Entire Section

  • 2019

    Update Number Effective Date

    (DD/MM/YY)
    Topics
    Update No. 128 01/07/20 Amendments to Environmental, Social and Governance Reporting Guide and related Main Board Listing Rules
    Update No. 127 01/10/19 Amendments to Main Board Listing Rules relating to Backdoor Listing, Continuing Listing Criteria and Other Rule Amendments
    Update No. 126 06/07/19 Amendments to Main Board Listing Rules relating to Review Structure for Listing Committee Decisions 
    Update No. 125 01/09/19 Amendments to the Main Board Listing Rules relating to Listed Issuers with Disclaimer or Adverse Audit Opinion on Financial Statements
    Update No. 124 01/03/19 Amendments to the Main Board Listing Rules relating to Proposed Changes to Documentary Requirements relating to Listed Issuers and Other Minor Rule Amendments 

    • Update No. 128

      Note to subscribers for the amendments to the rules governing the listing of securities (the "Listing Rules")

      Update No. 128

      December 2019

      Dear Sirs,

      Amendments to the Main Board Listing Rules

      We enclose reprinted pages of the Listing Rules and filing instructions. The reprinted pages incorporate amendments to implement the proposals of the "Consultation Conclusions on Review of the Environmental, Social and Governance Reporting Guide and related Listing Rules" published on 18 December 2019.

      Key changes to the Listing Rules include:

          •    Introducing mandatory disclosure requirements to include:
      ‒    a board statement setting out the board’s consideration of ESG issues;
      ‒    application of Reporting Principles “materiality”, “quantitative” and “consistency”; and
      ‒    an explanation of reporting boundaries of ESG reports;
          •    Requiring disclosure of significant climate-related issues which have impacted and may impact the issuer;
          •    Amending the “Environmental” key performance indicators (KPIs) to require disclosure of relevant targets;
          •    Upgrading the disclosure obligation of all “Social” KPIs to “comply or explain”; and
          •    Shortening the deadline for publication of ESG reports to within five months after the financial year-end.

      Coming into effect

      The amendments will apply to issuers’ ESG reports for financial years commencing on or after 1 July 2020.

      Please click HERE to see the amendments to the Main Board Listing Rules.

      Yours faithfully,
      For and on behalf of
      The Stock Exchange of Hong Kong Limited

       

      David Graham
      Head of Listing

       

    • Update No. 127

      Note to subscribers for the amendments to the rules governing the listing of securities (the “Listing Rules”)

      Update No. 127

      July 2019

      Dear Sirs,

      Amendments to the Main Board Listing Rules

      We enclose reprinted pages of the Listing Rules and filing instructions. The reprinted pages incorporate amendments to implement the proposals of the “Consultation Conclusions on Backdoor Listing, Continuing Listing Criteria and Other Rule Amendments” published on 26 July 2019.

      We have amended the Listing Rules to:

      (i)   Amendments Relating to Backdoor Listings
         
      •  Reverse takeover (“RTO”) – Principle based test: codify the six assessment factors under the principle based test in Guidance Letter GL78-14, with modifications made to the last two factors:
      - transaction size
      - target quality
      - nature and scale of issuer’s business
      - fundamental change in principal business
      - change in control/de facto control
      - series of transactions and/or arrangements (this includes acquisitions, disposals and/or change in control or de facto control that take place in reasonable proximity (normally within 36 months) or are otherwise related);
         
      •  RTO – Bright line tests: modify the bright line tests to (i) apply to very substantial acquisitions from an issuer’s controlling shareholder within 36 months from a change in control of the issuer; and (ii) restrict disposals (or distributions in specie) of all or a material part of the issuer’s business proposed at the time of or within 36 months after a change in control of the issuer. The Exchange may also apply the restriction to disposals (or distributions in specie) at the time of or within 36 months after a change in de facto control (as set out in the principle based test) of the issuer;
         
      •   Backdoor listing through large scale issue of securities: codify Guidance Letter GL84-15 to disallow backdoor listing through large scale issue of securities for cash, where there is, or will result in, a change in control or de facto control of the issuer, and the proceeds will be applied to acquire and/or develop new business that is expected to be substantially larger than the issuer’s existing principal business;
         
      •   Extreme transactions: (i) codify the “extreme VSAs” requirements in Guidance Letter GL78-14 and rename this category of transactions as “extreme transactions”; and (ii) impose additional eligibility criteria on the issuer that may use this transaction category: (a) the issuer must operate a principal business of substantial size; or (b) the issuer must have been under the control or de facto control of the same person(s) for a long period (normally not less than 36 months) and the transaction will not result in a change in control or de facto control of the issuer;
         
      •   Requirements for RTOs and extreme transactions: modify the Rules to require the acquisition targets in a RTO or extreme transaction to meet the requirements of Rule 8.04 and Rule 8.05 (or Rule 8.05A or 8.05B), and the enlarged group to meet all the new listing requirements in Chapter 8 of the Rules except Rule 8.05. Where the RTO is proposed by an issuer that does not meet Rule 13.24, the acquisition targets must also meet the requirement of Rule 8.07;
         
      (ii)   Amendments to Continuing Listing Criteria for Listed Issuers
         
      •   Rule 13.24 (sufficient operations): amend Rule 13.24 to require an issuer to carry out a business with a sufficient level of operations and to have assets of sufficient value to support its operations to warrant its continued listing (and not sufficient operations or assets set out in the current Rule). Proprietary securities trading and/or investment activities by an issuer’s group (other than a Chapter 21 company) are normally excluded when considering whether the issuer can meet Rule 13.24 (except for those carried out by a member of the issuer’s group that is a banking company, an insurance company, or a securities house that is mainly engaged in regulated activities under the Securities and Futures Ordinance); and
         
      •   Rules 14.82 and 14.83 (cash companies): (i) extend the definition of “short-dated securities” in Rule 14.82 to cover investments that are easily convertible into cash and rename it as “short-term investments”; and (ii) confine the exemption under Rule 14.83 to cash and short-term investments held by members of an issuer’s group that are banking companies, insurance companies or securities houses.
         
      A transitional period of 12 months from the effective date (i.e. 1 October 2019) will apply to listed issuers that do not comply with the new Rule 13.24 or 14.82 strictly as a result of the Rule amendments. The transitional arrangement will minimise the impact of the Rule amendments on those issuers by allowing them a 12-month period to comply with the Rules as amended. For the avoidance of doubt, the transitional arrangement will not apply to issuers that do not comply with the current requirements under Rule 13.24 or 14.82, or become non-compliant with the new Rule 13.24 or 14.82 after the effective date.  

      There are also other Rule amendments relating to issuers’ securities trading and/or investments, significant distributions in specie, notifiable transactions and connected transactions.

      Coming into effect

      The amendments will come into effect on 1 October 2019.

      Please click HERE to see the amendments to the Main Board Listing Rules.

      Yours faithfully,
      For and on behalf of
      The Stock Exchange of Hong Kong Limited

      David Graham
      Head of Listing

    • Update No. 126

      Note to subscribers for the amendments to the rules governing the listing of securities (the "Listing Rules")

      Update No. 126

      July 2019

      Dear Sirs,

      Amendments to the Main Board Listing Rules

      We enclose reprinted pages of the Listing Rules and filing instructions. The reprinted pages incorporate amendments to implement the proposals of the "Consultation Conclusions on Review Structure in relation to Listing Committee Decisions" published on 18 January 2019.

      We have amended the Listing Rules such that:

      1. Decisions regarding (i) rejection of a new applicant’s listing application solely on the ground of unsuitability for listing; (ii) cancellation of listing; and (iii) imposition of certain disciplinary sanctions made by the Listing Committee are subject to only one level of review, and the Listing Appeals Committee is discontinued.
      2. A new independent review committee (the Listing Review Committee) is established to replace the Listing (Review) Committee and the Listing (Disciplinary Review) Committee.
      3. Decisions of the new Listing Review Committee for non-disciplinary matters are to be published.
      4. The SFC may request a review of any matter, including a decision of the Listing Committee by the new Listing Review Committee.
      5. Transitional arrangements are provided. All disciplinary review hearings for disciplinary proceedings commenced before the effective date of the amendments, and all non-disciplinary review hearings in respect of certain decisions will be conducted under the current Rules.

      Coming into effect

      The amendments will come into effect on 6 July 2019. 

      Please click HERE to see the amendments to the Main Board Listing Rules.

      Yours faithfully,
      For and on behalf of
      The Stock Exchange of Hong Kong Limited

      David Graham
      Head of Listing

    • Update No. 125

      Note to subscribers for the amendments to the rules governing the listing of securities (the “Listing Rules”)

      Update No. 125

      May 2019

      Dear Sirs,

      Amendments to the Main Board Listing Rules

      We enclose reprinted pages of the Main Board Listing Rules and filing instructions. The reprinted pages incorporate amendments to implement the proposals of the “Consultation Conclusions on Proposal Relating to Listed Issuers with Disclaimer or Adverse Audit Opinion on Financial Statements” published on 24 May 2019.

      Under the new Main Board Listing Rules:

      (a) the Exchange will normally require suspension of trading in an issuer’s securities if 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 or adverse opinion on the issuer’s financial statements;
      (b) it may disapply the suspension requirement where (i) the disclaimer or adverse opinion relates solely to going concern; or (ii) the underlying issues giving rise to the audit modification have been resolved before the issuer publishes the preliminary results announcement;
      (c) 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 position;
      (d) where the resolution of issues giving rise to the disclaimer or adverse opinion is outside the issuer’s control, a longer remedial period may be allowed, with the duration of the period being determined on a case by case basis; and
      (e) as a transitional arrangement, the remedial period will be extended to 24 months for issuers that are suspended solely due to a disclaimer or adverse opinion on the issuers’ financial statements for the financial years commencing between 1 September 2019 and 31 August 2021.

      Coming into effect

      The amendments will apply to issuers’ preliminary annual results announcements for financial years commencing on or after 1 September 2019.

      Please click HERE to see the amendments to the Main Board Listing Rules.

      Yours faithfully,
      For and on behalf of
      The Stock Exchange of Hong Kong Limited

      David Graham
      Head of Listing

    • Update No. 124

      Note to subscribers for the amendments to the rules governing the listing of securities (the "Listing Rules")

      Update No. 124

      February 2019

      Dear Sirs,

      Amendments to the Main Board Listing Rules

      We enclose reprinted pages of the Listing Rules and filing instructions. The reprinted pages incorporate amendments to implement the proposals of the "Consultation Conclusions on Proposed Changes to Documentary Requirements relating to Listed Issuers and Other Minor Rule Amendments" published on 1 February 2019.

      We have amended the Listing Rules to:

      •   revise the declaration and undertaking by directors and supervisors in the form set out in Appendix 5B, 5H or 5I to include an undertaking to inform the Exchange of the director’s or supervisor’s contact information, to grant the Exchange with the power to gather information from supervisors and to align the Main Board Rules and the GEM Rules in relation to directors’ and supervisors’ obligations;
      •   streamline listed issuers’ filing requirements in respect of an issue of new securities;
      •   remove the filing requirements for (i) documents that are submitted to the Exchange for record only; and (ii) documents whose contents are al disclosed to the public; and
      •   make other minor Rule amendments and housekeeping Rule amendments.

      Coming into effect

      The amendment will come into effect on 1 March 2019.

      Please click HERE to see the amendments to the Listing Rules.

      Yours faithfully,
      For and on behalf of
      The Stock Exchange of Hong Kong Limited

      David Graham
      Head of Listing