.

          • 18.50A

            Where, in exceptional circumstances, it becomes necessary to revise the information contained in the listed issuer's preliminary announcement of results in the light of developments arising between the date of publication of the announcement and the completion of the audit, the listed issuer must immediately notify the Exchange and publish an announcement to inform the public. The announcement must provide details of the changes made to the published preliminary announcement of results including any impact on the published financial information of the listed issuer and the reasons for such changes.

            Note: The Exchange does not expect there to be any material or substantial difference between the information contained in the listed issuer's preliminary announcement of results and that contained in its audited results.

          • 18.50B

            The preliminary announcements of results for the half-year, preliminary announcements of results for the financial year, half-year reports and annual reports of a listed issuer must include the disclosures required under the relevant accounting standards adopted and contain the information set out below in respect of the group. This information may be included in the notes to the financial statements. In the case of banking companies, the information on results and financial position set out in the Guideline on the Application of the Banking (Disclosure) Rules issued by the Hong Kong Monetary Authority must be provided in place of that set out in rules 18.50B(1) and 18.50B(2).

            (1) Statement of profit or loss and other comprehensive income
            (a) profit (or loss) on sale of properties;
            (2) Statement of financial position, if applicable:
            (a) ageing analysis of accounts receivable; and
            (b) ageing analysis of accounts payable;
            Note: The ageing analysis should normally be presented on the basis of the date of the relevant invoice or demand note and categorised into time-bands based on analysis used by an issuer's management to monitor the issuer's financial position. The basis on which the ageing analysis is presented should be disclosed.
            (3) Dividends

            Rates of dividend paid or proposed on each class of shares (with particulars of each such class) and amounts absorbed thereby (or an appropriate negative statement).

            Notes:
            1 Where the items of information specified in this rule are unsuited to the listed issuer's activities, appropriate adaptations should be made. Where the requirements of this rule are unsuited to the listed issuer's activities or circumstances, the Exchange may require suitable adaptations to be made.
            2 The Exchange may authorise the omission from the preliminary announcement of any information if it considers:—
            (a) such omission to be necessary or appropriate; or
            (b) disclosure of such information would be contrary to the public interest or seriously detrimental to the issuer,

            provided that such omission would not be likely to mislead the public with regard to facts and circumstances, knowledge of which is essential for the assessment of the securities in question.
            3 The issuer or its representatives will be responsible for the correctness and relevance of the facts on which any application for an exemption under Note 2 above is based.

          • 18.50C

            Listed issuer must submit a copy of its annual report to the Exchange for publication on the GEM website as soon as reasonably practicable after the approval by or on behalf of the board of its audited financial statements and in any event not more than 3 months after the date upon which the financial year ended.

          • 18.51 [Repealed]

            [Repealed 1 March 2019]

        • [Repealed]

          [Repealed 31 December 2015]

          • 18.52 [Repealed]

            [Repealed 31 December 2015]

      • Half-year reports

        • Obligation to prepare and publish (18.53-18.54)

          • 18.53

            The listed issuer shall prepare, in respect of each of the first 6 months of each financial year of the listed issuer, either (i) a half-year report, or (ii) a summary half-year report containing at least the information required by rules 18.55 and 18.82, respectively and publish the same (in accordance with the requirements of Chapter 16) not later than 45 days after the end of such period. The listed issuer may send a copy of its summary half-year report to a member and a holder of its listed securities in place of a copy of its half-year report, provided that such summary half-year report complies with the relevant provisions of the Companies (Summary Financial Reports) Regulation governing summary financial reports.
             
            Notes:    1    Newly listed issuers will be required to prepare and publish the relevant half-year report or summary half-year report (irrespective of whether the period in question ends on a date before or after the date on which dealings in the securities of the listed issuer commenced) where the 45-day deadline for publishing the report falls after the date on which dealings in the securities of the listed issuer commenced. The requirements under rules 18.53 and 18.54 are not applicable to the half-year period which ended immediately before the listing of a newly listed issuer if the following is disclosed in its listing document:—
             
            (a)   the financial information required under Chapter 18 in relation to half-year reports, in respect of such six-month period (with comparative figures for the corresponding six-month period of the immediately preceding financial year);
             
            (b)   a statement as to whether it complies with the Corporate Governance Code in Appendix 15 and, if not, the reason for deviation; and
             
            (c)   that it will not breach its constitutional documents, laws and regulations of its place of incorporation or other regulatory requirements as a result of not distributing such half-year reports.
             
            Such a newly listed issuer should publish an announcement no later than the time prescribed in rules 18.53 and 18.54 that the relevant financial information has been included in its listing document.
             
              2    The figures in each half-year report and summary half-year report are the sole responsibility of the directors and they must ensure that the accounting policies applied to the figures are consistent with those applied to annual financial statements. If a change in the financial year is proposed, the Exchange should be consulted as to the period or periods to be covered by the half-year reports or summary half-year reports.

          • 18.54

            As soon as reasonably practicable after publishing any half-year report and, where applicable, summary half-year report, the listed issuer must send a copy of it to the persons specified in rule 18.03.

            Note: [Repealed 1 January 2011]

        • Content of half-year reports (18.55-18.64)

          • 18.55

            Each half-year report shall contain the disclosures required under the relevant accounting standards adopted and the information set out below.

            (1) [Repealed 31 December 2015]
            (2) [Repealed 31 December 2015]
            (3) particulars of any purchase, sale or redemption by the listed issuer or any of its subsidiaries, of its listed securities during the relevant period, or an appropriate negative statement;
            (4) a statement in relation to the accounting period covered by the half-year report on whether the listed issuer meets the code provisions set out in the Corporate Governance Code contained in Appendix 15. Where there are any deviations from the code provisions in the Code, the listed issuer must also give considered reasons for the deviations from the code provisions, either by:
            (a) giving considered reasons for each deviation; or
            (b) to the extent that it is reasonable and appropriate, by referring to the Corporate Governance Report in the immediately preceding annual report and providing details of any changes together with considered reasons for any deviation not reported in that annual report. Any such references must be clear and unambiguous and the half-year report must not only contain a cross-reference without any discussion of the matter;
            (5) in respect of the required standard of dealings set out in rules 5.48 to 5.67, a statement in relation to the accounting period covered by the half-year report as to:
            (a) whether the listed issuer has adopted a code of conduct regarding directors' securities transactions on terms no less exacting than the required standard of dealings;
            (b) having made specific enquiry of all directors, whether its directors have complied with, or whether there has been any non-compliance with, the required standard of dealings and its code of conduct regarding directors' securities transactions; and
            (c) in the event of any non-compliance with the required standard of dealings, details of such non-compliance and an explanation of the remedial steps taken by the listed issuer to address such non-compliance;
            (6) details of non-compliance (if any) with rules 5.05(1) and 5.05(2) and an explanation of the remedial steps taken by the listed issuer to address such non-compliance relating to appointment of a sufficient number of independent non-executive directors and an independent non-executive director with appropriate professional qualifications, or accounting or related financial management expertise, respectively; and
            (7) details of non-compliance with rule 5.28 (if any) and an explanation of the remedial steps taken by the listed issuer to address such non-compliance relating to establishment of an audit committee;
            (8) the information set out in rule 18.50B; and
            (9) the further information set out in rules 18.56 to 18.64.

            Notes:
            1 An issuer should comply with the relevant standard on interim reporting in respect of its half-year reports in accordance with the requirements under HKFRS, IFRS, US GAAP or CASBE which is adopted for the preparation of its annual financial statements.
            2 Each half-year report must be reviewed by the issuer's audit committee. In the event that the audit committee disagreed with an accounting treatment which had been adopted in the preparation of the group's half-year report, full details of such disagreement should be disclosed together with a quantification of the financial effect arising from the disagreement. Where it is not possible to quantify the effect of the disagreement, or the effect is not significant, a statement to this effect should be made.
            3 If a change in the financial year is proposed, the Exchange should be consulted as to the period or periods to be covered by the half-year reports.
            4 [Repealed 31 December 2015]
            5 A listed issuer should apply the same accounting policies in its interim financial statements as are applied in its annual financial statements except where the change in accounting policy is required by an accounting standard which came into effect during the interim period. Accounting policies which have been consistently applied and which were disclosed in the listed issuer's most recent published audited financial statements or for a newly listed issuer in its recent prospectus may be omitted from the half-year reports. Any significant changes in the accounting policies, including those required by an accounting standard, should be disclosed together with the reason for changing in the accounting policy.
            6 Where the items of information specified in this rule are unsuited to the listed issuer's activities, appropriate adaptations should be made. Where the requirements of this rule are unsuited to the listed issuer's activities or circumstances, the Exchange may require suitable adaptations to be made.
            7 The Exchange may authorise the omission from an interim report of specified items of information if it considers:—
            (a) such omission to be necessary or appropriate; or
            (b) disclosure of such information would be contrary to the public interest or seriously detrimental to the issuer,

            provided that such omission would not be likely to mislead the public with regard to facts and circumstances, knowledge of which is essential for the assessment of the securities in question.
            8 The issuer or its representatives will be responsible for the correctness and relevance of the facts on which any application for an exemption under Note 7 above is based.
            9 Each half-year report must contain, at a prominent position, and in bold type, a statement about the characteristics of GEM, in the form set out in rule 2.20.
            10 A half-year report shall contain the following information required under other parts of the Listing Rules:
            (a) advance to an entity under rule 17.22;
            (b) pledging of shares by the controlling shareholder under rule 17.23;
            (c) loan agreements with covenants relating to specific performance of the controlling shareholder under rule 17.23;
            (d) breach of loan agreement by an issuer under rule 17.23;
            (e) financial assistance and guarantees to affiliated companies of an issuer under rule 17.24;
            (f) provision of information in respect of and by directors, supervisors and chief executives under rule 17.50A(1);
            (g) for a Mineral Company, continuing disclosure obligation arises under 18A.14; and
            (h) share option schemes under rules 23.07 and 23.08.

          • 18.55A

            A listed issuer shall include in its interim report the information in relation to any issue for cash of equity securities (including securities convertible into equity securities) during the interim period as set out in rule 18.32, and where applicable, the information required under rule 18.32A.

          • 18.56

            (1) Subject to rule 18.56(2), a statement as at the end of the relevant period showing the interests and short positions of each director and chief executive of the listed issuer in the shares, underlying shares and debentures of the listed issuer or any associated corporation (within the meaning of Part XV of the Securities and Futures Ordinance):
            (a) as recorded in the register required to be kept under section 352 of the Securities and Futures Ordinance; or
            (b) as otherwise notified to the listed issuer and the Exchange pursuant to the required standard of dealings by directors of listed issuer as referred to in rule 5.46 (which for purposes of this sub-paragraph shall be deemed to apply to the PRC issuer's supervisors to the same extent as it applies to directors); or
            (c) if there is no such interests and short positions, a statement of that fact,

            provided that the Exchange may agree, in its sole discretion, that compliance with this sub-paragraph may be modified or waived in respect of any associated corporation if, in the opinion of the Exchange, the number of associated corporations in respect of which each director and chief executive is taken or deemed to have an interest under Part XV of the Securities and Futures Ordinance is such that compliance with this sub-paragraph would result in particulars being given which are not material in the context of the group and are of excessive length.
            (2) The information required to be included by virtue of rule 18.56(1) must specify the company in which interests or short positions are held, the class to which those securities belong and the number of such securities held, but need not disclose:
            (a) the interests of a director or a chief executive officer in the shares of the listed issuer or any of its subsidiaries if such interest is held solely in a non-beneficial capacity and is for the purpose of holding the requisite qualifying shares; or
            (b) the non-beneficial interests of directors or chief executive officers in the shares of any subsidiary of the listed issuer in so far as that interest comprises the holding of shares subject to the terms of a written, valid and legally enforceable declaration of trust in favour of the parent company of that subsidiary or the listed issuer and such interest is held solely for the purpose of ensuring that the relevant subsidiary has more than one member.

            Note: Where interests in securities arising from the holding of such securities as qualifying shares are not disclosed pursuant to the exception provided in this paragraph, a general statement should nevertheless be made to indicate that the directors hold qualifying shares.

          • 18.57

            A statement as at the end of the relevant period showing the interests and short positions of every person, other than a director or chief executive of the listed issuer, in the shares and underlying shares of the listed issuer as recorded in the register required to be kept under section 336 of the Securities and Futures Ordinance, or if there is no such interests or short positions recorded in the register, a statement of that fact.

            Notes:

            1 For the purposes of rules 18.56 and 18.57, particulars should be given of the extent of any duplication which occurs.
            2 In the case of a PRC issuer, references to director or chief executive in rules 18.56 and 18.57 inclusive shall also mean and include supervisors.

          • 18.58

            Statements disclosing interests and short positions in shares, underlying shares and debentures have to separately refer to three categories of persons, namely, directors and chief executives, substantial shareholders and other persons who are required to disclose their interests. Such statements should describe the capacity in which such interests and short positions are held and the nature of such interests and short positions as disclosed in the prescribed forms required to be used, when giving notice pursuant to sections 324 and 347 of Part XV of the Securities and Futures Ordinance. Where interests or short positions are attributable on account of holdings through corporations that are not wholly-owned by the person making disclosure, the percentage interests held by such person in such corporations should be disclosed.

          • 18.58A

            For directors and chief executives, the statements should show details of the following matters as recorded in the register required to be kept under section 352 of the Securities and Futures Ordinance:

            (1) aggregate long position in shares and (in respect of positions held pursuant to equity derivatives) underlying shares and in debentures of the issuer and its associated corporation(s) showing separately for each entity:
            (a) interests in shares (other than pursuant to equity derivatives such as share options, warrants to subscribe or convertible bonds);
            (b) interests in debentures; and
            (c) interests under equity derivatives showing separately for listed and unlisted equity derivatives, interests in underlying shares of the entity pursuant to:
            (i) physically settled equity derivatives;
            (ii) cash settled equity derivatives;
            (iii) other equity derivatives.

            Notes:
            (1) In the case of issuers and associated corporations, the statements should include the percentage which the aggregate long position in shares represents to the issued voting shares of the issuer or associated corporation.
            (2) A long position arises where a person is a party to an equity derivative, by virtue of which the person:
            (i) has a right to take the underlying shares;
            (ii) is under an obligation to take the underlying shares;
            (iii) has a right to receive money if the price of the underlying shares increases; or
            (iv) has a right to avoid or reduce a loss if the price of the underlying shares increases.
            (3) For (c)(i) above, in respect of options granted to directors or chief executives pursuant to share option schemes under Chapter 23 of the GEM Listing Rules, the statements should show such details as are required to be disclosed under Rule 23.07(1) of the GEM Listing Rules.
            (2) aggregate short position in shares and (in respect of positions held pursuant to equity derivatives) underlying shares and in debentures of the issuer and its associated corporation(s) showing separately for each entity:
            (a) short positions in respect of shares arising under a stock borrowing and lending agreement; and
            (b) short positions under equity derivatives showing separately for listed and unlisted equity derivatives, interests in underlying shares of the entity pursuant to:
            (i) physically settled equity derivatives;
            (ii) cash settled equity derivatives; and
            (iii) other equity derivatives.

            Notes:
            (1) In the case of issuers or associated corporations, the statements should include the percentage which the aggregate short position in shares represents to the issued voting shares of the issuer or associated corporation.
            (2) A short position arises:
            (i) where the person is the borrower of shares under a securities borrowing and lending agreement, or has an obligation to deliver the underlying shares to another person who has lent shares;
            (ii) where the person is the holder, writer or issuer of any equity derivatives, by virtue of which the person—
            (a) has a right to require another person to take the underlying shares of the equity derivatives;
            (b) is under an obligation to deliver the underlying shares of the equity derivatives to another person;
            (c) has a right to receive from another person money if the price of the underlying shares declines; or
            (d) has a right to avoid a loss if the price of the underlying shares declines.

          • 18.58B

            For substantial shareholders, the statements should show details of the following matters as recorded in the register required to be kept under section 336 of the Securities and Futures Ordinance:

            (1) aggregate long position in the shares and (in respect of positions held pursuant to equity derivatives) underlying shares of the issuer showing separately:
            (a) interests in shares (other than pursuant to equity derivatives such as share options, warrants to subscribe or convertible bonds); and
            (b) interests under equity derivatives showing separately for listed and unlisted equity derivatives, interests in underlying shares of the entity pursuant to:
            (i) physically settled equity derivatives; and
            (ii) cash settled equity derivatives.

            Notes:
            (1) The statements should include the percentage which the aggregate long position in shares represents to the issued voting shares of the issuer.
            (2) A long position arises where a person is a party to an equity derivative, by virtue of which the person:
            (i) has a right to take the underlying shares;
            (ii) is under an obligation to take the underlying shares;
            (iii) has a right to receive money if the price of the underlying shares increases; or
            (iv) has a right to avoid or reduce a loss if the price of the underlying shares increases.
            (3) For (b)(i) above, in respect of options granted to substantial shareholders pursuant to share option schemes under Chapter 23 of the GEM Listing Rules, the statements should show such details as are required to be disclosed under Rule 23.07(1) of the GEM Listing Rules.
            (2) aggregate short position in shares and (in respect of positions held pursuant to equity derivatives) underlying shares of the issuer showing separately:
            (a) short positions in respect of shares arising under a stock borrowing and lending agreement; and
            (b) short positions under equity derivatives showing separately for listed and unlisted equity derivatives, interests in underlying shares of the entity pursuant to:
            (i) physically settled equity derivatives; and
            (ii) cash settled equity derivatives.

            Notes:
            (1) The statements should include the percentage which the aggregate short position in shares represents to the issued voting shares of the issuer.
            (2) A short position arises:
            (i) where the person is the borrower of shares under a securities borrowing and lending agreement, or has an obligation to deliver the underlying shares to another person who has lent shares;
            (ii) where the person is the holder, writer or issuer of any equity derivatives, by virtue of which the person—
            (a) has a right to require another person to take the underlying shares of the equity derivatives;
            (b) is under an obligation to deliver the underlying shares of the equity derivatives to another person;
            (c) has a right to receive from another person money if the price of the underlying shares declines; or
            (d) has a right to avoid a loss if the price of the underlying shares declines.

          • 18.58C

            For other persons whose interests are recorded (or, in the case of a new listing, are required to be recorded) in the register required to be kept under section 336 of the Securities and Futures Ordinance, the statements should show details of the same matters as are required to be disclosed in the case of a substantial shareholder pursuant to Rule 18.58B, except that note (3) to Rule 18.58B(1) does not apply.

          • 18.59

            The listed issuer should include a discussion and analysis of its performance covering all those matters set out in rule 18.41. The discussion should include any significant information needed for investors to make an informed assessment of the trend of its activities and profit (or loss). It should identify and explain any special factors which has influenced its activities and its profit (or loss) during the relevant period. It should provide a comparison with the corresponding period of the preceding financial year and must also, as far as possible, give an indication of the listed issuer's prospects for the current financial year. Such discussion may focus only on the significant changes in the group's performance since the most recent published annual report. Where the current information in relation to those matters set out in rule 18.41 has not changed materially from the information disclosed in the most recent published annual report, a statement to this effect may be made and no additional disclosure is required.

          • 18.60 [Repealed]

            [Repealed 31 December 2015]

          • 18.61

            Any supplementary information which in the opinion of the directors of the listed issuer is necessary for a reasonable appreciation of the results for the relevant period.

          • 18.62 [Repealed]

            [Repealed 1 July 2008]

          • 18.63

            Information as to the interests (if any) of the Compliance Adviser and its directors, employees and close associates, as notified to the issuer pursuant to rule 6A.32 and all directors and controlling shareholders of the issuer and their respective close associates as referred to in rule 11.04.

          • 18.64

            Each half-year report must state whether or not the information provided therein has been audited (and if so, must set out a copy of the auditors’ report thereon). In the event that any auditors’ report thereon (if any) is a modified report, details of such modification must be set out in the half-year report.

        • [Repealed]

          [Repealed 31 December 2015]

          • 18.65 [Repealed]

            [Repealed 31 December 2015]

      • Quarterly reports

        • Obligation to prepare and publish (18.66-18.67)

          • 18.66

            The listed issuer shall prepare, in respect of each of the first 3 and 9 month periods of each financial year of the listed issuer, a quarterly report containing at least the information required by rule 18.68 and publish the same (in accordance with the requirements of Chapter 16) not later than 45 days after the end of such period.
             
            Notes:    1    Newly listed issuers will be required to prepare and publish the relevant quarterly report (irrespective of whether the period in question ends on a date before or after the date on which dealings in the securities of the listed issuer commenced) where the 45-day deadline for publishing the report falls after the date on which dealings in the securities of the listed issuer commenced. The requirements under rules 18.66 and 18.67 are not applicable to the 3-month or 9-month period which ended immediately before the listing of a newly listed issuer if the following is disclosed in its listing document:—
             
            (a)    the financial information required under Chapter 18 in relation to quarterly reports, in respect of such 3-month or 9-month period (with comparative figures for the corresponding 3-month or 9-month period of the immediately preceding financial year);
             
            (b)    a statement as to whether it complies with the Corporate Governance Code in Appendix 15 and, if not, the reason for deviation; and
             
            (c)    that it will not breach its constitutional documents, laws and regulations of its place of incorporation or other regulatory requirements as a result of not distributing such quarterly reports.
             
            Such a newly listed issuer should publish an announcement no later than the time prescribed in rules 18.66 and 18.67 that the relevant financial information has been included in its listing document.
             
              2    The figures in each quarterly report are the sole responsibility of the directors and they must ensure that the accounting policies applied to the figures are consistent with those applied to annual financial statements. If a change in the financial year is proposed, the Exchange should be consulted as to the period or periods to be covered by the quarterly reports.

          • 18.67

            As soon as reasonably practicable after publishing any quarterly report, the listed issuer must send a copy of it to the persons specified in rule 18.03.

            Note: [Repealed 1 January 2011]

        • Content of quarterly reports (18.68-18.76)

          • 18.68

            Each quarterly report shall contain at least the following information in respect of the group:—

            (1) the information set out in rule 18.79; and
            (2) the further information set out in rules 18.69 to 18.76 below.

            Notes:
            1 Where the items of information specified in this rule are unsuited to the listed issuer's activities, appropriate adjustments should be made. Where the requirements of this Note are unsuited to the listed issuer's activities or circumstances, the Exchange may require suitable adaptations to be made.
            2 The Exchange may authorise the omission from a quarterly report of specified items of information if it considers:—
            (a) such omission to be necessary or appropriate; or
            (b) disclosure of such information would be contrary to the public interest or seriously detrimental to the issuer,

            provided that such omission would not be likely to mislead the public with regard to facts and circumstances, knowledge of which is essential for the assessment of the securities in question.
            3 The issuer or its representatives will be responsible for the correctness and relevance of the facts on which any application for an exemption under Note 2 above is based.
            4 Each quarterly report must contain, at a prominent position, and in bold type, a statement about the characteristics of GEM, in the form set out in rule 2.20.
            5 Each quarterly report must be reviewed by the issuer's audit committee.
            6 A quarterly report shall contain the following information required under other parts of the Listing Rules:
            (a) advance to an entity under rule 17.22;
            (b) pledging of shares by the controlling shareholder under rule 17.23;
            (c) loan agreements with covenants relating to specific performance of the controlling shareholder under rule 17.23;
            (d) breach of loan agreement by an issuer under rule 17.23; and
            (e) financial assistance and guarantees to affiliated companies of an issuer under rule 17.24;

          • 18.69

            (1) Subject to rule 18.69(2), a statement as at the end of the relevant period showing the interests and short positions of each director and chief executive of the listed issuer in the shares, underlying shares and debentures of the listed issuer or any associated corporation (within the meaning of Part XV of the Securities and Futures Ordinance):
            (a) as recorded in the register required to be kept under section 352 of the Securities and Futures Ordinance; or
            (b) as otherwise notified to the listed issuer and the Exchange pursuant to the required standard of dealings by directors of listed issuer as referred to in rule 5.46 (which for purposes of this sub-paragraph shall be deemed to apply to the PRC issuer's supervisors to the same extent as it applies to directors); or
            (c) if there is no such interests or short positions, a statement of that fact,

            provided that the Exchange may agree, in its sole discretion, that compliance with this sub-paragraph may be modified or waived in respect of any associated corporation if, in the opinion of the Exchange, the number of associated corporations in respect of which each director and chief executive is taken or deemed to have an interest under Part XV of the Securities and Futures Ordinance is such that compliance with this sub-paragraph would result in particulars being given which are not material in the context of the group and are of excessive length.
            (2) The information required to be included by virtue of rule 18.69(1) must specify the company in which interests or short positions are held, the class to which those securities belong and the number of such securities held, but need not disclose:
            (a) the interests of a director or a chief executive officer in the shares of the listed issuer or any of its subsidiaries if such interest is held solely in a non-beneficial capacity and is for the purpose of holding the requisite qualifying shares; or
            (b) the non-beneficial interests of directors or chief executive officers in the shares of any subsidiary of the listed issuer in so far as that interest comprises the holding of shares subject to the terms of a written, valid and legally enforceable declaration of trust in favour of the parent company of that subsidiary or the listed issuer and such interest is held solely for the purpose of ensuring that the relevant subsidiary has more than one member.

            Note: Where interests in securities arising from the holding of such securities as qualifying shares are not disclosed pursuant to the exception provided in this paragraph, a general statement should nevertheless be made to indicate that the directors hold qualifying shares.

          • 18.70

            A statement as at the end of the relevant period showing the interests or short positions of every person, other than a director or chief executive of the listed issuer, in the shares and underlying shares of the listed issuer as recorded in the register required to be kept under section 336 of the Securities and Futures Ordinance, or if there is no such interests or short positions recorded in the register, a statement of that fact.

            Notes:

            1 For the purposes of rules 18.69 and 18.70, particulars should be given of the extent of any duplication which occurs.
            2 In the case of a PRC issuer, references to director or chief executive in rules 18.69 and 18.70 inclusive shall also mean and include supervisors.

          • 18.71

            Statements disclosing interests and short positions in shares, underlying shares and debentures have to separately refer to three categories of persons, namely, directors and chief executives, substantial shareholders and other persons who are required to disclose their interests. Such statements should describe the capacity in which such interests and short positions are held and the nature of such interests and short positions as disclosed in the prescribed forms required to be used, when giving notice pursuant to sections 324 and 347 of Part XV of the Securities and Futures Ordinance. Where interests or short positions are attributable on account of holdings through corporations that are not wholly-owned by the person making disclosure, the percentage interests held by such person in such corporations should be disclosed.

          • 18.71A

            For directors and chief executives, the statements should show details of the following matters as recorded in the register required to be kept under section 352 of the Securities and Futures Ordinance:

            (1) aggregate long position in shares and (in respect of positions held pursuant to equity derivatives) underlying shares and in debentures of the issuer and its associated corporation(s) showing separately for each entity:
            (a) interests in shares (other than pursuant to equity derivatives such as share options, warrants to subscribe or convertible bonds);
            (b) interests in debentures; and
            (c) interests under equity derivatives showing separately for listed and unlisted equity derivatives, interests in underlying shares of the entity pursuant to:
            (i) physically settled equity derivatives;
            (ii) cash settled equity derivatives;
            (iii) other equity derivatives.

            Notes:
            (1) In the case of issuers and associated corporations, the statements should include the percentage which the aggregate long position in shares represents to the issued voting shares of the issuer or associated corporation.
            (2) A long position arises where a person is a party to an equity derivative, by virtue of which the person:
            (i) has a right to take the underlying shares;
            (ii) is under an obligation to take the underlying shares;
            (iii) has a right to receive money if the price of the underlying shares increases; or
            (iv) has a right to avoid or reduce a loss if the price of the underlying shares increases.
            (3) For (c)(i) above, in respect of options granted to directors or chief executives pursuant to share option schemes under Chapter 23 of the GEM Listing Rules, the statements should show such details as are required to be disclosed under Rule 23.07(1) of the GEM Listing Rules.
            (2) aggregate short position in shares and (in respect of positions held pursuant to equity derivatives) underlying shares and in debentures of the issuer and its associated corporation(s) showing separately for each entity:
            (a) short positions in respect of shares arising under a stock borrowing and lending agreement; and
            (b) short positions under equity derivatives showing separately for listed and unlisted equity derivatives, interests in underlying shares of the entity pursuant to:
            (i) physically settled equity derivatives;
            (ii) cash settled equity derivatives; and
            (iii) other equity derivatives.

            Notes:
            (1) In the case of issuers or associated corporations, the statements should include the percentage which the aggregate short position in shares represents to the issued voting shares of the issuer or associated corporation.
            (2) A short position arises:
            (i) where the person is the borrower of shares under a securities borrowing and lending agreement, or has an obligation to deliver the underlying shares to another person who has lent shares;
            (ii) where the person is the holder, writer or issuer of any equity derivatives, by virtue of which the person —
            (a) has a right to require another person to take the underlying shares of the equity derivatives;
            (b) is under an obligation to deliver the underlying shares of the equity derivatives to another person;
            (c) has a right to receive from another person money if the price of the underlying shares declines; or
            (d) has a right to avoid a loss if the price of the underlying shares declines.

          • 18.71B

            For substantial shareholders, the statements should show details of the following matters as recorded in the register required to be kept under section 336 of the Securities and Futures Ordinance:

            (1) aggregate long position in the shares and (in respect of positions held pursuant to equity derivatives) underlying shares of the issuer showing separately:
            (a) interests in shares (other than pursuant to equity derivatives such as share options, warrants to subscribe or convertible bonds); and
            (b) interests under equity derivatives showing separately for listed and unlisted equity derivatives, interests in underlying shares of the entity pursuant to:
            (i) physically settled equity derivatives; and
            (ii) cash settled equity derivatives.

            Notes:
            (1) The statements should include the percentage which the aggregate long position in shares represents to the issued voting shares of the issuer.
            (2) A long position arises where a person is a party to an equity derivative, by virtue of which the person:
            (i) has a right to take the underlying shares;
            (ii) is under an obligation to take the underlying shares;
            (iii) has a right to receive money if the price of the underlying shares increases; or
            (iv) has a right to avoid or reduce a loss if the price of the underlying shares increases.
            (3) For (b)(i) above, in respect of options granted to substantial shareholders pursuant to share option schemes under Chapter 23 of the GEM Listing Rules, the statements should show such details as are required to be disclosed under Rule 23.07(1) of the GEM Listing Rules.
            (2) aggregate short position in shares and (in respect of positions held pursuant to equity derivatives) underlying shares of the issuer showing separately:
            (a) short positions in respect of shares arising under a stock borrowing and lending agreement; and
            (b) short positions under equity derivatives showing separately for listed and unlisted equity derivatives, interests in underlying shares of the entity pursuant to:
            (i) physically settled equity derivatives; and
            (ii) cash settled equity derivatives.

            Notes:
            (1) The statements should include the percentage which the aggregate short position in shares represents to the issued voting shares of the issuer.
            (2) A short position arises:
            (i) where the person is the borrower of shares under a securities borrowing and lending agreement, or has an obligation to deliver the underlying shares to another person who has lent shares;
            (ii) where the person is the holder, writer or issuer of any equity derivatives, by virtue of which the person —
            (a) has a right to require another person to take the underlying shares of the equity derivatives;
            (b) is under an obligation to deliver the underlying shares of the equity derivatives to another person;
            (c) has a right to receive from another person money if the price of the underlying shares declines; or
            (d) has a right to avoid a loss if the price of the underlying shares declines.

          • 18.71C

            For other persons whose interests are recorded (or, in the case of a new listing, are required to be recorded) in the register required to be kept under section 336 of the Securities and Futures Ordinance, the statements should show details of the same matters as are required to be disclosed in the case of a substantial shareholder pursuant to Rule 18.71B, except that note (3) to Rule 18.71B(1) does not apply.

          • 18.72

            An explanatory statement relating to the activities of the group and profit (or loss) during the relevant period which must include any significant information enabling investors to make an informed assessment of the trend of the activities and profit (or loss) of the group together with an indication of any special factor which has influenced those activities and the profit (or loss) during the period in question, and enable a comparison to be made with the corresponding period of the preceding financial year and must also, as far as possible, refer to the prospects of the group in the current financial year.

          • 18.73 [Repealed]

            [Repealed 31 December 2015]

          • 18.74

            Any supplementary information which in the opinion of the directors of the listed issuer is necessary for a reasonable appreciation of the results for the relevant period.

          • 18.75

            Information as to the interests (if any) of the Compliance Adviser and its directors, employees and close associates, as notified to the issuer pursuant to rule 6A.32 and all directors and controlling shareholders of the issuer and their respective close associates as referred to in rule 11.04.

          • 18.76

            Each quarterly report must state whether or not the information provided therein has been audited (and if so, must set out a copy of the auditors’ report thereon). In the event that any auditors’ report thereon (if any) is a modified report, details of such modification must be set out in the quarterly report.

        • [Repealed]

          [Repealed 31 December 2015]

          • 18.77 [Repealed]

            [Repealed 31 December 2015]

      • Preliminary announcement of results for each of the first 6 month of each financial year

        • 18.78

          A listed issuer must publish (in accordance with the requirements of Chapter 16) a preliminary announcement of the results for the first 6 months of each financial year, containing at least the information set out below, on the GEM website as soon as possible, but in any event not later than the time that is 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the next business day after approval by or on behalf of the board of the results. The issuer must publish such results not later than 45 days after the end of such period:
           
          (1)    the information in respect of the statement of profit or loss and other comprehensive income and the statement of financial position as set out in rule 18.50B comprising statement of profit or loss and other comprehensive income for the current interim period, with comparative figures for the comparable period of the immediately preceding financial year and statement of financial position as at the end of the interim period, with comparative figures as at the end of the immediately preceding financial year. The listed issuer must include the notes relating to revenue, taxation, earnings per share, dividends and any other notes that the directors consider necessary for a reasonable appreciation of the results for the financial period. The statement of profit or loss and other comprehensive income and statement of financial position shall be as they appear in the listed issuer's full half-year report;
           
          Note:    [Repealed 31 December 2015]
           
          (2)    particulars of any purchase, sale or redemption by the listed issuer, or any of its subsidiaries of its listed securities during the relevant period as required by rule 18.55(3), or an appropriate negative statement;
           
          (3)    a commentary covering the following:
           
          (a)    a fair review of the development of the business of the listed issuer and its subsidiaries during the financial period and of their financial position at the end of the period;
           
          (b)    details of important events affecting the listed issuer and its subsidiaries which have occurred since the end of the financial period; and
           
          (c)    an indication of likely future developments in the business of the listed issuer and its subsidiaries, including the listed issuer's prospects for the current financial year; or

          where there are no material changes in respect of such matters since the publication of the latest annual report, an appropriate negative statement in that regard;
           
          (4)    a statement as to whether the listed issuer meets the code provisions set out in the Corporate Governance Code contained in Appendix 15. The listed issuer must also disclose any deviations from the code provisions and considered reasons for such deviations. To the extent that it is reasonable and appropriate, such information may be given by reference to the Corporate Governance Report in the immediately preceding annual report, and summarising any changes since that annual report. Any such references must be clear and unambiguous;
           
          (5)    the information required by rules 18.61 and, if applicable, rules 18.63 and 18.64;
           
          (6)    a statement as to whether or not the half-year results have been reviewed by external auditors or the audit committee of the listed issuer;
           
          (7)    full details of any disagreement by the auditors or the audit committee with the accounting treatment adopted by the listed issuer;
           
          (8)    where there are any significant changes in accounting policies, a statement of that fact must be made; and
           
          Note:    A listed issuer should apply the same accounting policies in its half-year financial statements as are applied in its annual financial statements, except where the change in accounting policy is required by an accounting standard which came into effect during the half-year period.
           
          (9)    where there are prior period adjustments due to correction of material errors, a statement of that fact must be made.
           
          Note:    Newly listed issuers will be required to prepare and publish the relevant half-year results (irrespective of whether the period in question ends on a date before or after the date on which dealings in the securities of the listed issuer commenced) where the 45-day deadline for publishing the results falls after the date on which dealings in the securities of the listed issuer commenced. The requirements under rule 18.78 are not applicable to the half-year period which ended immediately before the listing of a newly listed issuer if the following is disclosed in its listing document:—
           
          (a)    the financial information required under Chapter 18 in relation to half-year results announcements, in respect of such six-month period (with comparative figures for the corresponding six-month period of the immediately preceding financial year); and
           
          (b)    that it will not breach its constitutional documents, laws and regulations of its place of incorporation or other regulatory requirements as a result of not publishing such half-year results announcements.
           
          Such a newly listed issuer should publish an announcement no later than the time prescribed in rule 18.78 that the relevant financial information has been included in its listing document.

      • Preliminary announcement of results for each of the first 3 and 9 month periods of each financial year

        • 18.79

          Issuers' preliminary announcements of results for each of the first 3 and 9 month periods of each financial year must contain at least the information set out below stated in respect of the group and such information must be published (in accordance with the requirements of Chapter 16) on the GEM website as soon as possible, but in any event not later than the time that is 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the next business day after approval by or on behalf of the board of the results. The issuer must publish such results not later than 45 days after the end of such period:
           
          (1)    revenue;
           
          (2)    profit (or loss) before taxation, including the share of profit (or loss) of associates and joint ventures with separate disclosure of any items included therein which are exceptional because of size and incidence;
           
          (3)    taxation on profits (Hong Kong and overseas) in each case indicating basis of computation with separate disclosure of the taxation on share of associates and joint ventures' profits;
           
          (4)    profit (or loss) attributable to non-controlling interests;
           
          (5)    profit (or loss) attributable to shareholders;
           
          (6)    rates of dividend paid or proposed on each class of shares (with particulars of each such class) and amounts absorbed thereby (or an appropriate negative statement);
           
          (7)    all movements to and from any reserves;
           
          (8)    earnings per share;
           
          (9)    comparative figures of the matters specified in (1) to (8) inclusive for the corresponding previous period; and
           
          (10)    particulars of any purchase, sale or redemption by the issuer or any of its subsidiaries, of its listed securities during the relevant period, or an appropriate negative statement.
           
          Notes:  
          1    Where the items of information specified in this rule are unsuited to the listed issuer's activities, appropriate adjustments should be made. Where the requirements of this Note are unsuited to the listed issuer's activities or circumstances, the Exchange may require suitable adaptations to be made.
           
          2    The Exchange may authorise the omission from the preliminary announcement of any information if it considers:—
           
          (a)    such omission to be necessary or appropriate; or
           
          (b)    disclosure of such information would be contrary to the public interest or seriously detrimental to the issuer,

          provided that such omission would not be likely to mislead the public with regard to facts and circumstances, knowledge of which is essential for the assessment of the securities in question.
           
          3    The issuer or its representatives will be responsible for the correctness and relevance of the facts on which any application for an exemption under Note 2 above is based.
           
          4    Newly listed issuers will be required to prepare and publish the relevant 3-month or 9-month results (irrespective of whether the period in question ends on a date before or after the date on which dealings in the securities of the listed issuer commenced) where the 45-day deadline for publishing the results falls after the date on which dealings in the securities of the listed issuer commenced. The requirements under rule 18.79 are not applicable to the 3-month or 9-month period which ended immediately before the listing a newly listed issuer if the following is disclosed in its listing document:—
           
          (a)    the financial information required under Chapter 18 in relation to quarterly results announcements, in respect of such 3-month or 9-month period (with comparative figures for the corresponding 3-month or 9-month period of the immediately preceding financial year); and
           
          (b)    that it will not breach its constitutional documents, laws and regulations of its place of incorporation or other regulatory requirements as a result of not publishing such quarterly results announcements.
           
          Such a newly listed issuer should publish an announcement no later than the time prescribed in rule 18.79 that the relevant financial information has been included in its listing document.

      • [Repealed]

        [Repealed 31 December 2015]

        • 18.80 [Repealed]

          [Repealed 31 December 2015]

      • Summary financial reports

        • 18.81

          Summary financial reports of issuers must comply with the disclosure requirements set out in the Companies (Summary Financial Reports) Regulation. An issuer must also disclose the following information in its summary financial report:

          (1) particulars of any purchase, sale or redemption by the listed issuer, or any of its subsidiaries, of its listed securities during the financial year or an appropriate negative statement; and
          (2) a separate Corporate Governance Report prepared by the board on its corporate governance practices. The report must, as a minimum, contain the information required under paragraphs G to Q of Appendix 15 regarding the accounting period covered by the annual report. To the extent that it is reasonable and appropriate, this Corporate Governance Report may take the form of a summary of the Corporate Governance Report in the annual report and may also incorporate information by reference to its annual report. Any such references must be clear and unambiguous and the summary must not contain only a cross-reference without any discussion of the matter. The summary must contain, as a minimum, a narrative statement indicating overall compliance with and highlighting any deviation from the Corporate Governance Code in Appendix 15.

      • Summary half-year reports

        • 18.82

          Summary half-year reports shall include, as a minimum, the following information in respect of the listed issuer:—

          (1) information as set out in rules 18.78(1) to (9);
          (2) details of non-compliance (if any) with rules 5.05(1) and 5.05(2) and an explanation of the remedial steps taken by the listed issuer to address such non-compliance relating to appointment of a sufficient number of independent non-executive directors and an independent non-executive director with appropriate professional qualifications or accounting or related financial management expertise, respectively;
          (3) details of non-compliance with rule 5.28 (if any) and an explanation of the remedial steps taken by the listed issuer to address such non-compliance relating to establishment of an audit committee;
          (4) where the accounting information contained in a summary half-year report has been audited by the listed issuer's auditors, an opinion from the auditors as to whether the summary half-year report is consistent with the full half-year report from which it is derived;
          (5) names of the director(s) who have signed the full half-year report on behalf of the board of directors of the listed issuer;
          (6) a statement to the effect that the summary half-year report only gives a summary of the information and particulars contained in the listed issuer's full half-year report;
          (7) a statement as to how an entitled person may obtain free of charge a copy of the listed issuer's full half-year report from which the summary half-year report is derived; and
          (8) a statement as to the manner in which an entitled person may in future notify the listed issuer of his wishes to receive a copy of a summary half-year report in place of a copy of the full half-year report from which it is derived.
          Note: "Entitled person" is a person who is entitled to be sent copies of the reporting documents for the financial year under section 430 of the Companies Ordinance.

      • Recommended additional disclosure

        • 18.83

          Issuers are encouraged to disclose the following additional commentary on discussion and analysis in their half-year and annual reports:

          (1) efficiency indicators (e.g. return on equity, working capital ratios) for the last 5 financial years indicating the bases of computation;
          (2) industry specific ratios, if any, for the last 5 financial years indicating the bases of computation;
          (3) a discussion of the listed issuer's purpose, corporate strategy and principal drivers of performance;
          (4) an overview of trends in the listed issuer's industry and business;
          (5) a discussion on the listed issuer's policies and performance on community, social, ethical and reputational issues; and
          (6) receipts from, and returns to, shareholders.

          Note: Issuers should also note the recommended disclosures set out in paragraphs R to T of Appendix 15.

        • 18.84 [Repealed]

          [Repealed 1 January 2016]

    • Chapter 18A Mineral Companies

      • Scope

        This Chapter sets out additional listing conditions, disclosure requirements and continuing obligations for Mineral Companies. The additional disclosure requirements and continuing obligations will apply to a listed issuer which becomes a Mineral Company by undertaking a Relevant Notifiable Transaction involving the acquisition of Mineral or Petroleum Assets. Certain continuing obligations will apply to listed issuers that publish details of Resources and/or Reserves.

        The main headings are:

        18A.01 Definitions and interpretation
        18A.0218A.04 Conditions for listing of new applicant Mineral Companies
        18A.0518A.08 Contents of listing documents for new applicants
        18A.0918A.13 Relevant Notifiable Transactions involving the acquisition or disposal of Mineral or Petroleum Assets
        18A.1418A.17 Continuing obligations
        18A.1818A.27 Statements on Resources and/or Reserves
        18A.2818A.34 Reporting Standard

      • Definitions and interpretation

        • 18A.01

          For the purposes of this Chapter unless otherwise stated or the context otherwise requires:—

          (1) terms signifying the singular include the plural and vice versa;
          (2) the term mineral includes solid fuels; and
          (3) the following terms have the meanings set out below:—
          "CIMVAL" Standards and Guidelines for Valuation of Mineral Properties endorsed by the Canadian Institute of Mining, Metallurgy and Petroleum, February 2003 (final version) as amended from time to time.
          "Competent Evaluator" a Competent Person undertaking valuations that satisfies rule 18A.23.
          "Competent Person" a person that satisfies rules 18A.21 and 18A.22.
          "Competent Person's Report" the public report prepared by a Competent Person on Resources and/or Reserves, in compliance with this Chapter (rules 18A.18 to 18A.33) and the applicable Reporting Standard, as modified by this Chapter.
          "Contingent Resources" those quantities of Petroleum estimated, at a given date, to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable due to one or more contingencies.
          "Feasibility Study" a comprehensive design and costing study of the selected option for the development of a mineral project in which appropriate assessments have been made of realistically assumed geological, mining, metallurgical, economic, marketing, legal, environmental, social, governmental, engineering, operational and all other relevant factors, which are considered in enough detail to demonstrate at the time of reporting that extraction is reasonably justified and the factors reasonably serve as the basis for a final decision by a financial institution to finance the development of the project.
          "Indicated Resource" that part of a mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence.
          "Inferred Resource" that part of a mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence, sampling and assumed but not verified geological and/or grade continuity.
          "IOSCO Multilateral MOU" the International Organisation of Securities Commissions Multilateral Memorandum of Understanding Concerning Consultation and Co-operation and the Exchange of Information dated May 2002 as amended from time to time.
          "JORC Code" the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2004 edition), as published by the Joint Ore Reserves Committee, as amended from time to time.
          "Major Activity" an activity of an issuer and/or its subsidiaries which represents 25% or more of the total assets, revenue or operating expenses of the issuer and its subsidiaries. Reference should be made to the issuer's latest audited consolidated financial statements.
          "Measured Resource" that part of a mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence.
          "Mineral or Petroleum Assets" mineral assets and/or Petroleum assets or the equivalent as defined in either CIMVAL, the SAMVAL Code, or the VALMIN Code.
          "Mineral Company" a new applicant whose Major Activity (whether directly or through its subsidiaries) is the exploration for and/ or extraction of Natural Resources, or a listed issuer that completes a Relevant Notifiable Transaction involving the acquisition of Mineral or Petroleum Assets.
          "Natural Resources" mineral and/or Petroleum.
          "NPVs" net present values.
          "NI 43-101" also referred to as National Instrument 43-101, the (Canadian) Standards of Disclosure for Mineral Projects, including Companion Policy 43-101, as amended from time to time.
          "Petroleum" a naturally occurring mixture consisting of hydrocarbons in the gaseous, liquid or solid phase, as further defined in PRMS.
          "Possible Reserves" those quantities of Petroleum which analysis of geoscience and engineering data suggest are less likely to be recoverable than Probable Reserves.
          "Pre-feasibility Study" a comprehensive study of the viability of a mineral project that has advanced to a stage where the mining method, for underground mining, or the pit configuration, for an open pit, has been established and an effective method of mineral processing has been determined. It includes a financial analysis based on realistically assumed or reasonable assumptions of technical, engineering, legal, operating, economic, social, and environmental factors and the evaluation of other relevant factors which are enough for a Competent Person, acting reasonably, to determine if all or part of the mineral Resource may be classified as a mineral Reserve.
          "PRMS" the Petroleum Resources Management System published by the Society of Petroleum Engineers, American Association of Petroleum Geologists, World Petroleum Council, and Society of Petroleum Evaluation Engineers in March 2007, as amended from time to time.
          "Probable Reserves"
          (1) with regard to minerals, the economically mineable part of an Indicated, and in some circumstances, a Measured Resource.
          (2) with regard to Petroleum, those quantities of Petroleum which analysis of geoscience and engineering data show are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves.
          "Prospective Resources" those quantities of Petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations.
          "Proved Reserves"
          (1) with regard to minerals, the economically mineable part of a Measured Resource.
          (2) with regard to Petroleum, those quantities of Petroleum, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations.
          "Recognised Professional Organisation" a self-regulatory organisation of professional individuals in the mining or Petroleum industry which admits individuals on the basis of their academic qualifications and experience, requires compliance with professional standards of competence and ethics established by the organisation and has disciplinary powers including the power to suspend or expel a member.
          "Relevant Notifiable Transaction" a transaction that falls into one of the classifications set out in rules 19.06(3) to (6), namely a major transaction, very substantial disposal, very substantial acquisition and reverse takeover.
          "Reporting Standard" a recognised standard acceptable to the Exchange, including:
          (1) the JORC Code, NI 43-101, and the SAMREC Code, with regard to mineral Resources and Reserves;
          (2) PRMS with regard to Petroleum Resources and Reserves; and
          (3) CIMVAL, the SAMVAL Code, and the VALMIN Code, with regard to valuations.
          "Reserve"
          (1) with regard to minerals, the economically mineable part of a Measured, and/or Indicated Resource, taking into account diluting materials and allowances for losses, which may occur when the material is mined. Appropriate assessments to a minimum of a Pre-feasibilty Study must have been carried out. Mineral Reserves are sub-divided in order of increasing confidence into Probable Reserves and Proved Reserves.

          Note: Although the term mineral Reserve is used throughout this Chapter it is recognised that the term ore reserve is used in the JORC Code.
          (2) with regard to Petroleum, those quantities of Petroleum anticipated to be commercially recoverable by the application of development projects to known accumulations from a given date forward under defined conditions.
          "Resource"
          (1) with regard to minerals, a concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such form, quality and quantity that there are reasonable prospects for their eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured Resources, as defined in the JORC Code.
          (2) with regard to Petroleum, Contingent Resources and/ or Prospective Resources.
          "SAMREC Code" the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (2007 edition), as amended from time to time.
          "SAMVAL Code" the South African Code for the Reporting of Mineral Asset Valuation (2008 edition), as amended from time to time.
          "Scoping Study" a preliminary evaluation of a mineral project, including an assessment of the economic viability of mineral Resources. Scoping Studies should include forecast production schedules and cost estimates based on data under which the Resources are identified.
          "VALMIN Code" the Code for the Technical Assessment and Valuation of Mineral and Petroleum Assets and Securities for Independent Expert Reports (2005 edition) as prepared by the VALMIN Committee, a joint committee of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists and the Mineral Industry Consultants Association, as amended from time to time.
          "Valuation Report" the public valuation report prepared by a Competent Evaluator on Mineral or Petroleum Assets in compliance with this Chapter (rule 18A.34) and the applicable Reporting Standard, as modified by this Chapter. It may form part of a Competent Person's Report.

      • Conditions for listing of new applicant Mineral Companies

        • 18A.02

          In addition to satisfying the requirements of Chapter 11, a Mineral Company which has applied for listing must also satisfy the requirements of this Chapter.

        • 18A.03

          A Mineral Company must:—
           
          (1)    establish that it has the right to participate actively in the exploration for and/or extraction of Natural Resources, either:—
           
          (a)    through control over a majority (by value) of the assets in which it has invested together with adequate rights over the exploration for and/or extraction of Natural Resources; or

          Note: 'control over a majority' means an interest greater than 50%.
           
          (b)    through adequate rights (arising under arrangements acceptable to the Exchange), which give it sufficient influence in decisions over the exploration for and/or extraction of the Natural Resources;
           
          (2)    establish that it has at least a portfolio of:—
           
          (a)    Indicated Resources; or
           
          (b)    Contingent Resources,

          identifiable under a Reporting Standard and substantiated in a Competent Person's Report. This portfolio must be meaningful and of sufficient substance to justify a listing;
           
          (3)    if it has commenced production, provide an estimate of cash operating costs including the costs associated with:—
           
          (a)    workforce employment;
           
          (b)    consumables;
           
          (c)    fuel, electricity, water and other services;
           
          (d)    on and off-site administration;
           
          (e)    environmental protection and monitoring;
           
          (f)    transportation of workforce;
           
          (g)    product marketing and transport;
           
          (h)    non-income taxes, royalties and other governmental charges; and
           
          (i)    contingency allowances;

          Note: A Mineral Company must:
           
          •       set out the components of cash operating costs separately by category;
           
          •       explain the reason for any departure from the list of items to be included under cash operating costs; and
           
          •      discuss any material cost items that should be highlighted to investors.
           
          (4)    demonstrate that it has available working capital for 125% of the group's present requirements, that is for at least the next 12 months, which must include:—
           
          (a)    general, administrative and operating costs;
           
          (b)    property holding costs; and
           
          (c)    the cost of any proposed exploration and/or development; and

          Note: Capital expenditures do not need to be included in working capital requirements. Where they are financed out of borrowings, relevant interest and loan repayments must be included.
           
          (5)    ensure that its working capital statement made under Appendix 1A (paragraph 36) states it has available sufficient working capital for 125% of the group's present requirements, that is for at least 12 months from the date of its listing document.

        • 18A.04

          The Exchange may accept a trading record period of less than two financial years for rule 11.12A (and an accountants' report covering a shorter period than that specified in rule 11.10) for a new applicant Mineral Company provided that its directors and senior managers, taken together, have sufficient experience relevant to the exploration and/or extraction activity that the Mineral Company is pursuing. Individuals relied on must have a minimum of five years relevant industry experience. Details of the relevant experience must be disclosed in the listing document of the new applicant.

          Note 1: Where the Exchange accepts a trading record of less than two financial years, a new applicant must still meet the cash flow requirement of HK$30 million for that shorter trading record period, in accordance with rule 11.14.

          Note 2: A Mineral Company relying on this rule must demonstrate that its primary activity is the exploration for and/or extraction of Natural Resources.

      • Contents of listing documents for new applicants

        • 18A.05

          In addition to the information set out in Appendix 1A, a Mineral Company must include in its listing document:—

          (1) a Competent Person's Report;
          (2) a statement that no material changes have occurred since the effective date of the Competent Person's Report. Where there are material changes, these must be prominently disclosed;
          (3) the nature and extent of its prospecting, exploration, exploitation, land use and mining rights and a description of the properties to which those rights attach, including the duration and other principal terms and conditions of the concessions and any necessary licences and consents. Details of material rights to be obtained must also be disclosed;
          (4) a statement of any legal claims or proceedings that may have an influence on its rights to explore or mine;
          (5) disclosure of specific risks and general risks. Companies should have regard to Practice Note 4 on suggested risk analysis; and
          (6) if relevant and material to the Mineral Company's business operations, information on the following:—
          (a) project risks arising from environmental, social, and health and safety issues;
          (b) any non-governmental organisation impact on sustainability of mineral and/or exploration projects;
          (c) compliance with host country laws, regulations and permits, and payments made to host country governments in respect of tax, royalties and other significant payments on a country by country basis;
          (d) sufficient funding plans for remediation, rehabilitation and, closure and removal of facilities in a sustainable manner;
          (e) environmental liabilities of its projects or properties;
          (f) its historical experience of dealing with host country laws and practices, including management of differences between national and local practice;
          (g) its historical experience of dealing with concerns of local governments and communities on the sites of its mines, exploration properties, and relevant management arrangements; and
          (h) any claims that may exist over the land on which exploration or mining activity is being carried out, including any ancestral or native claims.

        • Additional disclosure requirements that apply to certain new applicant Mineral Companies (18A.06-18A.08)

          • 18A.06

            If a Mineral Company has begun production, it must disclose an estimate of the operating cash cost per appropriate unit for the minerals and/or Petroleum produced.

          • 18A.07

            If a Mineral Company has not yet begun production, it must disclose its plans to proceed to production with indicative dates and costs. These plans must be supported by at least a Scoping Study, substantiated by the opinion of a Competent Person. If exploration rights or rights to extract Resources and/or Reserves have not yet been obtained, relevant risks to obtaining these rights must be prominently disclosed.

          • 18A.08

            If a Mineral Company is involved in the exploration for or extraction of Resources, it must prominently disclose to investors that its Resources may not ultimately be extracted at a profit.

      • Relevant Notifiable Transactions involving the acquisition or disposal of Mineral or Petroleum Assets

        • 18A.09

          A Mineral Company proposing to acquire or dispose of assets which are solely or mainly Mineral or Petroleum Assets as part of a Relevant Notifiable Transaction must:—

          (1) comply with Chapter 19 and Chapter 20, if relevant;
          (2) produce a Competent Person's Report, which must form part of the relevant circular, on the Resources and/or Reserves being acquired or disposed of as part of the Relevant Notifiable Transaction;

          Note: The Exchange may dispense with the requirement for a Competent Person's Report on disposals where shareholders have sufficient information on the assets being disposed of.
          (3) in the case of a major (or above) acquisition, produce a Valuation Report, which must form part of the relevant circular, on the Mineral or Petroleum Assets being acquired as part of the Relevant Notifiable Transaction; and
          (4) comply with the requirements of rules 18A.05(2) to 18A.05(6) in respect of the assets being acquired.

          Note: Material liabilities that remain with the issuer on a disposal must also be discussed.

        • Requirements that apply to listed issuers (18A.10-18A.11)

          • 18A.10

            A listed issuer proposing to acquire assets which are solely or mainly Mineral or Petroleum Assets as part of a Relevant Notifiable Transaction must comply with rule 18A.09.

          • 18A.11

            On completion of a Relevant Notifiable Transaction involving the acquisition of Mineral or Petroleum Assets, unless the Exchange decides otherwise, a listed issuer will be treated as a Mineral Company.

        • Requirements that apply to Mineral Companies and listed issuers (18A.12-18A.13)

          • 18A.12

            The Exchange may dispense with the requirement to produce a new Competent Person's Report or a Valuation Report under rules 18A.05(1), 18A.09(2) or 18A.09(3), if the issuer has available a previously published Competent Person's Report or Valuation Report (or equivalent) which complies with rules 18A.18 to 18A.34 (where applicable), provided the report is no more than six months old. The issuer must provide this document and a no material change statement in the listing document or circular for the Relevant Notifiable Transaction.

          • 18A.13

            An issuer must obtain the prior written consent of a Competent Person(s) or Competent Evaluator for their material to be included in the form and context in which it appears in a listing document or circular for the Relevant Notifiable Transaction, whether or not such person or firm is retained by the listing applicant or the issuer.

      • Continuing obligations

        • Disclosure in reports (18A.14)

          • 18A.14

            A Mineral Company must include in its interim (half-yearly) and annual reports details of its exploration, development and mining production activities and a summary of expenditure incurred on these activities during the period under review. If there has been no exploration, development or production activity, that fact must be stated.

        • Publication of Resources and Reserves (18A.15-18A.17)

          • 18A.15

            A listed issuer that publicly discloses details of Resources and/or Reserves must give an update of those Resources and/or Reserves once a year in its annual report, in accordance with the reporting standard under which they were previously disclosed or a Reporting Standard.

          • 18A.16

            A Mineral Company must include an update of its Resources and/or Reserves in its annual report in accordance with the Reporting Standard under which they were previously disclosed.

          • 18A.17

            Annual updates of Resources and/or Reserves must comply with rule 18A.18.

            Note: Annual updates are not required to be supported by a Competent Person's Report and may take the form of a no material change statement.

      • Statements on Resources and/or Reserves

        • Presentation of data (18A.18)

          • 18A.18

            Any data presented on Resources and/or Reserves by a Mineral Company in a listing document, Competent Person's Report, Valuation Report or annual report, must be presented in tables in a manner readily understandable to a non-technical person. All assumptions must be clearly disclosed and statements should include an estimate of volume, tonnage and grades.

        • Basis of evidence (18A.19)

          • 18A.19

            All statements referring to Resources and/or Reserves:—

            (1) in any new applicant listing document or circular relating to a Relevant Notifiable Transaction, must be substantiated in a Competent Person's Report which must form part of the document; and
            (2) in all other cases, must at least be substantiated by the issuer's internal experts.

        • Petroleum Competent Persons' Reports (18A.20)

          • 18A.20

            A Competent Person's Report for Mineral Companies involved in the exploration for and/ or extraction of Petroleum Resources and Reserves must include the information set out in Appendix 18.

        • Competent Person (18A.21-18A.22)

          • 18A.21

            A Competent Person must:—

            (1) have a minimum of five years experience relevant to the style of mineralization and type of deposit under consideration or to the type of Petroleum exploration, reserve estimate (as appropriate), and to the activity which the Mineral Company is undertaking;
            (2) be professionally qualified, and be a member in good standing of a relevant Recognised Professional Organisation, in a jurisdiction where, in the Exchange's opinion, the statutory securities regulator has satisfactory arrangements (either by way of the IOSCO Multilateral MOU or other bi-lateral agreement acceptable to the Exchange) with the Commission for mutual assistance and exchange of information for enforcing and securing compliance with the laws and regulations of that jurisdiction and Hong Kong; and
            (3) take overall responsibility for the Competent Person's Report.

          • 18A.22

            A Competent Person must be independent of the issuer, its directors, senior management and advisers. Specifically the Competent Person retained must:—

            (1) have no economic or beneficial interest (present or contingent) in any of the assets being reported on;
            (2) not be remunerated with a fee dependent on the findings of the Competent Person's Report;
            (3) in the case of an individual, not be an officer, employee or proposed officer of the issuer or any group, holding or associated company of the issuer; and
            (4) in the case of a firm, not be a group, holding or associated company of the issuer. Any of the firm's partners or officers must not be officers or proposed officers of any group, holding or associated company of the issuer.

        • Additional requirements of Competent Evaluators (18A.23)

          • 18A.23

            In addition to the requirements set out in rules 18A.21(2) and 18A.22, a Competent Evaluator must:—

            (1) have at least ten years relevant and recent general mining or Petroleum experience (as appropriate);
            (2) have at least five years relevant and recent experience in the assessment and/or valuation of Mineral or Petroleum Assets or securities (as appropriate); and
            (3) hold all necessary licences.

            Note: A Competent Person's Report and Valuation Report may be performed by the same Competent Person provided he or she is also a Competent Evaluator.

        • Scope of Competent Persons' Reports and Valuation Reports (18A.24)

          • 18A.24

            A Competent Person's Report or Valuation Report must comply with a Reporting Standard as modified by this Chapter, and must:—

            (1) be addressed to the Mineral Company or listed issuer;
            (2) have an effective date (being the date when the contents of the Competent Person's Report or Valuation Report are valid) less than six months before the date of publishing the listing document or circular relating to a Relevant Notifiable Transaction required under the Listing Rules; and
            (3) set out what Reporting Standard has been used in preparing the Competent Person's Report or Valuation Report, and explain any departure from the relevant Reporting Standard.

        • Disclaimers and Indemnities (18A.25-18A.26)

          • 18A.25

            A Competent Person's Report or Valuation Report may contain disclaimers of sections or topics outside their scope of expertise in which the Competent Person or Competent Evaluator relied upon other experts' opinions, but must not contain any disclaimers of the report in its entirety.

          • 18A.26

            The Competent Person or Competent Evaluator must prominently disclose in the Competent Person's Report or Valuation Report the nature and details of all indemnities provided by the issuer. Indemnities for reliance placed on information provided by issuers and third party experts (for information outside the Competent Person's or Competent Evaluator's expertise) are generally acceptable. Indemnities for fraud and gross negligence are generally unacceptable.

        • Obligations of sponsor (18A.27)

          • 18A.27

            Any sponsor appointed to or by a new applicant Mineral Company under Chapter 6A must ensure that any Competent Person or Competent Evaluator meets the requirements of this Chapter.

      • Reporting Standard

        • Mineral reporting standard (18A.28-18A.30)

          • 18A.28

            In addition to satisfying the requirements of Chapter 17 (as modified by this Chapter), a Mineral Company exploring for and/or extracting mineral Resources and Reserves must also satisfy rules 18A.29 and 18A.30.

          • 18A.29

            A Mineral Company must disclose information on mineral Resources, Reserves and/or exploration results either:—

            (1) under:
            (a) the JORC Code;
            (b) NI 43-101; or
            (c) the SAMREC Code,
            as modified by this Chapter; or
            (2) under other codes acceptable to the Exchange as communicated to the market from time to time, provided the Exchange is satisfied that they give a comparable standard of disclosure and sufficient assessment of the underlying assets.

            Note: The Exchange may allow presentation of Reserves under other reporting standards provided reconciliation to a Reporting Standard is provided. A Reporting Standard applied to specific assets must be used consistently.

          • 18A.30

            A Mineral Company must ensure that:—

            (1) any estimates of mineral Reserves disclosed are supported, at a minimum, by a Pre-feasibility Study;
            (2) estimates of mineral Reserves and mineral Resources are disclosed separately;
            (3) Indicated Resources and Measured Resources are only included in economic analyses if the basis on which they are considered to be economically extractable is explained and they are appropriately discounted for the probabilities of their conversion to mineral Reserves. All assumptions must be clearly disclosed. Valuations for Inferred Resources are not permitted;
            (4) for commodity prices used in Pre-feasibility Studies, Feasibility Studies and valuations of Indicated Resources, Measured Resources and Reserves:—
            (a) the methods to determine those commodity prices, all material assumptions, and the basis on which those prices represent reasonable views of future prices are explained clearly; and
            (b) if a contract for future prices of mineral Reserves exists, the contract price is used; and
            (5) for forecast valuations of Reserves and profit forecasts, sensitivity analyses to higher and lower prices are supplied. All assumptions must be clearly disclosed.

        • Petroleum reporting standard (18A.31-18A.33)

          • 18A.31

            In addition to satisfying the requirements of Chapter 17 (as modified by this Chapter), a Mineral Company exploring for and/or extracting Petroleum Resources and Reserves must also satisfy rules 18A.32 and 18A.33.

          • 18A.32

            A Mineral Company must disclose information on Petroleum Resources and Reserves either:—

            (1) under PRMS as modified by this Chapter; or
            (2) under other codes acceptable to the Exchange if it is satisfied that they give a comparable standard of disclosure and sufficient assessment of the underlying assets.

            Note: A Reporting Standard applied to specific assets must be used consistently.

          • 18A.33

            A Mineral Company must ensure that:—

            (1) where estimates of Reserves are disclosed, the method and reason for choice of estimation are disclosed (i.e. deterministic or probabilistic methods, as defined in PRMS). Where the probabilistic method is used, the underlying confidence levels applied must be stated;
            (2) if the NPVs attributable to Proved Reserves and Proved plus Probable Reserves are disclosed, they are presented on a post-tax basis at varying discount rates (including a reflection of the weighted average cost of capital or minimum acceptable rate of return that applies to the entity at the time of evaluation) or a fixed discount rate of 10%;
            (3) Proved Reserves and Proved plus Probable Reserves are analysed separately and principal assumptions (including prices, costs, exchange rates and effective date) and the basis of the methodology are clearly stated;
            (4) if the NPVs attributable to Reserves are disclosed, they are presented using a forecast price as a base case or using a constant price as a base case. The bases for the forecast case must be disclosed. The constant price is defined as the unweighted arithmetic average of the closing price on the first day of each month within the 12 months before the end of the reporting period, unless prices are defined by contractual arrangements. The basis on which the forecast price is considered reasonable must be disclosed and Mineral Companies must comply with rule 18A.30(5);

            Note: In the forecast case under PRMS, the economic evaluation underlying the investment decision is based on the entity's reasonable forecast of future conditions, including costs and prices, which will exist during the life of the project.
            (5) if estimated volumes of Contingent Resources or Prospective Resources are disclosed, relevant risk factors are clearly stated;

            Note: Under PRMS, wherever the volume of a Contingent Resource is stated, risk is expressed as the chance that the accumulation will be commercially developed and graduate to the reserves class. Wherever the volume of a Prospective Resource is stated, risk is expressed as the chance that a potential accumulation will result in a significant discovery of Petroleum.
            (6) economic values are not attached to Possible Reserves, Contingent Resources or Prospective Resources; and
            (7) where an estimate of future net revenue is disclosed, whether calculated without discount or using a discount rate, it is prominently disclosed that the estimated values disclosed do not represent fair market value.

        • Mineral or Petroleum Asset Valuation Reports (18A.34)

          • 18A.34

            A Mineral Company must ensure that:—

            (1) any valuation of its Mineral or Petroleum Assets is prepared under the VALMIN Code, SAMVAL Code, CIMVAL or such other code approved by the Exchange from time to time;
            (2) the Competent Evaluator states clearly the basis of valuation, relevant assumptions and the reason why a particular method of valuation is considered most appropriate, having regard to the nature of the valuation and the development status of the Mineral or Petroleum Asset;
            (3) if more than one valuation method is used and, different valuations result, the Competent Evaluator comments on how the valuations compare and on the reason for selecting the value adopted; and
            (4) in preparing any valuation a Competent Evaluator meets the requirements set out in rule 18A.23.

    • Chapter 19 Notifiable Transactions

      • Preliminary

        • 19.01

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

        • 19.02

          If any transaction for the purposes of this Chapter is also a connected transaction for the purposes of Chapter 20, the listed issuer will, in addition to complying with the provisions of this Chapter, have to comply with the provisions of Chapter 20.

        • 19.03 [Repealed]

          [Repealed 1 January 2009]

      • Definitions

        • 19.04

          For the purposes of this Chapter:—
          (1)    any reference to a "transaction" by a listed issuer:
           
            (a)    includes the acquisition or disposal of assets, including deemed disposals as referred to in rule 19.29;
           
            (b) includes any transaction involving a listed issuer writing, accepting, transferring, exercising or terminating (in the manner described in rule 19.73) an option (as defined in rule 19.72) to acquire or dispose of assets or to subscribe for securities;
           
            (c) includes entering into or terminating finance leases where the financial effects of such leases have an impact on the balance sheet and/or profit and loss account of the listed issuer;
           
            (d) includes entering into or terminating operating leases which, by virtue of their size, nature or number, have a significant impact on the operations of the listed issuer. The Exchange will normally consider an operating lease or a transaction involving multiple operating leases to have a "significant impact" if such lease(s), by virtue of its/their total monetary value or the number of leases involved, represent(s) a 200% or more increase in the scale of the listed issuer's existing operations conducted through lease arrangements of such kind;
           
            (e) includes granting an indemnity or a guarantee or providing financial assistance by a listed issuer, other than by a listed issuer which:
           
              (i)    is a banking company (as defined in rule 20.06(3)) and provides the financial assistance (as defined in rule 20.06(17)) in its ordinary and usual course of business (as referred to in rule 19.04(8));
           
              (ii) grants an indemnity or a guarantee, or provides financial assistance to its subsidiaries; or
           
              (iii) is a securities house and provides the financial assistance (as defined in rule 20.06(17)) in its ordinary and usual course of business (as referred to in rule 19.04(8)) and upon normal commercial terms, either:
           
                (A)    by way of securities margin financing (which means providing a financial accommodation in order to facilitate:
           
                  (aa)    the acquisition of securities listed on any stock market, whether a recognized stock market (as defined in Schedule 1 to the Securities and Futures Ordinance) or any other stock market outside Hong Kong; and
           
                  (bb)    (where applicable) the continued holding of those securities,

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

          Note: Such a transaction may nevertheless in some cases constitute a connected transaction under Chapter 20. In such cases, the listed issuer will have to comply with the provisions of Chapter 20.
           
            (f) includes entering into any arrangement or agreement involving the formation of a joint venture entity in any form, such as a partnership or a company, or any other form of joint arrangement, other than a joint venture where:
           
              (i)    the joint venture is engaging in a single purpose project/transaction which is of a revenue nature in the ordinary and usual course of business of the issuer (see rule 19.04(1)(g));
           
              (ii) the joint venture arrangement is on an arm's length basis and on normal commercial terms; and
           
              (iii) the joint venture agreement contains clause(s) to the effect that the joint venture may not, without its partners' unanimous consent:
           
                (A)    change the nature or scope of its business; or
           
                (B)    enter into any transactions which are not on an arm's length basis; and
           
            (g) to the extent not expressly provided in rules 19.04(1)(a) to (f), excludes any transaction of a revenue nature in the ordinary and usual course of business (as referred to in rule 19.04(8)) of the listed issuer;
           
              Notes: 1 To the extent not expressly provided in rules 19.04(1)(a) to (f), any transaction of a revenue nature in the ordinary and usual course of business of a listed issuer will be exempt from the requirements of this Chapter.
           
                2 (a)    Any transaction involving the acquisition or disposal of properties will generally not be considered to be of a revenue nature unless such transaction is carried out as one of the principal activities and in the ordinary and usual course of business of the listed issuer.
           
                  (b)    Any transaction involving the acquisition or disposal of securities will generally not be considered to be of a revenue nature unless it is carried out in the ordinary and usual course of business by a member of the listed issuer's group that is:
           
                    (i)    a banking company (as defined in rule 20.86);
           
                    (ii)    an insurance company; or
           
                    (iii)    a securities house that is manly engaged in regulated activities under the SFO. It should be noted that proprietary securities trading and/or investment is not a regulated activity under the SFO and accordingly, this exemption is not available where proprietary securities trading and/or investment constitutes a significant part of the business of the securities house.
           
                3 Where a listed issuer, for the financial reporting purpose, has transferred an asset from the fixed asset account to the current asset account, a subsequent disposal of the asset by the listed issuer will not be exempt under rule 19.04(1)(g).
           
                4 In considering whether or not a transaction is of a revenue nature, a listed issuer must take into account the following factors:
           
                  (a)    whether previous transactions or recurring transactions that were of the same nature were treated as notifiable transactions;
           
                  (b)    the historical accounting treatment of its previous transactions that were of the same nature;
           
                  (c)    whether the accounting treatment is in accordance with generally acceptable accounting standards; and
           
                  (d)    whether the transaction is a revenue or capital transaction for tax purposes.

          These factors are included for guidance only and are not intended to be exhaustive. The Exchange may take into account other factors relevant to a particular transaction in assessing whether or not it is of a revenue nature. In cases of doubt, the listed issuer must consult the Exchange at an early stage.
           
          (2)    "accounts" means:—
           
            (a)    in respect of a listed issuer, and for the purpose of determining its total assets, profits or revenue figures pursuant to rule 19.07, the listed issuer's latest published audited accounts or, where consolidated accounts have been prepared, the listed issuer's latest published audited consolidated accounts; and
           
            (b) in the case of any other company, legal person, partnership, trust or business unit, its latest audited accounts or, where consolidated accounts have been prepared, its latest audited consolidated accounts or, where no audited accounts have been prepared, such other accounts as may be permitted by the Exchange in its discretion;
           
          (2A)    "acquisition targets" in rules 19.06B, 19.06C, 19.53A, 19.54 and 19.57A mean the assets to be acquired, or in the context of a series of transactions and/or arrangements, the assets acquired and/or to be acquired. In other words, a series of transactions and/or arrangements may include completed acquisition(s);
           
          (3)    an "aircraft company" means a company or other entity whose non-cash assets consist solely or mainly of aircraft or interests in aircraft or interests in companies or entities whose non-cash assets consist solely or mainly of aircraft and whose income is mainly derived from those aircraft;
           
          (4)    "assets" means both tangible and intangible assets and includes businesses, companies and securities, whether listed or not (unless otherwise stated);
           
          (5)    "de minimis ratio" means the ratio determined in accordance with rules 20.74, 20.85(2) and 20.85(3) (as the case may be);
           
          (5A)    an "insurance company" means a company which is authorized to carry out insurance business under the Insurance Ordinance or appropriate overseas legislation or authority. For the avoidance of doubt, an "insurance company" does not include an insurance broker or insurance agent;
           
          (6)    a "listed issuer" means a company or other legal person whose securities are al listed on GEM and, unless the context otherwise requires, includes its subsidiaries;
           
          (7)    a "notifiable transaction" means a transaction classified as a share transaction, discloseable transaction, major transaction, very substantial disposal or very substantial acquisition under rule 19.06 or a transaction classified as a reverse takeover or extreme transaction under rule 19.06B or 19.06C;
           
          (8)    "ordinary and usual course of business" of an entity means the existing principal activities of the entity or an activity wholly necessary for the principal activities of the entity. In the context of financial assistance provided in the ordinary and usual course of business, this means financial assistance provided by a banking company only or by a securities house pursuant to rule 19.04(1)(e)(iii) only and, in the context of financial assistance not provided in the ordinary and usual course of business, it means financial assistance not provided by a banking company or by a securities house under rule 19.04(1)(e)(iii);
           
          (9)    "percentage ratios" means the percentage ratios set out in rule 19.07, and "assets ratio", "profits ratio", "revenue ratio", "consideration ratio" and "equity capital ratio" shall bear the respective meanings set out in rule 19.07;
           
          (10)    a "property company" means a company or other entity whose non-cash assets consist solely or mainly of properties or interests in properties or interests in companies or entities whose non-cash assets consist solely or mainly of properties and whose income is mainly derived from those properties;
           
          (10A)    [Repealed 1 February 2011]
           
          (10B)    "Qualified Issuer" means an issuer actively engaged in property development as a principal business activity. For determining whether property development is a principal activity of an issuer, consideration will be given to the following factors:
           
            (a)    clear disclosure of property development activity as a current and continuing principal business activity in the Directors' Report of its latest published annual financial statements;
           
            (b) property development activity is reported as a separate and continuing segment (if not the only segment) in its latest published financial statements; and
           
            (c) its format for reporting segmental information and its latest published annual financial statements have fully complied with the requirements of relevant accounting standards adopted for the preparation of its annual financial statements on reporting of segment revenue and segment expense.
           
          (10C)    "Qualified Property Acquisition" means an acquisition of land or property development project in Hong Kong from Government or Government-controlled entities through a public auction or tender; or an acquisition of governmental land in the Mainland from a PRC Governmental Body (as defined in rule 25.04) through a tender (招標), auction (拍賣), or listing-for-sale (掛牌) governed by the PRC law (as defined in rule 25.04);
           
            Note: The Exchange may relax this requirement to accept land acquired in other jurisdictions from governmental bodies through public auctions or tenders. Factors which the Exchange will consider include:
           
              (i) whether the government land is acquired through a competitive bidding process regulated by legislation and/or requirements in the relevant jurisdiction;
           
              (ii) whether the bidding process is fairly structured and established, and bidders have no discretion to change pre-established terms;
           
              (iii) whether acquiring government land through a bidding process is a common practice in that jurisdiction; and
           
              (iv) the problems faced by the issuer in complying with the notifiable transaction Rules for the land acquisition.
           
          (10D)    "Qualified Aircraft Leasing Activity" means:
           
            (a)    an acquisition of aircraft;
           
            (b) a finance lease in respect of the leasing of aircraft to an aircraft operator (i.e. an entity which carries on a business of operating aircraft as an owner or charterer for providing services for the carriage by air of passengers, cargo or mail), including financing arrangements in a sale and leaseback transaction;
           
            (c) an operating lease in respect of leasing of aircraft to an aircraft operator; or
           
            (d) a disposal of aircraft.
           
            For the purpose of this rule and rule 19.04(10E), "aircraft leasing with an aircraft operator" include leases of aircraft to the aircraft operator directly or indirectly through an intermediate lessor related to the aircraft operator.
           
          (10E)    "Qualified Aircraft Lessor" means a listed issuer actively engaged in aircraft leasing with aircraft operators (as defined in rule 19.04(10D)) as a principal business in its ordinary and usual course of business. In making this determination, consideration will also be given to the following factors:
           
            (a)    there is clear disclosure of aircraft leasing as a current and continuing principal business activity in the issuer's latest published annual report and financial statements (or in the case of a newly listed issuer, its listing document);
           
            (b) aircraft leasing is reported as a separate and continuing segment (if not the only segment) in the issuer's latest published financial statements. The format for reporting segmental information and its latest published annual financial statements have fully complied with the relevant accounting standards adopted for the preparation of its annual financial statements; and
           
            (c) the lessor's directors and senior management, taken together, have sufficient experience relevant to the aircraft leasing industry. Individuals relied on must have a minimum of five years' relevant industry experience.
           
          (11)    a "securities house" means a corporation which is licensed or registered under the Securities and Futures Ordinance for Type 1 (dealing in securities) or Type 8 (securities margin financing) regulated activity;
           
          (11A)    a "shipping company" means a company or other entity whose non-cash assets consist solely or mainly of vessels or interests in vessels or interests in companies or entities whose non-cash assets consist solely or mainly of vessels and whose income is mainly derived from those vessels; and
           
          (12)    "total assets" means:—
           
            (a)    in respect of a listed issuer, the total fixed assets, including intangible assets, plus the total current and non-current assets, as shown in its accounts or latest published half-year, quarterly or other interim reports (whichever is more recent), subject to any adjustments or modifications arising by virtue of the provisions of rules 19.16, 19.18 and 19.19; and
           
            (b) in the case of any other company, legal person, partnership, trust or business unit, the total fixed assets, including intangible assets, plus the total current and non-current assets, as shown in its accounts, subject to any adjustments or modifications arising from any significant changes to its assets subsequent to the date of the balance sheet in the accounts.
           
              Note: Listed issuers must demonstrate that any such adjustments or modifications to the accounts of the relevant company, legal person, partnership, trust or business unit are necessary and appropriate in order to reflect its latest financial position.
           

      • Classification

        • 19.05

          A listed issuer considering a transaction must, at an early stage, consider whether the transaction falls into one of the classifications set out in rule 19.06, 19.06B or 19.06C. In this regard, the listed issuer must determine whether or not to consult with its Compliance Adviser and/or its financial, legal or other professional advisers. Listed issuers, Compliance Advisers or other advisers which are in any doubt as to the application of the requirements in this Chapter should consult the Exchange at an early stage.

          Note: Refer to rule 6A.23 regarding when a listed issuer is required to consult with and, if necessary, seek advice from its Compliance Adviser.

        • 19.06

          The transaction classification is made by using the percentage ratios set out in rule 19.07. The classifications are:—

          (1) share transaction— an acquisition of assets (excluding cash) by a listed issuer where the consideration includes securities for which listing will be sought and where all percentage ratios are less than 5%;
          (2) discloseable transaction— a transaction or a series of transactions (aggregated under rules 19.22 and 19.23) by a listed issuer where any percentage ratio is 5% or more, but less than 25%;
          (3) major transaction— a transaction or a series of transactions (aggregated under rules 19.22 and 19.23) by a listed issuer where any percentage ratio is 25% or more, but less than 100% for an acquisition or 75% for a disposal;
          (4) very substantial disposal— a disposal or a series of disposals (aggregated under rules 19.22 and 19.23) of assets (including deemed disposals referred to in rule 19.29) by a listed issuer where any percentage ratio is 75% or more;
          (5) very substantial acquisition— an acquisition or a series of acquisitions (aggregated under rules 19.22 and 19.23) of assets by a listed issuer where any percentage ratio is 100% or more.

        • Provisions to deter circumvention of new listing requirements (19.06A)

          • 19.06A

            The Exchange may impose additional requirements where it considers the arrangements of a listed issuer represent an attempt to circumvent the new listing requirements under the GEM Listing Rules. These arrangements include circumstances set out below:

        • Reverse takeovers (19.06B)

          • 19.06B

            A reverse takeover is an acquisition or a series of acquisitions of assets by a listed issuer which, in the opinion of the Exchange, constitutes, or is part of a transaction and/or arrangement or series of transactions and/or arrangements which constitute, an attempt to achieve a listing of the acquisition targets (as defined in  rule 19.04(2A)) and a means to circumvent the requirements for new applicants as set out in Chapter 11.

            Notes:  
            1. Rule 19.06B is aimed at preventing acquisitions that represent an attempt to circumvent the new listing requirements. In applying this principle based test, the Exchange will normally take into account the following factors:
             
            (a) the size of the acquisition or series of acquisitions relative to the size of the issuer;
             
            (b) a fundamental change in the issuer's principal business;
             
            (c) the nature and scale of the issuer's business before the acquisition or series of acquisitions;
             
            (d) the quality of the acquisition targets;
             
            (e) a change in control (as defined in the Takeovers Code) or de facto control of the listed issuer (other than at the level of its subsidiaries);

            In assessing whether there has been a change in control or de facto control of the issuer, the Exchange will consider (i) any change in the controlling shareholder of the issuer; or (ii) any change in the single largest substantial shareholder who is able to exercise effective control over the issuer, as indicated by factors such as a substantial change to its board of directors and/or senior management.

            In circumstances involving an issue of convertible securities with a conversion restriction mechanism to avoid triggering a change in control under the Takeovers Code (i.e. restricted controvertible securities) to a vendor as the consideration for an acquisition, the Exchange will consider whether the issuance is a means to allow the vendor to effectively control the issuer;
             
            (f) other transactions or arrangements which, together with the acquisition or series of acquisitions, form a series of transactions or arrangements to list the acquisition targets.

            These transactions or arrangements may include changes in control/de facto control, acquisitions and/or disposals. The Exchange may regard acquisitions and other transactions or arrangements as a series if they take place in a reasonable proximity to each other (which normally refers to a period of 36 months or less) or are otherwise related.
             
              The Exchange will consider whether, taking the factors together, an issuer's acquisition or series of acquisitions constitute an attempt to list the acquisition targets and circumvent the new listing requirements.
             
            2. Without limiting the generality of rule 19.06B, the following transactions are normally reverse takeovers (the bright line tests):
             
            (a) an acquisition or a series of acquisitions (aggregated under rules 19.22 and 19.23) of assets constituting a very substantial acquisition where there is or which will result in a change in control (as defined in the Takeovers Code) of the listed issuer (other than at the level of its subsidiaries); or
             
            (b) acquisition(s) of assets from a person or a group of persons or any of his/their associates pursuant to an agreement, arrangement or understanding entered into by the listed issuer within 36 months of such person or group of persons gaining control (as defined in the Takeovers Code) of the listed issuer (other than at the level of its subsidiaries), where such gaining of control had not been regarded as a reverse takeover, which individually or together constitute(s) a very substantial acquisition. For the purpose of determining whether the acquisition(s) constitute(s) a very substantial acquisition, the lower of:
             
            (A) the latest published figures of the asset value, revenue and profits as shown in the listed issuer's accounts and the market value of the listed issuer at the time of the change in control, which must be adjusted in the manner set out in rules 19.16, 19.17,19.18 and 19.19, as applicable, up to the time of the change in control; and
             
            (B) the latest published figures of the asset value, revenue and profits as shown in the listed issuer's accounts and the market value of the listed issuer at the time of the acquisition(s), which must be adjusted in the manner set out in rules 19.16, 19.17, 19.18 and 19.19, as applicable,
             
              is to be used as the denominator of the percentage ratios.
             
              Rule 19.06B will apply irrespective of whether any general offer obligations under the Takeovers Code have been waived.

        • Extreme transactions (19.06C)

          • 19.06C

            An “extreme transaction” is an acquisition or a series of acquisitions of assets by a listed issuer, which individually or together with other transactions or arrangements, may, by reference to the factors set out in Note 1 to rule 19.06B, have the effect of achieving a listing of the acquisition targets, but where the issuer can demonstrate that it is not an attempt to circumvent the requirements for new applicants set out in Chapter 11 of the GEM Listing Rules and that:
             
            (1)      (a) the issuer (other than at the level of its subsidiaries) has been under the control or de facto control (by reference to the factors set out in Note 1(e) to rule 19.06B) of a person or group of persons for a long period (normally not less than 36 months), and the transaction would not result in a change in control or de facto control of the issuer; or
             
              (b) the issuer has been operating a principal business of a substantial size, which will continue after the transaction; and
             
            (2)      the acquisition targets meet the requirements of rule 11.06 and rule 11.12A (or rule 11.14) and the enlarged group meets all the new listing requirements in Chapter 11 of the GEM Listing Rules (except rule 11.12A).
             
              Note: Where the extreme transaction involves a series of transactions and/or arrangements and the acquisition targets cannot meet rules 11.12A(2) and/or (3) due to a change in their ownership and management solely as a result of the acquisition by the issuer, the Exchange may grant a waiver from strict compliance with these rules based on the facts and circumstances of the case. In considering a waiver of rule 11.12A(3), the Exchange will consider, among others, whether the issuer has the expertise and experience in the relevant business/industry of the acquisition targets to ensure the effective management and operation of the acquisition targets.

        • Large scale issue of securities (19.06D)

          • Restriction on disposals (19.06E)

            • 19.06D

              Where a listed issuer proposes a large scale issue of new securities (including any shares, warrants, options or convertible securities) for cash to acquire and/or develop a new business, which, in the opinion of the Exchange, is a means to circumvent the new listing requirements and to achieve a listing of that new business, the Exchange may refuse to grant listing approval for the shares to be issued.

              Note: This rule is an anti-avoidance provision to prevent circumvention of the new listing requirements. It is intended to apply to a large scale issue of securities for cash proposed by a listed issuer where there is, or which will result in, a change in control or de facto control of the issuer (by reference to the factors set out in Note 1(e) to rule 19.06B), and the proceeds are to be used to acquire and/or develop a new business that is expected to be substantially larger than the issuer’s existing principal business. The effect of the proposal is to achieve a listing of the new business that would not have otherwise met the new listing requirements.

              • 19.06E

                (1) A listed issuer may not carry out a disposal or distribution in specie (or a series of disposals and/or distributions in specie) of all or a material part of its existing business:-
                 
                (a) where there is a proposed change in control (as defined in the Takeovers Code) of the listed issuer (other than at the level of its subsidiaries); or
                 
                (b) for a period of 36 months from a change in control (as defined in the Takeovers Code),
                 
                unless the remaining group, or the assets acquired from the person or group of persons gaining such control or his/their associates and any other assets acquired by the listed issuer after such change in control, can meet the requirements of rule 11.12A (or rule 11.14).
                 
                (2) A disposal or distribution in specie (or a series of disposals and/or distributions in specie) by a listed issuer which does not meet the above requirement will result in the listed issuer being treated as a new listing applicant.
                 
                Note: The Exchange may apply this rule to a disposal or distribution in specie (or a series of disposals and/or distributions in specie) by a listed issuer of all or a material part of its existing business where (a) there is a proposed change in de facto control of the issuer (by reference to the factors set out in Note 1(e) to rule 19.06B); or (b) for a period of 36 months from such change, if the Exchange considers that the disposal(s) and/or distribution(s) in specie may form part of a series of arrangements to circumvent the new listing requirements. 

          • Percentage ratios (19.07-19.08)

            • 19.07

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

              (1) Assets ratio — the total assets which are the subject of the transaction divided by the total assets of the listed issuer (see in particular rules 19.09 to 19.12, 19.16, 19.18 and 19.19);
              (2) Profits ratio — the profits attributable to the assets which are the subject of the transaction divided by the profits of the listed issuer (see in particular rules 19.13 and 19.17);
              (3) Revenue ratio — the revenue attributable to the assets which are the subject of the transaction divided by the revenue of the listed issuer (see in particular rules 19.14 and 19.17);
              (4) Consideration ratio — the consideration divided by the total market capitalisation of the listed issuer. The total market capitalisation is the average closing price of the listed issuer's securities as stated in the Exchange's daily quotations sheets for the five business days immediately preceding the date of the transaction (see in particular rule 19.15); and
              (5) Equity capital ratio — the number of shares to be issued by the listed issuer as consideration divided by the total number of the listed issuer's issued shares immediately before the transaction.

              Notes:

              1. The numerator includes shares that may be issued upon conversion or exercise of any convertible securities or subscription rights to be issued or granted by the listed issuer as consideration.

              2. The listed issuer's debt capital (if any), including any preference shares, shall not be included in the calculation of the equity capital ratio.


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

            • 19.08

              The table below summarises the classification and percentage ratios resulting from the calculations set out in rule 19.07. However, listed issuers should refer to the relevant rules for the specific requirements.

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

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

          • Assets (19.09-19.12)

            • 19.09

              Where the asset being acquired or disposed of constitutes equity capital, the listed issuer must take into account the matters referred to in rules 19.25 to 19.32 when calculating the amount of total assets which are the subject of the transaction.

            • 19.10

              Where the equity capital to be acquired or disposed of by the listed issuer is listed on the Main Board or GEM, the total assets which are the subject of the transaction must be adjusted in the manner set out in rules 19.16, 19.18 and 19.19.

            • 19.11

              Where a listed issuer which is a property company, shipping company or aircraft company acquires or disposes of properties, vessels or aircraft respectively, the aggregate value (on an unencumbered basis) of the properties, vessels or aircraft (as the case may be) being acquired or realised will be compared with the total assets of the listed issuer which must be adjusted in the manner set out in rules 19.16, 19.18 and 19.19 or the latest published valuation (on an unencumbered basis) of the properties, vessels or aircraft (as the case may be) if such valuation is published after the issue of accounts of the listed issuer, where appropriate.

            • 19.12

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

          • Profits (19.13)

            • 19.13

              Profits mean net profits after deducting all charges except taxation and before non-controlling interests (See also rule 19.17). In the case of an acquisition or disposal of assets (other than equity capital) through a non wholly-owned subsidiary, the profits attributable to the assets acquired or disposed of (and not the listed issuer's proportionate interest in such profits) will form the numerator for the purpose of the profits ratio.

          • Revenue (19.14)

            • 19.14

              "Revenue" normally means revenue arising from the principal activities of a company and does not include those items of revenue and gains that arise incidentally. In the case of any acquisition or disposal of assets (other than equity capital) through a non wholly-owned subsidiary, the revenue attributable to the assets being acquired or realised (and not the listed issuer's proportionate interest in such revenue) will form the numerator for the purpose of the revenue ratio (See also rule 19.17).

          • Consideration (19.15)

            • 19.15

              When calculating the consideration ratio:—

              (1) the value of the consideration shall be the fair value of the consideration determined at the date of the agreement of the transaction in accordance with applicable accounting standards adopted for the preparation of the listed issuer's annual financial statements. Normally, the fair value of the consideration should be the same as the fair value of the asset which is the subject of the transaction. Where there is a significant disparity between the fair value of the consideration and the fair value of the asset, the listed issuer must use the higher of the fair value of the consideration and the fair value of the asset as the numerator of the consideration ratio;
              (2) where a transaction involves establishing a joint venture entity or other form of joint arrangement, the Exchange will aggregate:—
              (a) the listed issuer's total capital commitment (whether equity, loan or otherwise), including any contractual commitment to subscribe for capital; and
              (b) any guarantee or indemnity provided in connection with its establishment;
              Note: Where a joint venture entity or other form of joint arrangement is established for a future purpose, for example to develop a property, and the total capital commitment cannot be calculated at the outset, the Exchange will require the listed issuer to recalculate the relevant percentage ratios at the time when that purpose is carried out. The Exchange will look at the purpose of setting up the arrangement in terms of the initial transaction only. For example, the purpose could be the development of the property for which the arrangement was established. The Exchange will not look at subsequent transactions entered into under the arrangement for the purpose of calculating the total capital commitment in relation to the establishment of the arrangement.
              (3) a listed issuer shall add any liabilities of the vendors, whether actual or contingent, to be discharged or assumed by the purchaser under the terms of the transactions, to the consideration. The Exchange may require that further amounts be included as it considers appropriate;
              (4) if the listed issuer may pay or receive consideration in the future, the consideration is the maximum total consideration payable or receivable under the agreement; and
              (5) in the case of any acquisition or disposal through a non wholly-owned subsidiary, the consideration (and not, for the avoidance of doubt, the listed issuer's proportionate interest in such consideration) will form the numerator for the purpose of the consideration ratio.

          • Figures used in total assets, profits and revenue calculations (19.16-19.19)

            • 19.16

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

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

              Note: Rule 19.16(2) will normally apply to a valuation of assets such as properties, vessels and aircraft.

            • 19.17

              The profits (see rule 19.13) and revenue (see rule 19.14) figures to be used by a listed issuer for the basis of the profits ratio and revenue ratio must be the figures shown in its accounts. Where a listed issuer has discontinued one or more of its operating activities during the previous financial year and has separately disclosed the profits and revenue from the discontinued operations in its accounts in accordance with applicable accounting standards adopted for the preparation of its annual financial statements, the Exchange may be prepared to accept the exclusion of such profits and revenue for the purpose of the profits ratio and revenue ratio respectively.

            • 19.18

              The value of transactions or issues of securities by the listed issuer in respect of which adequate information has al been published and made available to shareholders in accordance with the GEM Listing Rules and which have been completed must be included in the total assets of the listed issuer.

            • 19.19

              In calculating total assets, the Exchange may require the inclusion of further amounts where contingent assets are involved.

              Note: Contingent assets normally refer to assets that will have to be acquired by a listed issuer pursuant to an agreement upon occurrence or non-occurrence of certain event(s) after the listed issuer has entered into the agreement. Such event(s) is/are normally beyond the control of the listed issuer and the parties to the transaction. Contingent assets must be determined in accordance with applicable accounting standards adopted for the preparation of the listed issuer's annual financial statements.

          • Exceptions to the classification rules (19.20)

            • 19.20

              Where any calculation of the percentage ratio produces an anomalous result or is inappropriate to the sphere of activity of the listed issuer, the listed issuer may apply to the Exchange to disregard the calculation and/or apply other relevant indicators of size, including industry specific tests. The listed issuer must seek prior consent of the Exchange if it wishes to apply this rule and must provide alternative test(s) which it considers appropriate to the Exchange for consideration. The Exchange may also require the listed issuer to apply other size test(s) that the Exchange considers appropriate. 

          • Change in percentage ratios (19.21)

            • 19.21

              If any of the percentage ratios changes to the extent that the classification of the transaction is altered between the time that any transaction is first discussed with the Exchange (if applicable) and the time of its announcement, the listed issuer must inform the Exchange. The listed issuer must comply with the relevant requirements applicable to the transaction at the time of the announcement.

          • Aggregation of transactions (19.22-19.23B)

            • 19.22

              In addition to the aggregation of transactions under rules 19.06B, 19.06C and 19.06E, the Exchange may require listed issuers to aggregate a series of transactions and treat them as if they were one transaction if they are all completed within a 12 month period or are otherwise related. In such cases, the listed issuer must comply with the requirements for the relevant classification of the transaction when aggregated and the figures to be used for determining the percentage ratios are those as shown in its accounts or latest published half-year, quarterly or other interim report (whichever is more recent), subject to any adjustments or modifications arising by virtue of the provisions of rules 19.16, 19.18 and 19.19

            • 19.23

              Factors which the Exchange will take into account in determining whether transactions will be aggregated include whether the transactions:—

              (1) are entered into by the listed issuer with the same party or with parties connected or otherwise associated with one another;
              (2) involve the acquisition or disposal of securities or an interest in one particular company or group of companies;
              (3) involve the acquisition or disposal of parts of one asset; or
              (4) together lead to substantial involvement by the listed issuer in a business activity which did not previously form part of the listed issuer's principal business activities.

            • 19.23A

              Where an asset is being constructed, developed or refurbished by or on behalf of a listed issuer for its own use in its ordinary and usual course of business (as referred to in rule 19.04(8)), the Exchange will not normally aggregate a series of transactions carried out by the listed issuer in the course of the construction, development or refurbishment of such asset as if they were one transaction where the sole basis for aggregation is rule 19.23(3). In cases of doubt, the listed issuer should consult the Exchange at an early stage.

            • 19.23B

              For the purposes of aggregating transactions under rule 19.06(6)(b) and/or rule 19.22, a listed issuer must consult the Exchange before it enters into any proposed transaction(s) if

              (1) any circumstances described in rule 19.23 exist in respect of such proposed transaction(s) and any other transaction(s) entered into by the listed issuer in the preceding 12-month period (except for the situation described in rule 19.23A); or
              (2) the proposed transaction(s) and any other transaction(s) entered into by the listed issuer involve acquisitions of assets from a person or group of persons or any of his/their associates within 24 months of such person or group of persons gaining control (as defined in the Takeovers Code) of the listed issuer (other than at the level of its subsidiaries).

              The listed issuer must provide details of the transactions to the Exchange to enable it to determine whether the transactions will be aggregated.

              Note: This rule serves to set out certain specific circumstances where the listed issuer must seek guidance from the Exchange before it enters into any proposed transaction(s). The Exchange may nevertheless aggregate transactions pursuant to rule 19.22 and/or rule 19.06(6)(b) where no prior consultation was made by the listed issuer under rule 19.23B.

          • Transaction involving an acquisition and a disposal (19.24)

            • 19.24

              In the case of a transaction involving both an acquisition and a disposal, the Exchange will apply the percentage ratios to both the acquisition and the disposal. The transaction will be classified by reference to the larger of the acquisition or disposal, and subject to the reporting, disclosure and/or shareholder approval requirements applicable to that classification. Where a circular is required, each of the acquisition and the disposal will be subject to the content requirements applicable to their respective transaction classification.

          • Interpretation of the classification rules in circumstances where the listed issuer or a subsidiary acquires or realises equity capital (19.25-19.28)

            • 19.25

              In circumstances where acquisitions or disposals of equity capital are made by a listed issuer, the provisions set out in rules 19.26 to 19.28 shall be applied in determining the classification of the transaction for the purposes of rule 19.06.

            • 19.26

              In an acquisition or disposal of equity capital, the numerators for the purposes of the (a) assets ratio, (b) profits ratio and (c) revenue ratio are to be calculated by reference to the value of the total assets, the profits attributable to such capital and the revenue attributable to such capital, respectively.

            • 19.27

              For the purpose of rule 19.26:

              (1) the value of an entity's total assets is the higher of:
              (a) the book value of the entity's total assets attributable to the entity's capital as disclosed in its accounts; and
              (b) the book value referred to in rule 19.27(1)(a) adjusted for the latest published valuation of the entity's assets if such valuation is published after the issue of its accounts; and

              Note: This will normally apply to a valuation of assets such as properties, vessels and aircraft.
              (2) the value of an entity's profits and revenue is the profits and revenue attributable to the entity's capital as disclosed in its accounts.

            • 19.28

              The value of the entity's total assets, profits and revenue, calculated in accordance with rule 19.27, is to be multiplied by the percentage of the equity interest being acquired or disposed of by the listed issuer. However, 100% of the entity's total assets, profits and revenue will be taken as the value of the total assets, profits and revenue, irrespective of the size of the interest being acquired or disposed of, if:

              (1) the acquisition will result in consolidation of the assets of the entity in the accounts of the listed issuer; or
              (2) the disposal will result in the assets of the entity no longer being consolidated in the accounts of the listed issuer.
              Note: For example:—
              • if a listed issuer (or subsidiary, whether wholly-owned or not) acquires 10% of the equity capital of an entity and has no prior holding in that entity, the relevant numerator will be 10%;
              • if a listed issuer (or subsidiary, whether wholly-owned or not) acquires a further 10% interest in a subsidiary which is al consolidated in the listed issuer's accounts, the relevant numerator will be 10%; and
              • if a listed issuer (or subsidiary, whether wholly-owned or not) acquires a 10% interest in an entity which will result in that entity being consolidated in the accounts of the listed issuer, the relevant numerator will be 100%.

          • Deemed disposals (19.29-19.32)

            • 19.29

              Allotments of share capital by a subsidiary of a listed issuer, whether or not such subsidiary is consolidated in the accounts of the listed issuer, may result in a reduction of the percentage equity interest of the listed issuer in such subsidiary. Such allotments give rise to deemed disposals. Profits or losses may be recorded on such transactions and such transactions may also fall to be treated as very substantial disposals, major or discloseable or connected transactions. Rules 19.30 to 19.32 set out how the percentage ratios are applied to such transactions.

            • 19.30

              Where a subsidiary of the listed issuer (whether or not consolidated in the accounts of the listed issuer, whether or not wholly-owned and whether held directly or indirectly):

              (1) allots shares; and
              (2) after the allotment, the subsidiary will continue to be a subsidiary,

              the percentage by which the interest is reduced will be multiplied by the subsidiary's total assets, profit and revenue as disclosed in the accounts of the subsidiary allotting shares and that shall be taken as the respective numerators for the purpose of the assets ratio, profits ratio, revenue ratio and de minimis ratio.

              Note: For example, if the interest is reduced from 90% to 80%, then 10% of the subsidiary's total assets, profits and revenue will form the respective numerators for the assets ratio, profits ratio, revenue ratio and de minimis ratio.

            • 19.31

              Where a subsidiary of the listed issuer (whether or not consolidated in the accounts of the listed issuer, whether or not wholly-owned and whether held directly or indirectly) allots shares such that, after the allotment, the subsidiary will cease to be a subsidiary, 100% of the subsidiary's total assets, profits and revenue will form the respective numerators for the assets ratio, profits ratio, revenue ratio and de minimis ratio.

              Note: For example, if the interest is reduced from 60% to 40% and the subsidiary ceases to be a subsidiary, then 100% of the entity's total assets, profits and revenue will form the respective numerators for the assets ratio, profits ratio, revenue ratio and de minimis ratio.

            • 19.32

              Where a subsidiary of the listed issuer (whether or not consolidated in the accounts of the listed issuer, whether or not wholly-owned and whether held directly or indirectly) allots shares, it is necessary to calculate a value for the purpose of the consideration ratio. This is taken as the value of the shares issued to allottees (that are not part of the listed group) and is restricted to only those shares issued which are in excess of those necessary to maintain the allottees' relative percentage interest in the subsidiary.

      • Notification, publication and shareholders' approval requirements

        • 19.33

          The table below summarises the notification, publication and shareholders' approval requirements which will generally apply to each category of notifiable transaction. However, listed issuers should refer to the relevant rules for the specific requirements.

            Notification to Exchange Publication of an announcement on GEM website Circular to shareholders Shareholders' approval Accountants report
          Share transaction Yes Yes No No1 No
          Discloseable transaction Yes Yes No No No
          Major transaction Yes Yes Yes Yes2 Yes3
          Very substantial disposal Yes Yes Yes Yes2 No5
          Very substantial acquisition Yes Yes Yes Yes2 Yes4
          Reverse takeover Yes Yes Yes Yes2, 6 Yes4

          Notes:

          1 No shareholder approval is necessary if the consideration shares are issued under a general mandate. However, if the shares are not issued under a general mandate, the listed issuer is required, pursuant to rule 17.41(2), to obtain shareholders' approval in general meeting prior to the issue of the consideration shares.
          2 Any shareholder and his close associates must abstain from voting if such shareholder has a material interest in the transaction.
          3 An accountants' report on the business, company or companies being acquired is required (see also rules 7.05 and 19.67(6)).
          4 An accountants' report on any business, company or companies being acquired is required (see also rules 7.05 and 19.69(4)).
          5 A listed issuer may at its option include an accountants' report (see note 1 to rule 19.68(2)(a)(i)).
          6 Approval of the Exchange is necessary.

        • Exemptions for Qualified Property Acquisitions which constitute major transactions or very substantial acquisitions (19.33A-19.33B)

          • 19.33A

            A Qualified Property Acquisition which constitutes a major transaction or very substantial acquisition is exempt from shareholders' approval if:

            (1) it is undertaken on a sole basis by a Qualified Issuer in its ordinary and usual course of business; or
            (2) it is undertaken by a Qualified Issuer and other party or parties on a joint basis and:
            (a) the project will be single purpose, relating to the acquisition and/or development of a specific property and consistent with the purpose specified in the auction or tender document;
            (b) each joint venture arrangement must be on an arm's length basis and on normal commercial terms;
            (c) the joint venture agreement contains clause(s) to the effect that the joint venture may not, without its partners' unanimous consent:
            (i) change the nature or scope of its business, and if there are changes then they must still be consistent with the scope or purpose specified in the auction or tender document; or
            (ii) enter into any transactions which are not on an arm's length basis; and
            (d) the Qualified Issuer's board has confirmed that the Qualified Property Acquisition is in the Qualified Issuer's ordinary and usual course of business; and that the Qualified Property Acquisition and the joint venture, including its financing and profit distribution arrangements, are on normal commercial terms, fair and reasonable and in the interests of the Qualified Issuer and its shareholders as a whole.

          • 19.33B

            (1) The Qualified Issuer must publish an announcement as soon as possible after notification of the success of a bid by it or the joint venture for a Qualified Property Acquisition falling under rule 19.33A and send a circular to its shareholders.
            (2) The announcement and circular must contain:
            (a) details of the acquisition;
            (b) details of the joint venture, if any, including
            (i) the joint venture's terms and status;
            (ii) its dividend and distribution policy; and
            (iii) the joint venture's financial and capital commitment and the Qualified Issuer's share in it; and
            (c) information to demonstrate that the conditions in rule 19.33A(1) or (2) were met.
            Note: If any of these details are not available when the issuer publishes the initial announcement, it must publish subsequent announcement(s) to disclose the details as soon as possible after they have been agreed or finalised,
            (3) The announcement and circular requirements under chapter 19 apply to the acquisition and the joint venture, if any, according to the transaction classification, except that the information circular need not contain a valuation report on the property under the Qualified Property Acquisition.

        • Exemptions for Qualified Aircraft Leasing Activities which constitute notifiable transactions (19.33C-19.33D)

          • 19.33C

            A Qualified Aircraft Leasing Activity is exempt from the announcement, circular and/or shareholders' approval requirements for notifiable transactions provided that:

            (1) it is undertaken by a Qualified Aircraft Lessor in its ordinary and usual course of business;
            (2) the Qualified Aircraft Lessor's board has confirmed that:
            (a) the transaction is entered into by the lessor in its ordinary and usual course of business and on normal commercial terms; and
            (b) the terms of transaction are fair and reasonable and in the interests of the lessor and its shareholders as a whole; and
            (3) the Qualified Aircraft Lessor complies with the disclosure requirements under rule 19.33D.

          • 19.33D

            Where a Qualified Aircraft Leasing Activity is exempt from the announcement, circular and/or shareholders' approval requirements for notifiable transactions under rule 19.33C:

            (1) the Qualified Aircraft Lessor must publish an announcement as soon as possible after the terms of the transaction have been finalised. The announcement must contain:
            (a) the date of the transaction;
            (b) the identities and a description of the principal business activities of the parties to the transaction. The lessor must also confirm that the parties to the transaction and their ultimate beneficial owners are third parties independent of the lessor and its connected persons;
            (c) a description of the transaction and the aircraft which is the subject of the transaction (including the expected year of delivery of the aircraft in the case of an acquisition); and
            (d) a confirmation by the lessor's board of directors that the lessor has fulfilled (i) the criteria set out in rule 19.04(10E) and (ii) the conditions set out in rule 19.33C(2); and
            (2) the Qualified Aircraft Lessor must also disclose the following information in its next interim report (where applicable) and annual report:
            (a) the aggregate number of aircraft owned by the lessor as at the end of the reporting period with a breakdown by aircraft model, and the aggregate net book value of the aircraft;
            (b) the aggregate number of aircraft committed to purchase as at the end of the reporting period with a breakdown by aircraft model, and the commitment amounts for future commitments;
            (c) the aggregate number of aircraft sold for the reporting period;
            (d) the aggregate net book value and the aggregate net gain or loss on disposal of aircraft for the reporting period; and
            (e) the average lease rental yield of each of (i) the operating lease business and (ii) the finance lease business in relation to aircraft leasing for the reporting period.

      • Requirements for all transactions

        • Notification and announcement (19.34-19.36A)

          • 19.34

            As soon as possible after the terms of a share transaction, discloseable transaction, major transaction, very substantial disposal, very substantial acquisition, extreme transaction or reverse takeover have been finalised, the listed issuer must in each case:—

            (1) [Repealed 1 March 2019]
            (2) submit an announcement to the Exchange to be published on the GEM website as soon as possible. See also rule 19.37.

          • 19.35

            For a share transaction, the announcement must contain the information set out in rules 19.58 and 19.59. For a discloseable transaction, major transaction, very substantial disposal, very substantial acquisition, extreme transaction or reverse takeover, the announcement must contain at least the information set out in rules 19.58 and 19.60. In all cases, listed issuers must also include any additional information requested by the Exchange.

          • 19.36

            Where a transaction previously announced pursuant to this Chapter is terminated or there is any material variation of its terms or material delay in the completion of the agreement, the listed issuer must as soon as practicable announce this fact by means of an announcement. This requirement is without prejudice to the generality of any other provisions of the GEM Listing Rules and the listed issuer must, where applicable, also comply with such provisions.

          • 19.36A

            Where there is expected to be delay in despatch of the circular by the date previously announced under rule 19.60(7) or this rule, the listed issuer must as soon as practicable disclose this fact by way of an announcement stating the reason for the delay and the new expected date of despatch of the circular.

        • Trading halt and suspension of dealings (19.37)

          • 19.37

            (1) [Repealed 1 August 2018]
            (2) [Repealed 1 August 2018]
            (3) An issuer that has finalised the major terms of an agreement in respect of a notifiable transaction which it reasonably believes would require disclosure under the Inside Information Provisions must ensure confidentiality of the relevant information until making the required announcement. Where the issuer considers that the necessary degree of security cannot be maintained or that the security may have been breached, it must make an announcement or immediately apply for a trading halt or a trading suspension pending the announcement.
            (4) Directors of issuers must, under rule 17.07A, maintain confidentiality of information that is likely to be inside information, until it is announced.
            (5) In the case of a reverse takeover, suspension of dealings in the issuer's securities must continue until the issuer has announced sufficient information. Whether the amount of information disclosed in the announcement is sufficient or not is determined on a case-by-case basis.

        • Guaranteed profits or net assets (19.36B)

          • 19.36B

            This rule applies to any notifiable transaction where the listed issuer acquires a company or business from a person and that person guarantees the profits or net assets or other matters regarding the financial performance of the company or business.

            (1) The listed issuer must disclose by way of an announcement any subsequent change to the terms of the guarantee and the reason therefor, and whether the issuer’s board of directors considers that such change is fair and reasonable and in the interests of the shareholders as a whole.
             
            (2) If the actual performance fails to meet the guarantee (or where applicable, the guarantee as amended), the listed issuer must disclose the following by way of an announcement:
             
            (a) the shortfall, and any adjustment in the consideration for the transaction or other consequence under the guarantee;
             
            (b) whether the person has fulfilled its obligations under the guarantee;
             
            (c) whether the listed issuer has exercised any option to sell the company or business back to the person or other rights it held under the terms of the guarantee, and the reasons for its decision; and
             
            (d) the board of directors’ opinion on:
             
            (i) whether the person has fulfilled its obligations; and
             
            (ii) whether the decision of the listed issuer to exercise or not to exercise any options or rights set out in rule 19.36B(2)(c) is fair and reasonable and in the interests of the shareholders as a whole.
             
            (3) The listed issuer must disclose whether the actual performance of the company or business acquired meets the guarantee in its next annual report.

      • Additional requirements for major transactions

        • Circular (19.38-19.39)

          • 19.38

            In addition to the requirements for all transactions set out in rule 19.34 to 19.37, a listed issuer which has entered into a major transaction must send a circular to its shareholders and the Exchange and arrange for its publication in accordance with the provisions of Chapter 16.

          • 19.39 [Repealed]

            [Repealed 1 January 2009]

        • Shareholders' approval (19.40-19.43)

          • 19.40

            A major transaction must be made conditional on approval by shareholders.

          • 19.41

            The circular must be despatched to the shareholders of the listed issuer:

            (a) if the transaction is approved or is to be approved by way of written shareholders' approval from a shareholder or a closely allied group of shareholders under rule 19.44, within 15 business days after publication of the announcement; or
            (b) if the transaction is to be approved by shareholders at a general meeting, at the same time as or before the listed issuer gives notice of the general meeting to approve the transaction.

            The circular shall contain information required under rules 19.63, 19.66, 19.67 (for an acquisition only) and 19.70 (for a disposal only).

          • 19.42

            A listed issuer shall despatch to its shareholders any revised or supplementary circular and/or provide any material information that has come to the attention of the directors after the issue of the circular (by way of announcement) on the transaction to be considered at a general meeting not less than 10 business days before the date of the relevant general meeting.

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

          • 19.43

            The meeting must be adjourned before considering the relevant resolution to ensure compliance with the 10 business day requirement under rule 19.42 by the chairman or, if that is not permitted by the listed issuer's constitutional documents, by resolution to that effect (see also rule 17.47B).

        • Methods of approval (19.44-19.47)

          • 19.44

            Shareholders' approval for a major transaction shall be given by a majority vote at a general meeting of the shareholders of the issuer unless all the following conditions are met, in which case written shareholders' approval may, subject to rule 19.86, be accepted in lieu of holding a general meeting:—

            (1) no shareholder is required to abstain from voting if the issuer were to convene a general meeting for the approval of the transaction; and
            (2) the written shareholders' approval has been obtained from a shareholder or a closely allied group of shareholders who together hold more than 50% of the voting rights at that general meeting to approve the transaction. Where a listed issuer discloses inside information to any shareholder in confidence to solicit the written shareholders' approval, the listed issuer must be satisfied that such shareholder is aware that he must not deal in the listed issuer's securities before such information has been made available to the public.

          • 19.45

            To determine whether a group of shareholders constitutes a "closely allied group of shareholders", the Exchange will take into account the following factors:—

            (1) the number of persons in the group;
            (2) the nature of their relationship including any past or present business association between two or more of them;
            (3) the length of time each of them has been a shareholder;
            (4) whether they would together be regarded as "acting in concert" for the purposes of the Takeovers Code; and
            (5) the way in which they have voted in the past on shareholders' resolutions other than routine resolutions at an annual general meeting.

            It is the listed issuer's responsibility to provide sufficient information to the Exchange to demonstrate that the group of shareholders is a "closely allied group" of shareholders.

          • 19.46

            The Exchange will require any shareholder and his close associates to abstain from voting at the relevant general meeting on the relevant resolution(s) if such shareholder has a material interest in the transaction and will not accept written approval for the transaction.

          • 19.47 [Repealed]

            [Repealed 1 January 2009]

      • Additional requirements for very substantial disposals and very substantial acquisitions

        • 19.48

          In the case of a very substantial disposal or a very substantial acquisition, the listed issuer must comply with the requirements for all transactions and for major transactions set out in rules 19.34 to 19.38 and 19.41.

        • 19.49

          A very substantial disposal and a very substantial acquisition must be made conditional on approval by shareholders in general meeting. No written shareholders' approval will be accepted in lieu of holding a general meeting. The Exchange will require any shareholder and his close associates to abstain from voting at the relevant general meeting on the relevant resolution(s) if such shareholder has a material interest in the transaction.

        • 19.50 [Repealed]

          [Repealed 1 January 2009]

        • 19.51

          The circular must be despatched to the shareholders of the listed issuer at the same time as or before the listed issuer gives notice of the general meeting to approve the transaction referred to in the circular. The circular must contain the information required under rules 19.63, 19.68 (for a very substantial disposal) and 19.69 (for a very substantial acquisition).

        • 19.52

          A listed issuer shall despatch to its shareholders any revised or supplementary circular and/or provide any material information that has come to the attention of the directors after the issue of the circular (by way of announcement) on the transaction to be considered at a general meeting not less than 10 business days before the date of the relevant general meeting.

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

        • 19.53

          The meeting must be adjourned before considering the relevant resolution to ensure compliance with the 10 business day requirement under rule 19.52 by the chairman or, if that is not permitted by the listed issuer's constitutional documents, by resolution to that effect (see also rule 17.47B).

      • Additional requirements for extreme transactions

        • 19.53A

          In the case of an extreme transaction, the listed issuer must: 

          (1) comply with the requirements for very substantial acquisitions set out in rules 19.48 to 19.53. The circular must contain the information required under rules 19.63 and 19.69; and
           
          Note: See also rule 19.57A if the extreme transaction involves a series of transactions and/or arrangements.
           
          (2) appoint a financial adviser to perform due diligence on the acquisition targets to put itself in a position to be able to make a declaration in the prescribed form set out in Appendix 21. The financial adviser must submit to the Exchange the declaration before the bulk-printing of the circular for the transaction.
           
          Note: See also rules 17.99A to 17.99C for the requirements relating to financial advisers.

           

      • Additional requirements for reverse takeovers

        • 19.54

          The Exchange will treat a listed issuer proposing a reverse takeover as if it were a new listing applicant.
           
          (1)    The acquisition targets must meet the requirements of rule 11.06 and rule 11.12A (or rule 11.14). In addition, the enlarged group must meet all the new listing requirements set out in Chapter 11 of the GEM Listing Rules (except rule 11.12A).
           
          (2) Where the reverse takeover is proposed by a listed issuer that has failed to comply with rule 17.26, the acquisition targets must also meet the requirement of rule 11.22A (in addition to the requirements for the acquisition targets and the enlarged group set out in rule 19.54(1)).
           
          (3) The listed issuer must comply with the requirements for all transactions set out in rules 19.34 to 19.37.
           
          Notes:
           
          1. For the purposes of (1) and (2) above, if the Exchange is aware of information suggesting that the reverse takeover is to avoid any new listing requirement, the listed issuer must demonstrate that the acquisition targets meet all the new listing requirements set out in Chapter 11 of the GEM Listing Rules.
           
          2. See also rule 19.57A if the reverse takeover involves a series of transactions and/or arrangements.
           
          3. Where the reverse takeover involves a series of transactions and/or arrangements and the acquisition targets cannot meet rule 11.12A(2) and/or (3) due to a change in their ownership and management solely as a result of the acquisition by the issuer, the Exchange may grant a waiver from strict compliance with these rules based on the facts and circumstances of the case. In considering a waiver of rule 11.12A(3), the Exchange will consider, among others, whether the issuer has the expertise and experience in the relevant business/industry of the acquisition targets to ensure the effective management and operation of the acquisition targets.

        • 19.55

          A reverse takeover must be made conditional on approval by shareholders in general meeting. No written shareholders' approval will be accepted in lieu of holding a general meeting. The Exchange will require any shareholder and his close associates to abstain from voting at the relevant general meeting on the relevant resolution(s) if such shareholder has a material interest in the transaction. Furthermore, where there is a change in control of the listed issuer as referred to in rule 19.06(6) and any person or group of persons will cease to be a controlling shareholder (the "outgoing controlling shareholder") by virtue of a disposal of his shares to the person or group of persons gaining control (the "incoming controlling shareholder"), any of the incoming controlling shareholder's close associates or an independent third party, the outgoing controlling shareholder and his close associates may not vote in favour of any resolution approving an injection of assets by the incoming controlling shareholder or his close associates at the time of the change in control.

          Note: The prohibition against the outgoing controlling shareholder and his close associates voting in favour of a resolution approving an injection of assets does not apply where the decrease in the outgoing controlling shareholder's shareholding is solely the result of a dilution through the issue of new shares to the incoming controlling shareholder rather than any disposal of shares by the outgoing controlling shareholder.

        • 19.56 [Repealed]

          [Repealed 1 January 2009]

        • 19.57

          A listed issuer proposing a reverse takeover must comply with the procedures and requirements from new listing applications as set out in Chapter 12. The listed issuer will be required, among other things, to issue a listing document and pay the non-refundable initial listing fee. A listing document relating to a reverse takeover must contain the information required under rules 19.63 and 19.69. The listing document must be despatched to the shareholders of the listed issuer at the same time as or before the listed issuer gives notice of the general meeting to approve the transaction. The listed issuer must state in the announcement on the reverse takeover when it expects the listing document to be issued.

      • Additional requirements for extreme transactions and reverse takeovers

        • 19.57A

          Where an extreme transaction or reverse takeover involves a series of transactions and/or arrangements: - 

          (1) the track record period of the acquisition targets normally covers the two financial years immediately prior to the issue of the circular or listing document for the latest proposed transaction of the series; and.
           
          (2) the listed issuer must provide sufficient information to the Exchange to demonstrate that the acquisition targets can meet the requirements under rule 11.12A (or rule 11.14) (see rule 19.06C(2) or 19.54).

      • Contents of announcements

        • All transactions (19.58)

          • 19.58

            The announcement of a share transaction, discloseable transaction, major transaction, very substantial disposal, very substantial acquisition, extreme transaction or reverse takeover must contain at least the following information:—
             
            (1)    a prominent and legible disclaimer at the top of the announcement in the form set out in rule 2.19;
             
            (2) a statement of responsibility and confirmation on the part of the directors in the form set out in rule 2.18;
             
            (3) a description of the principal business activities carried on by the listed issuer and the identity and a description of the principal business activities of the counterparty;
             
            (4) the date of the transaction. The listed issuer must also confirm that, to the best of the directors' knowledge, information and belief having made all reasonable enquiry, the counterparty and the ultimate beneficial owner of the counterparty are third parties independent of the listed issuer and connected persons of the listed issuer;
             
            (5) the aggregate value of the consideration, how it is being or is to be satisfied and details of the terms of any arrangements for payment on a deferred basis. If the consideration includes securities for which listing will be sought, the listed issuer must also include the amounts and details of the securities being issued;
             
              Note:    Where the transaction involves an acquisition of aircraft from an aircraft manufacturer by a listed issuer principally engaged in airline operations and the acquisition is in the issuer’s ordinary and usual course of business, the Exchange may waive the requirement of disclosing the aggregate value of the consideration if there are contractual confidentiality restrictions from disclosing the actual consideration for the aircraft. In this case, the issuer must disclose:
             
                (a)    the reasons for its waiver application and provide alternative disclosure (including the list price of the aircraft, a description of any price concession received, whether the price concession received is comparable to that obtained in previous purchases and whether the concession has any material impact on the issuer’s future operating costs as a whole) in the announcement and, where applicable, the circular for the transaction; and
             
                (b)    the following information in its next interim report (where applicable) and annual report:
             
                  (i)    the aggregate number of aircraft owned as at the end of the reporting period with a breakdown by aircraft model, and the aggregate net book value of the aircraft; and
             
                  (ii)    the aggregate number of aircraft committed to purchase as at the end of the reporting period with a breakdown by aircraft model, and the commitment amounts for future commitments.
             
            (6) the basis upon which the consideration was determined;
             
            (7) the value (book value and valuation, if any) of the assets which are the subject of the transaction;
             
            (8) where applicable, the net profits (both before and after taxation) attributable to the assets which are the subject of the transaction for the two financial years immediately preceding the transaction;
             
            (9) the reasons for entering into the transaction, the benefits which are expected to accrue to the listed issuer as a result of the transaction and a statement that the directors believe that the terms of the transaction are fair and reasonable and in the interests of the shareholders as a whole; and
             
            (10) where appropriate, details of any guarantee and/or other security given or required as part of or in connection with the transaction.

        • Share transaction announcements (19.59)

          • 19.59

            In addition to the information set out in rule 19.58, the announcement for a share transaction must contain at least the following information:—

            (1) the amount and details of the securities being issued including details of any restrictions which apply to the subsequent sale of such securities;
            (2) brief details of the asset(s) being acquired, including the name of any company or business or the actual assets or properties where relevant and, if the assets include securities, the name and general description of the activities of the company in which the securities are or were held;
            (3) if the transaction involves an issue of securities of a subsidiary of the listed issuer, a declaration as to whether the subsidiary will continue to be a subsidiary of the listed issuer following the transaction;
            (4) a statement that the announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities; and
            (5) a statement that application has been or will be made to the Exchange for the listing of and permission to deal in the securities.

        • Discloseable transaction, major transaction, very substantial disposal, very substantial acquisition, extreme transaction and reverse takeover announcements (19.60-19.60A)

          • 19.60

            In addition to the information set out in rule 19.58, the announcement of a discloseable transaction, major transaction, very substantial disposal, very substantial acquisition, extreme transaction or reverse takeover must contain at least brief details of the following:—

            (1) the general nature of the transaction including, where the transaction involves securities, details of any restrictions which apply to the subsequent sale of such securities;
            (2) brief details of the asset(s) being acquired or disposed of, including the name of any company or business or the actual assets or properties where relevant and, if the assets include securities, the name and general description of the activities of the company in which the securities are or were held;
            (3) in the case of a disposal:—
            (a) details of the gain or loss expected to accrue to the listed issuer and the basis for calculating this gain or loss. Where the listed issuer expects to recognise in its income statement a gain or loss different from the disclosed gain or loss, the reason for the difference must be explained. The gain or loss is to be calculated by reference to the carrying value of the assets in the accounts; and
            (b) the intended application of the sale proceeds;
            (4) if the transaction involves an issue of securities for which listing will be sought, the announcement must also include:
            (a) a statement that the announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities; and
            (b) a statement that application has been or will be made to the Exchange for the listing of and permission to deal in the securities;
            (5) where the transaction is a major transaction approved or to be approved by way of written shareholders' approval from a shareholder or a closely allied group of shareholders pursuant to rule 19.44, details of the shareholder or the closely allied group of shareholders (as the case may be), including the name of the shareholder(s), the number of securities held by each such shareholder and the relationship between the shareholders;
            (6) if the transaction involves a disposal of an interest in a subsidiary by a listed issuer, a declaration as to whether the subsidiary will continue to be a subsidiary of the listed issuer following the transaction; and
            (7) in the case of a major transaction, a very substantial disposal, a very substantial acquisition or a reverse takeover, the expected date of despatch of the circular and if this is more than 15 business days after the publication of the announcement, the reasons why this is so.

            Note: If there is expected to be delay in despatch of the circular, the listed issuer must as soon as practicable publish a further announcement in accordance with rule 19.36A.

          • 19.60A

            In addition to the information set out in rule 19.60, where the announcement for a discloseable transaction contains a profit forecast as referred to in rule 19.62, the announcement must contain the following information or the issuer must publish a further announcement containing the following information within 15 business days after the publication of the announcement:

            (1) the information specified in paragraph 29(2) of Appendix 1, Part B; and
            (2) information regarding the expert statements contained in the announcement, which is specified in paragraph 5 of Appendix 1, Part B.

        • Profit forecast in an announcement (19.61-19.62)

          • 19.61

            A "profit forecast" means any forecast of profits or losses, however worded, and includes any statement which explicitly or implicitly quantifies the anticipated level of future profits or losses, either expressly or by reference to previous profits or losses or any other benchmark or point of reference. It also includes any profit estimate, being any estimate of profits or losses for a financial period which has expired but for which the results have not yet been published. Any valuation of assets (except for property interests (as defined in rule 8.01(3)) or businesses acquired by an issuer based on discounted cash flows or projections of profits, earnings or cash flows is regarded as a profit forecast.

          • 19.62

            Where the announcement contains a profit forecast in respect of the issuer or a company which is, or is proposed to become, one of its subsidiaries, the issuer must submit the following additional information and documents to the Exchange no later than the making of such announcement:—

            (1) details of the principal assumptions, including commercial assumptions, upon which the forecast is based;
            (2) a letter from the issuer's auditors or reporting accountants confirming that they have reviewed the accounting policies and calculations for the forecast and containing their report; and
            (3) a report from the issuer's financial advisers confirming that they are satisfied that the forecast has been made by the directors after due and careful enquiry. If no financial advisers have been appointed in connection with the transaction, the issuer must provide a letter from the board of directors confirming they have made the forecast after due and careful enquiry.

            Note: See rule 17.26B in respect of issuers' obligation to announce material or significant changes which impact on profit forecasts.

      • Contents of circulars

        • General principles (19.63-19.65)

          • 19.63

            A circular of a major transaction, very substantial disposal, very substantial acquisition or extreme transaction and a listing document for a reverse takeover sent by a listed issuer to holders of its listed securities must:—

            (1) provide a clear, concise and adequate explanation of its subject matter having regard to the provisions of rule 17.56; and
            (2) if voting or shareholders' approval is required:
            (a) contain all information necessary to allow the holders of the securities to make a properly informed decision;
            (b) contain a heading emphasising the importance of the document and advising holders of securities, who are in any doubt as to what action to take, to consult appropriate independent advisers;
            (c) contain a recommendation from the directors as to the voting action that shareholders should take, indicating whether or not the proposed transaction described in the circular is, in the opinion of the directors, fair and reasonable and in the interests of the shareholders as a whole; and
            (d) contain a statement that any shareholder with a material interest in a proposed transaction and his close associates will abstain from voting on resolution(s) approving that transaction; and
            (3) a confirmation that, to the best of the directors' knowledge, information and belief having made all reasonable enquiry, the counterparty and the ultimate beneficial owner of the counterparty are third parties independent of the listed issuer and connected persons of the listed issuer.

          • 19.64 [Repealed]

            [Repealed 1 January 2009]

          • 19.65 [Repealed]

            [Repealed 1 January 2009]