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  • GEM Listing Rules

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    • GENERAL

      • Chapter 1 Interpretation

        • 1.01

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

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

          "accounts" has the same meaning as "financial statements" and vice-versa
          "affiliated company" a company which, in accordance with the Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants, is recorded using the equity method of accounting in an entity's financial statements. This includes associated companies and jointly controlled entities as defined in those standards
          "announcement" announcement published under rule 16.17 and "announce" means make an announcement
          "Application Proof" a draft listing document that is required to be substantially complete and is submitted to the Exchange together with a listing application form for the purpose of listing equity securities of a new applicant
          "approved share registrar" a share registrar who is a member of an association of persons approved under section 12 of the Securities and Futures (Stock Market Listing) Rules
          "Articles" the Articles of Association of the Exchange
          "asset-backed securities" debt securities backed by financial assets which, at the time of the relevant issues, are evidenced by agreements and intended to produce funds to be applied towards interest payments due on the securities and repayment of principal on maturity, except those debt securities which are directly secured, in whole or in part, on real property or other tangible assets
          "associate" has the meaning in rule 20.06(2)
          "authorised representative" a person appointed as an authorised representative by a listed issuer under rule 5.24
          "balance sheet" has the same meaning as "statement of financial position" and vice-versa
          "bank" a bank licensed under the Banking Ordinance or a bank incorporated or otherwise established outside Hong Kong which is, in the opinion of the Hong Kong Monetary Authority, adequately supervised by an appropriate recognised banking supervisory authority in the place where it is incorporated or otherwise established
          "bearer securities" securities transferable to bearer
          "Board" the Directors of the Exchange elected or appointed in accordance with the Articles and, where the context so permits, any committee or sub-committee thereof
          "business day" any day on which the Exchange is open for the business of dealing in securities
          “capital market intermediary” or “CMI” any corporation or authorised financial institution, licensed or registered under the Securities and Futures Ordinance that engages in specified activities under paragraph 21.1.1 of the Code of Conduct, including, without limitation, a capital market intermediary appointed pursuant to rule 6A.40. An overall coordinator is also a capital market intermediary.
          "CCASS" means the Central Clearing and Settlement System established and operated by HKSCC
          "chief executive" a person who either alone or together with one or more other persons is or will be responsible under the immediate authority of the board of directors for the conduct of the business of a listed issuer
          "China Accounting Standards for Business Enterprises" or "CASBE" financial reporting standards and interpretations for business enterprises issued by the China Accounting Standards Committee of the China Ministry of Finance
          "China Auditing Standards" or "CAS" standards and interpretations issued by the China Auditing Standards Board of the China Ministry of Finance
          "close associate"
          (a) in relation to an individual means:—
          (i) his spouse;
          (ii) any child or step-child, natural or adopted, under the age of 18 years of the individual or of his spouse (together with (a)(i) above, the "family interests");
          (iii) the trustees, acting in their capacity as trustees, of any trust of which he or any of his family interests is a beneficiary or, in the case of a discretionary trust, is (to his knowledge) a discretionary object; and
          (iv) [Repealed 3 June 2010]
          (v) any company in the equity capital of which he, his family interests, and/or any of the trustees referred to in (a)(iii) above, acting in their capacity as such trustees, taken together are directly or indirectly interested so as to exercise or control the exercise of 30% (or any amount specified in the Takeovers Code as the level for triggering a mandatory general offer) or more of the voting power at general meetings, or to control the composition of a majority of the board of directors and any subsidiary of this company; and
          (b) in relation to a company means:—
          (i) its subsidiary or holding company or a fellow subsidiary of its holding company;
          (ii) the trustees, acting in their capacity as trustees, of any trust of which the company is a beneficiary or, in the case of a discretionary trust, is (to the company's knowledge) a discretionary object; and
          (iii) [Repealed 3 June 2010]
          (iv) any other company in the equity capital of which the company, its subsidiary or holding company, a fellow subsidiary of its holding company, and/ or any of the trustees referred to in (b) (ii) above, acting in their capacity as such trustees, taken together are directly or indirectly interested so as to exercise or control the exercise of 30% (or any amount specified in the Takeovers Code as the level for triggering a mandatory general offer) or more of the voting power at general meetings, or to control the composition of a majority of the board of directors and any subsidiary of this other company.

          Notes: This definition is:—
          1 modified in the context of PRC issuers, by virtue of rule 25.04; and
          2 extended so as to apply to Sponsors, by virtue of rule 6A.31, underwriters, by virtue of rules 16.13, 16.15 and 29.22, and significant shareholders, Sponsors and underwriters by virtue of rule 10.12;
          "Code of Conduct" Code of Conduct for Persons Licensed by or Registered with the Commission
          "Code on Share Buy-backs" or "Share Buy-backs Code" the Code on Share Buy-backs approved by the Commission as amended from time to time
          "Code on Takeovers and Mergers" or "Takeovers Code" the Code on Takeovers and Mergers approved by the Commission as amended from time to time
          "Commission" the Securities and Futures Commission established under section 3 of the Securities and Futures Commission Ordinance and continuing in existence under section 3 of the Securities and Futures Ordinance
          "Companies Ordinance" the Companies Ordinance (Cap.622) as amended from time to time
          "Companies (Winding Up and Miscellaneous Provisions) Ordinance" the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32) as amended from time to time
          "company" a body corporate wherever incorporated or otherwise established
          "Company Information Sheet" the document required to be published under rules 12.26(2), 12.27(9) or 28.16(2) in the prescribed form set out in Appendix 5F and, where applicable, supplemented by the information required by rule 24.27 for publication on the Exchange’s website and the overseas issuer’s website
          "Company Law" the Company Law of the PRC adopted at the Fifth Session of the Standing Committee of the Eight National People's Congress on 29 December 1993 and effective from 1 July 1994, as amended, supplemented or otherwise modified from time to time
          "Compliance Adviser" the same meaning as in rule 6A.01
          "connected person" has the meaning in rule 20.06(7)

          Note: The definition includes a person deemed to be connected by the Exchange under rule 20.07(6) only for the purpose of Chapter 20.
          "Considered Reasons and Explanation" has the meaning defined in Appendix 15
          "controlling shareholder" any person who is or group of persons who are together entitled to exercise or control the exercise of 30% (or such other amount as may from time to time be specified in the Takeovers Code as being the level for triggering a mandatory general offer) or more of the voting power at general meetings of the issuer or who is or are in a position to control the composition of a majority of the board of directors of the issuer; or in the case of a PRC issuer, the meaning ascribed to that phrase by rule 25.10
          "convertible debt securities" debt securities convertible into or exchangeable for equity securities or other property, and debt securities with non-detachable options, warrants or similar rights to subscribe or purchase equity securities or other property attached (which expression includes convertible bonds)
          "convertible equity securities" equity securities convertible into or exchangeable for shares and shares with non-detachable options, warrants or similar rights to subscribe or purchase shares attached (which expression excludes convertible bonds)
          "core connected person"
          (a) for a company other than a PRC issuer, or any subsidiary of a PRC issuer, means a director, chief executive or substantial shareholder of the company or any of its subsidiaries or a close associate of any of them; and
          (b) for a PRC issuer means a director, supervisor, chief executive or substantial shareholder of the PRC issuer or any of its subsidiaries or close associate of any of them
          "corporate communication" any document issued or to be issued by an issuer for the information or action of holders of any of its securities or the investing public, including but not limited to:—
          (a) the directors' report and its annual accounts together with a copy of the auditors' report thereon and, where applicable, its summary financial report;
          (b) the half-year report and, where applicable, its summary half-year report;
          (c) the quarterly report;
          (d) a notice of meeting;
          (e) a listing document;
          (f) a circular;
          (g) a proxy form
          (h) an Application Proof; and
          (i) a Post Hearing Information Pack or PHIP
          "debt issuance programmes" issues of debt securities where only part of the maximum principal amount or aggregate number of securities under the issue is issued initially and a further tranche or tranches may be issued subsequently
          "debt securities" debenture or loan stock, debentures, bonds, notes and other securities or instruments acknowledging, evidencing or creating indebtedness, whether secured or unsecured and options, warrants or similar rights to subscribe or purchase any of the foregoing and convertible debt securities
          "director" includes any person who occupies the position of a director, by whatever name called
          "domestic shares" shares issued by a PRC issuer under PRC law, the par value of which is denominated in Renminbi, and which are subscribed for in Renminbi
          "dual listing" a listing on GEM where the issuer either: (i) also has a listing on one or more overseas stock exchange(s); or (ii) is simultaneously applying to list on GEM and one or more overseas stock exchange(s)
          "effective economic interest" in relation to any entity means the direct and/or indirect attributable economic interest therein
          "Eligible Security" means an issue of securities which is from time to time accepted as eligible by HKSCC for deposit, clearance and settlement in CCASS, in accordance with the General Rules of CCASS, and where the context so requires shall include any particular security or securities of such an issue
          "equity securities" shares (including preference shares), convertible equity securities and options, warrants or similar rights to subscribe or purchase shares or convertible equity securities
          "EU-IFRS" IFRS as adopted by the European Union
          "Executive Director — Listing Division" the person occupying the position of the Executive Director of the Listing Division from time to time by whatever name such position is called
          "Exchange" The Stock Exchange of Hong Kong Limited
          "Exchange Participant" a person: (a) who, in accordance with the Rules of the Exchange, may trade on or through the Exchange; and (b) whose name is entered in a list, register or roll kept by the Exchange as a person who may trade on or through the Exchange
          “Exchange’s website” the official website of Hong Kong Exchanges and Clearing Limited and/or the website “HKEXnews” which is used for publishing issuers’ regulatory information
          "expert" includes engineer, valuer, accountant and any other person whose profession gives authority to a statement made by him
          "family interests" the same meaning as in (a)(ii) of the definition of "close associate"
          "Financial Reporting Council" or "FRC" the Financial Reporting Council established by section 6(1) of the Financial Reporting Council Ordinance
          "Financial Reporting Council Ordinance" or "FRCO" the Financial Reporting Council Ordinance (Cap. 588) as amended from time to time
          "financial year" the period in respect of which any profit and loss account of a company laid or to be laid before it in general meeting is made up, whether that period is a year or not
          "financial statements" has the same meaning as "accounts" and vice-versa
          "foreign shares" shares issued by a PRC issuer under PRC law, the par value of which is denominated in Renminbi, and which are subscribed for in a currency other than Renminbi
          "formal notice" a formal notice required to be published under rules 16.07, 16.08, 29.18, 29.19 or 30.32
          "FRC Transaction Levy" means the levy payable to the Financial Reporting Council pursuant to the provisions of section 50A of the Financial Reporting Council Ordinance
          "gazetted newspapers" those newspapers which are, from time to time, specified in the list of newspapers issued and published in the Gazette for the purposes of sections 162 to 169 of the Companies Ordinance by the Chief Secretary
          "GEM" GEM operated by the Exchange
          "GEM Listing Committee" the GEM listing sub-committee of the Board
          "GEM Listing Review Committee" the GEM listing review sub-committee of the Board
          "GEM Listing Rules" or "GLR" or "Rules" the rules governing the listing of securities on GEM made by the Exchange from time to time
          "group" the issuer or guarantor and its subsidiaries, if any
          "H Shares" overseas listed foreign shares of a PRC issuer which are listed and traded on GEM
          "HKEC" Hong Kong Exchanges and Clearing Limited
          "HKEx-EPS" means the Exchange's electronic publication system by whatever name such system is called
          "HKSCC" means Hong Kong Securities Clearing Company Limited including, where the context so requires, its agents, nominees, representatives, officers and employees
          "holding company" in relation to a company, means another company of which it is a subsidiary
          "Hong Kong" Hong Kong, the Special Administrative Region of the People's Republic of China
          "Hong Kong Financial Reporting Standards" or "HKFRS" financial reporting standards and interpretations issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA"). They comprise (i) Hong Kong Financial Reporting Standards, (ii) Hong Kong Accounting Standards and (iii) Interpretations
          "Hong Kong issuer" an issuer incorporated or otherwise established in Hong Kong
          "Hong Kong register" for an overseas issuer including a PRC issuer, the part of its register of members or branch register located and maintained in Hong Kong pursuant to its articles of association
          "IFA group"
          (a) the independent financial adviser;
          (b) its holding company;
          (c) any subsidiary of its holding company;
          (d) any controlling shareholder of:
          (i) the independent financial adviser; or
          (ii) its holding company; and
          (e) any close associate of any controlling shareholder referred to in paragraph (d)
          "income statement" has the same meaning as "statement of profit or loss and other comprehensive income" and vice-versa
          "inside information" has the meaning defined in the Securities and Futures Ordinance as amended from time to time

          Note: Where the Exchange interprets whether a piece of information is inside information in the context of enforcing the GEM Listing Rules, e.g. rules 13.11(4) and 23.05, it will be guided by decisions of the Market Misconduct Tribunal and published guidelines of the Commission
          "Inside Information Provisions" Part XIVA of the Securities and Futures Ordinance
          "International Financial Reporting Standards" or "IFRS" financial reporting standards and interpretations approved by the International Accounting Standards Board ("IASB"), and includes all International Accounting Standards ("IAS") and interpretations issued under the former International Accounting Standards Committee ("IASC") from time to time
          "International Standards on Auditing" or "ISA" standards and interpretations issued by the International Auditing and Assurance Standards Board of the International Federation of Accountants
          "IOSCO" International Organization of Securities Commissions
          "IOSCO MMOU" IOSCO Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information
          "issue" includes circulate, distribute and publish
          "issuer" any company or other legal person any of whose equity or debt securities are the subject of an application for listing on GEM or some or all of whose equity or debt securities are al listed on GEM
          "listed issuer" in the case of equity securities means any company or other legal person some of whose equity securities are al listed on GEM, and in the case of debt securities means a company or other legal person some of whose equity or debt securities are al listed on GEM
          "listing" the grant of a listing of and permission to deal in securities on GEM and "listed" shall be construed accordingly
          "Listing Division" the Listing Division of the Exchange
          "listing document" 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
          "Listing Nominating Committee" the listing nominating sub-committee of the Board
          "Main Board" the stock market operated by the Exchange prior to the establishment of GEM (excluding the options market) and which stock market continues to be operated by the Exchange in parallel with GEM. For the avoidance of doubt, the Main Board excludes GEM.
          "Main Board Listing Committee" the Listing Committee as defined in the Main Board Listing Rules
          "Main Board Listing Rules" the rules governing the listing of securities on the Main Board made by the Exchange from time to time
          "Mandatory Provisions" the Mandatory Provisions for Companies Listing Overseas set forth in Zheng Wei Fa (1994) No. 21 issued on 27 August 1994 by the State Council Securities Policy Committee and the State Commission for Restructuring the Economic System
          "modified opinion" an opinion in an accountants' or auditors' report which is modified (a qualified opinion, an adverse opinion or a disclaimer of opinion on the financial statements)
          "modified report" an accountants’ or auditors’ report: —
          (a) in which the opinion is a modified opinion; and/or
          (b) which contains any of the following without modifying the opinion: —
          (i) an emphasis of matter paragraph; and
          (ii) a material uncertainty related to going concern
          "new applicant" in the case of equity securities means an applicant for listing none of whose equity securities are al listed on GEM and in the case of debt securities means an applicant for listing none of whose equity or debt securities are al listed on GEM
          “New Listing” means a new listing of equity securities issued by a new applicant, irrespective of whether there is an offering of equity securities.

          For the avoidance of doubt, “New Listing” includes a reverse takeover of a listed issuer which is a deemed new listing under rule 19.54, but does not include any other new listing of equity securities issued by an issuer whose equity securities are al listed on a stock market operated by the Exchange.
          "notifiable transaction" any of the transactions specified in rules 19.06, 19.06B or 19.06C
          “OC Announcement” an announcement setting out the name(s) of the overall coordinator(s) appointed by a new applicant effecting a placing involving bookbuilding activities (as defined under the Code of Conduct) in connection with a New Listing, including any subsequent related announcement(s), for example, an announcement on the termination of the engagement of an overall coordinator.
          “overall coordinator” a capital market intermediary that engages in specified activities under paragraphs 21.1.1 and 21.2.3 of the Code of Conduct, including, without limitation, an overall coordinator appointed pursuant to rule 6A.42.
          "overseas issuer" an issuer that is neither a Hong Kong issuer nor a PRC issuer
          "overseas listed foreign shares" in respect of a PRC issuer means foreign shares which are listed outside the PRC
          "PIE Auditor"
          has the same meaning as in section 3A of the FRCO, that is:
          (a)  a Registered PIE Auditor; or
          (b)  a Recognised PIE Auditor
          Note:  Under the FRCO, only an issuer incorporated outside Hong Kong is permitted to appoint a Recognised PIE Auditor for a PIE Engagement. A Mainland auditor recognised under section 20ZT of the FRCO can only carry out a PIE engagement for a PRC issuer.
          "PIE Engagement"
          has the same meaning as an engagement specified in Part 1 of Schedule 1A of the FRCO, that is any of the following types of engagement carried out by an auditor or a reporting accountant:
          (a)  an auditors’ report on a PIE’s annual financial statements required by the Companies Ordinance, the GEM Listing Rules or any relevant code issued by the Commission;
          (b)  a specified report required to be included in (i) a listing document for the listing of the shares or stocks of a corporation seeking to be listed or a listed corporation; or (ii) a listing document of a Collective Investment Scheme seeking to be listed or a listed Collective Investment Scheme; and
          (c)  an accountants’ report required under the GEM Listing Rules to be included in a circular issued by a PIE for a reverse takeover or a very substantial acquisition
          "place of central management and control"
          the Exchange will consider the following factors to determine an issuer’s place of central management and control:
          (a)  the location from where the issuer’s senior management direct, control, and coordinate the issuer’s activities;
          (b)  the location of the issuer’s principal books and records; and
          (c)  the location of the issuer’s business operations or assets
          "Post Hearing Information Pack" or "PHIP" a near-final draft listing document for the listing of equity securities published on the Exchange’s website
          "practising accountant" an individual, firm or company qualified for appointment as an auditor or reporting accountant of a company
          "PRC" for the purposes of the GEM Listing Rules means the People's Republic of China, other than the regions of Hong Kong, Macau and Taiwan
          "PRC issuer" an issuer which is duly incorporated in the PRC as a joint stock limited company
          "PRC law" the applicable provisions of the PRC constitution, or any statute, ordinance, regulations, rule or normative statement from time to time in force in the PRC, as the context may require
          "PRC property" property located in the PRC
          "PRC stock exchange" the Shanghai Stock Exchange or the Shenzhen Stock Exchange
          "Principal" has the meaning given to it by the Commission's Guidelines for Sponsors and Compliance Advisers from time to time
          "professional accountant" a person registered as a certified public accountant under the Professional Accountants Ordinance
          "Professional Accountants Ordinance” or “PAO" the Professional Accountants Ordinance (Cap. 50) as amended from time to time
          "profit and loss account" has the same meaning as "statement of profit or loss and other comprehensive income" and vice-versa
          "promoter" in relation to any PRC issuer, any person who undertook the establishment of such issuer, subscribed for shares of such issuer and assumes liability for such issuer's establishment, prepared the initial articles of association of such issuer and convened the inaugural meeting of the subscribers of shares of such issuer, or any person who performed a similar role under PRC law in the establishment of a PRC issuer
          "prospectus" the same meaning as in section 2(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance
          "public" the meaning ascribed to that phrase by rule 11.23 and "in public hands" shall be construed accordingly
          "Public Interest Entity" or "PIE"
          has the same meaning as in section 3(1) of the FRCO, that is a listed corporation with listed shares or stocks or a listed Collective Investment Scheme in Hong Kong
          Note: A listed corporation with listed debt securities but no listed shares or stocks is not a PIE.
          "published on the Exchange’s website" published, in the form prescribed by the GEM Listing Rules, in both the English and Chinese languages on the Exchange’s website
          "Recognised PIE Auditor" an overseas auditor recognised under Division 3 of Part 3 of the FRCO, including a Mainland auditor recognised under section 20ZT of the FRCO
          "Recognised Stock Exchange" the main market of a stock exchange that is included in a list of Recognised Stock Exchanges published on the Exchange’s website as updated from time-to-time
          "Registered PIE Auditor" a practice unit registered under Division 2 of Part 3 of the FRCO
          "Regulations" the Special Regulations on the Overseas Offering and Listing of Shares by Joint Stock Limited Companies issued by the State Council of the PRC on 4 August 1994, as amended, supplemented or otherwise modified from time to time
          "reporting accountant" the professional accountant or practising accountant who is responsible for the preparation of the accountants' report included in a listing document or circular in accordance with Chapter 7
          "Securities and Futures Ordinance" or "SFO" the Securities and Futures Ordinance (Cap. 571) as amended from time to time
          "SFC Transaction Levy" means the levy payable to the Commission pursuant to the provisions of section 394 of the SFO
          "significant shareholder" any person who, immediately prior to the date of the new applicant's initial listing document and immediately prior to the date on which securities of the new applicant commence trading on GEM, is (or group of persons who together are) entitled to exercise or control the exercise of 5% or more of the voting power at general meetings of the new applicant

          Note: The Exchange reserves a power to deem any party to be a significant shareholder in circumstances where, prior to the date of issue of the new applicant's initial listing document, that party has been entitled to exercise or control the exercise of 5% or more of the voting power at general meetings of the new applicant and, on or after the new applicant's listing, that party again becomes entitled to exercise or control the exercise of 5% or more of the voting power at general meetings of the issuer.
          "SFC Sponsor Provisions" paragraph 17 of the Code of Conduct
          "Sponsor" any corporation or authorised financial institution licensed or registered under the Securities and Futures Ordinance for Type 6 regulated activity and permitted under its licence or certificate of registration to undertake work as a Sponsor and, as applicable, which is appointed as a Sponsor pursuant to rule 6A.02
          "Sponsors Guidelines" Additional Fit and Proper Guidelines for Corporations and Authorized Financial Institutions applying or continuing to act as Sponsors and Compliance Advisers
          "Statutory Rules" the Securities and Futures (Stock Market Listing) Rules as amended from time to time, the text of which is set out in Appendix 12
          "subsidiary" includes:
          (a) a "subsidiary undertaking" as defined in schedule 1 to the Companies Ordinance;
          (b) any entity which is accounted for and consolidated in the audited consolidated accounts of another entity as a subsidiary pursuant to applicable Hong Kong Financial Reporting Standards or International Financial Reporting Standards; and
          (c) any entity which will, as a result of acquisition of its equity interest by another entity, be accounted for and consolidated in the next audited consolidated accounts of such other entity as a subsidiary pursuant to applicable Hong Kong Financial Reporting Standards or International Financial Reporting Standards
          "substantial shareholder" in relation to a company means a person who is entitled to exercise, or control the exercise of, 10% or more of the voting power at any general meeting of the company

          Note: This definition is qualified in the case of connected transactions falling within rule 20.27.
          "summary financial report" a summary financial report of a company, which complies with sections 437 to 446 of the Companies Ordinance
          "supervisor" a member elected to the supervisory committee of a PRC issuer which under PRC law performs a supervisory function in relation to such issuer's board of directors, the manager and other officers
          “syndicate CMI” a capital market intermediary (which includes the overall coordinator) engaged by the issuer to conduct specified activities under paragraphs 21.1.1 and/or 21.2.3 of the Code of Conduct. 
          “syndicate member” include a syndicate CMI and any other distributor engaged by the issuer to conduct bookbuilding, placing and/or related activities in respect of an offering of equity securities.
          "tap issues" issues of debt securities where the subscription thereof may continue or further tranches thereof may be issued after listing has been granted
          "temporary documents of title" allotment letters, letters of allocation, split receipts, letters of acceptance, letters of rights, renounceable share certificates and any other temporary documents of title
          "title certificates" for the purposes of PRC property must comprise:—
          (a) a state-owned land use rights certificate (國有土地使用證); or
          (b) a building ownership certificate (房屋所有權證); or
          (c) a real estate ownership certificate (房地產權證),
          provided that the Exchange may, at its discretion, be prepared to accept other certificates or evidence of title in respect of a PRC property as title certificates for the purposes of the GEM Listing Rules, in which regard early consultation with the Exchange is required.
          "trading halt" an interruption of trading in an issuer's securities requested or directed pending disclosure of information under the Rules and extending for no more than two trading days

          Note: Where a trading halt exceeds two trading days, it will automatically become a trading suspension.

        • 1.02

          The GEM Listing Rules include all the appendices hereto and all practice notes issued by the Exchange from time to time concerning GEM and all of the notes set out in the Chapters hereof and appendices hereto. For the avoidance of doubt, the GEM Listing Rules do not include the Main Board Listing Rules.

        • 1.03

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

        • 1.04

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

        • 1.05

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

        • 1.06

          The GEM Listing Rules shall be interpreted, administered and enforced by the Exchange. The decisions of the Exchange in respect thereof shall be conclusive and binding.

        • 1.07

          The Exchange may issue practice notes and other guidance materials on the Exchange’s website, including guidance letters, listing decisions and other publications on the Exchange’s website, from time to time, to assist issuers and guarantors, in the case of a guaranteed issue, Sponsors and other advisers in interpreting and complying with the GEM Listing Rules.

        • 1.08

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

      • Chapter 2 Introduction

        • Preliminary

          • 2.01

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

          • 2.02

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

          • 2.03

            Although GEM is operated by the Exchange, it is entirely distinct from the Main Board. As such the GEM Listing Rules apply only to GEM and the Main Board Listing Rules apply only to the Main Board.

          • 2.04

            Any entity seeking to withdraw its listing on GEM with a view to listing on the Main Board or vice versa will be obliged to comply fully with the respective rules applicable to the respective stock markets.

          • 2.05

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

        • General principles

          • 2.06

            The GEM Listing Rules are designed to ensure that investors have and can maintain confidence in the market and in particular that:—

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

            In these last 4 respects, the GEM Listing Rules seek to secure for holders of securities, other than controlling interests, certain assurances and equality of treatment which their legal position might not otherwise provide.

          • 2.07

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

          • 2.08

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

          • 2.09

            Suitability for listing depends on many factors. Applicants for listing should appreciate that compliance with the GEM Listing Rules may not of itself ensure an applicant's suitability for listing. The Exchange retains a discretion to accept or reject applications and in reaching its decision will pay particular regard to the general principles outlined in rule 2.06. Informal and confidential guidance may be sought from the Exchange concerning the eligibility of any proposed application for listing.

            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).

          • 2.10

            Listing any securities on GEM, whether of a new applicant or a listed issuer, is in all cases subject to the approval of the Exchange.

          • 2.11

            No issuer may list its debt securities on GEM unless its equity securities, or the equity securities of its holding company, are al listed on GEM or will be listed on GEM at the same time as the issuer's debt securities.

        • Characteristics of GEM

          • 2.12

            GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Main Board. Appropriate warning and disclosure in this regard is required to be made by all issuers in their listing documents and circulars and without prejudice to the generality of this rule, reference is made to the provisions of rule 2.20.

            Notes:

            1 The qualifications for listing on GEM do not include any obligation to forecast future profitability.
            2 Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.
            3 [Repealed 15 February 2018]

          • 2.13

            The GEM Listing Rules require, and emphasise the on-going need for, comprehensive and timely disclosure of relevant information by all issuers. In this regard, particular attention is drawn to the following matters:—

            (1) A new applicant is required, in its initial listing document, to prepare a detailed statement of business objectives (see rule 11.15). It is subsequently required, in respect of its half-year end (in the event this follows listing) and full-year end for the financial year in which it is listed and the half-year ends and full-year ends of the two financial years thereafter, to draw up a comparison of actual business progress to the information provided in the statement of business objectives for the equivalent period and explain any material differences (including as to its use of proceeds, as indicated in the initial listing document) (see rules 18.08A);
            (2) A listed issuer is required to publish audited annual accounts and half-year and quarterly reports, which reports need not be audited (see Chapter 18);
            (3) [Repealed 1 January 2013]
            (4) The directors of an issuer are collectively and individually responsible for ensuring the issuer's full compliance with the GEM Listing Rules; and
            (5) [Repealed 1 July 2008]

          • 2.14

            The Exchange expects each director of an issuer to be cognizant of the GEM Listing Rules and reasonably familiar with the obligations and duties imposed upon him and the issuer pursuant to the GEM Listing Rules, the Securities and Futures Ordinance, the Companies Ordinance, the Takeovers Code and the Code on Share Buy-backs.

          • 2.15

            Having regard to the higher risk profile of GEM, the GEM Listing Rules impose additional responsibilities on the Compliance Adviser of an issuer by comparison to those imposed on a Compliance Adviser to a company listed on the Main Board (see Chapter 6A). Sponsors and Compliance Advisers are expected to play an important role in upholding and maintaining the standard of GEM issuers and hence the market's confidence in GEM.

          • 2.16 [Repealed]

            [Repealed 1 January 2005]

          • 2.17

            In circumstances where breaches of the GEM Listing Rules have been identified, the Exchange will take appropriate measures to enforce compliance and/or impose appropriate disciplinary measures.

        • Responsibility and confirmation

          • 2.18

            Any listing document, circular or announcement issued by an issuer pursuant to the GEM Listing Rules is required to contain a statement of responsibility and confirmation on the part of the directors of the issuer in the following form:—

            "This [document], for which the directors of the issuer collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the GEM of The Stock Exchange of Hong Kong Limited for the purpose of giving information with regard to the issuer. The directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this [document] is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this document misleading."

            Notes:

            1 In cases where the directors of the issuer are responsible for part of a listing document, circular or announcement, the directors of another company being responsible for the remainder, the statement must be appropriately adapted. In exceptional cases, the Exchange may require other persons to give, or join in, the statement, in which case the statement must also be appropriately adapted.
            2 Announcements required to be issued pursuant to rule 9.11 ("holding" announcements issued in connection with a resumption of trading in an issuer's securities), 17.11 or 31.05 (announcements issued in response to enquiries by the Exchange) need not comply with this rule, as they have their own prescribed form of statements of responsibility.
            3 All the directors of the issuer must, so far as reasonably practicable, participate in approving the form of any announcement to be published by the issuer, such that each accepts the responsibility and is able to provide the confirmation required pursuant to this rule. In exceptional circumstances, such as an issuer being required to publish an urgent announcement, it shall be permissible to exclude from the statement of responsibility and confirmation those directors with whom it has not been possible to communicate prior to publishing the announcement.

        • Disclaimer and GEM characteristics statements

          • 2.19

            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 as follows:—

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

          • 2.20

            Any listing document or circular and every annual report and accounts (including, where applicable, a summary financial report), half-year (including, where applicable, a summary half-year report) 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 in the following terms concerning the characteristics of GEM:—

            "Characteristics of GEM of The Stock Exchange of Hong Kong Limited (the "Exchange")

            GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration.

            Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

        • Communication with the Exchange

          • 2.21

            References in the GEM Listing Rules to informing or notifying the Exchange mean, unless the context requires otherwise, that the information must be either:—

            (1) delivered in hard copy or in an electronic format as specified by the Exchange to The Listing Division, 12th Floor, Two Exchange Square, 8 Connaught Place, Central, Hong Kong; or
            (2) sent by electronic means (in the format specified by the Exchange) to The Listing Division at its electronic mail address, as specified from time to time; or
            (3) sent by facsimile copy to The Listing Division on 2295-3599,

            or to such other address or number as may be announced by the Exchange from time to time or in such other manner as may be determined and promulgated by the Exchange from time to time. In addition, a hard copy of such information must be provided to the Exchange if requested by the Exchange.

          • 2.22

            If the information is of an urgent nature, an authorised representative of the issuer or some other responsible officer of the issuer or its Sponsor, financial adviser or legal adviser should communicate the information to the Executive Director — Listing Division or his delegates by telephone, provided always that the communication is confirmed in writing, delivered by hand, electronic means or facsimile in accordance with rule 2.21, such written communication to follow promptly after the telephone communication.

          • 2.23

            Where the GEM Listing Rules require documents to be sent or submitted to the Exchange, they must be sent or delivered to the Listing Division in accordance with rule 2.21, unless otherwise stated in the GEM Listing Rules.

          • 2.23A

            Where the GEM Listing Rules require a certain number of copies of a document to be sent or submitted to the Exchange, the Exchange may require the issuer to provide the Exchange with such lesser or greater number of such copies as the Exchange may reasonably determine.

          • 2.24

            The procedures for delivery of information and documentation to the Exchange and any changes or additions to those procedures may be determined and promulgated by the Exchange from time to time.

        • Structure

          • 2.25

            The GEM Listing Rules fall into three main parts: Chapters 1 to 9 set out matters of general application; Chapters 10 to 25 set out the requirements applicable to the issue of equity securities; and Chapters 26 to 35 set out the requirements applicable to the issue of debt securities. In addition, there are Appendices to certain of these Chapters.

        • Material interest in a transaction

          • 2.26

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

            Note: For the avoidance of doubt, any provision in the GEM Listing Rules requiring any other person to abstain from voting on a transaction or arrangement of an issuer which is subject to shareholders' approval shall be construed as being in addition to the requirement set out in rule 2.26.

          • 2.27

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

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

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

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

          • 2.28

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

            (1) a statement as at the date by reference to which disclosure of the shareholding is made in the listing document or circular as to whether and to what extent any shareholder who is required to abstain from voting under the GEM Listing Rules controls or is entitled to exercise control over the voting right in respect of his shares in the issuer;
            (2) particulars of:
            (a) any voting trust or other agreement or arrangement or understanding (other than an outright sale) entered into by or binding upon any such shareholder; and
            (b) any obligation or entitlement of any such shareholder as at the date by reference to which disclosure of the shareholding of any such shareholder is made in the listing document or circular,
            whereby he has or may have temporarily or permanently passed control over the exercise of the voting right in respect of his shares in the issuer to a third party, either generally or on a case-by-case basis;
            (3) a detailed explanation of any discrepancy between any such shareholder's beneficial shareholding interest in the issuer as disclosed in the listing document or circular and the number of shares in the issuer in respect of which he will control or will be entitled to exercise control over the voting right at the relevant meeting; and
            (4) steps undertaken by the shareholder (if any) to ensure shares being the subject of the discrepancy referred to in rule 2.28(3) are not voted.

        • Fees and other charges

          • 2.29

            Of relevance to issuers, the details of the initial listing fee, annual listing fee, subsequent issue fee and other charges, together with details of the brokerage charge, levies and trading fees on new issues are set out in Appendix 9.

      • Chapter 3 Composition, Powers, Functions and Procedures of the GEM Listing Committee, the GEM Listing Review Committee and the Listing Division

        • General

          • 3.01

            The Board has arranged for all of its powers and functions in respect of all listing matters in relation to GEM to be discharged by the GEM Listing Committee and/or its delegates, subject to the review procedures set out in this Chapter and Chapter 4. Any function which under the GEM Listing Rules may be performed by the Exchange or any power which under the GEM Listing Rules may be exercised by the Exchange may, therefore, be performed or exercised by the GEM Listing Committee and/or its delegates. Accordingly, the GEM Listing Committee and, in relation to certain powers of review, the GEM Listing Review Committee has sole power and authority to act in relation to all listing matters to the exclusion of the Board unless and until the Board revokes these arrangements.

          • 3.02

            The GEM Listing Committee has arranged for most of these powers and functions to be discharged by the Listing Division and the Chief Executive of the Exchange (the "Chief Executive"), subject to the reservations and review procedures set out in this Chapter and Chapter 4. In the first instance, therefore, all matters concerning the GEM Listing Rules will be dealt with by the Listing Division. The Listing Division will also interpret, administer and enforce the GEM Listing Rules subject to the review procedures set out in this Chapter and Chapter 4.

          • 3.03

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

          • 3.04

            All references in Chapters 3 and 4 to decisions and rulings of the Listing Division include decisions and rulings made by the Chief Executive.

        • Application procedures

          • New applicants (3.05 - 3.05A)

            • 3.05

              Subject to rule 3.05A, every application for listing by a new applicant (whether in relation to equity securities or debt securities) should be submitted to the Listing Division which may reject it or recommend the GEM Listing Committee to approve or reject it. However, the GEM Listing Committee has reserved for itself the power to approve all applications for listing from a new applicant and this means that even if such an application is recommended by the Executive Director – Listing Division or the Chief Executive, it must still be approved by the GEM Listing Committee. The GEM Listing Committee may at the request of the Listing Division give an “in principle” approval, that a particular new applicant or its business, or a particular type of security is suitable for listing, at an early stage in the application process (but will again consider the full application after the Listing Division has processed it). Otherwise the GEM Listing Committee will not consider an application from a new applicant until the Listing Division has processed the application. If the GEM Listing Committee approves a listing the Listing Division will normally issue a notification of approval in principle, and then issue a formal approval letter, in due course.

            • 3.05A

              The GEM Listing Committee has delegated to the Executive Director — Listing Division the power to approve any application for listing of debt securities under Chapter 30 (debt issues to professional investors only).

          • Listed issuers (3.06)

            • 3.06

              Applications for the listing of equity securities by a listed issuer will be dealt with by the Listing Division and it is the Executive Director — Listing Division who will normally approve the listing and issue the formal approval letter, in due course. However, the GEM Listing Committee may determine the matter in the first instance at the request of the Listing Division where it considers it appropriate to do so. Applications for the listing of debt securities by a listed issuer shall be dealt with in the same manner as applications by new applicants as set out in rule 3.05.

        • Sponsors

          • 3.07 [Repealed]

            [Repealed 1 January 2007]

        • Guidance

          • 3.08

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

        • Cancellation procedures

          • 3.09

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

            Note: Transfer from GEM to the Main Board is not regarded as a cancellation of listing from the Exchange (see rule 9.24(2)).

        • Disciplinary jurisdiction and sanctions

          • 3.10

            (1)    The Exchange may bring disciplinary actions and impose or issue the sanctions in rule 3.11 against any of the following:—
             
            (a)    a listed issuer or any of its subsidiaries;
             
            (b)    any director of a listed issuer or any of its subsidiaries (or any alternate of such director);
             
            (c)    any member of the senior management of a listed issuer or any of its subsidiaries;
             
            (d)    any substantial shareholder of a listed issuer;
             
            (e)    any significant shareholder;
             
            (f)    any professional adviser of a listed issuer or any of its subsidiaries;
             
            (g)    any employee of a professional adviser of a listed issuer or any of its subsidiaries;
             
            (h)    any authorised representative of a listed issuer;
             
            (i)    any supervisor of a PRC issuer;
             
            (j)    any guarantor in the case of a guaranteed issue of debt securities or structured products; and
             
            (k)    any other party who gives an undertaking to or enters into an agreement with the Exchange.
             
            (2)    For the purposes of this rule:
             
            (a)    “professional adviser” includes any financial adviser, independent financial adviser, lawyer, accountant, property valuer or any other person retained by an issuer to provide professional advice in relation to a matter governed by the GEM Listing Rules. It does not include Sponsors, capital market intermediaries or Compliance Advisers; and
             
            (b)    “senior management” includes:
             
            (i)    any person occupying the position of chief executive, supervisor, company secretary, chief operating officer or chief financial officer, by whatever name called;
             
            (ii)    any person who performs managerial functions under the directors’ immediate authority; or
             
            (iii)    any person referred to as senior management in the listed issuer’s corporate communication or any other publications on the Exchange’s website or on the listed issuer’s website.
             
            (3)    The scope of any disciplinary action taken against a professional adviser under rules 3.10, 3.11 and 3.11B, including any ban imposed on a professional adviser under rule 3.11(9), shall be limited to matters governed by or arising out of the GEM Listing Rules.
             
            (4)    Professional advisers, when acting in connection with GEM Listing Rule matters on which they are instructed to advise, shall use all reasonable efforts to ensure that their clients understand and are advised as to the scope of and their obligations under the GEM Listing Rules. They must not knowingly provide any information to the Exchange which is false or misleading in a material particular.
             

          • 3.11

            If the GEM Listing Committee finds there has been a breach of the GEM Listing Rules by any of the parties named in rule 3.10, it may:—
             
            (1)    issue a private reprimand;
             
            (2)    issue a public statement involving criticism;
             
            (3)    issue a public censure;
             
            (4)    state publicly that in the Exchange's opinion the occupying of the position of director or senior management of a named listed issuer or any of its subsidiaries by an individual may cause prejudice to the interests of investors;
             
            (5)    in the case of serious or repeated failure by a director to discharge his responsibilities under the GEM Listing Rules, state publicly that in the Exchange’s opinion the director is unsuitable to occupy a position as director or within senior management of a named listed issuer or any of its subsidiaries;
             
            (6)    deny the facilities of the market to a listed issuer for a specified period and/or until fulfilment of specified conditions and prohibit dealers and financial advisers from acting or continuing to act for that issuer;
             
            (7)    suspend trading in the listed issuer’s securities or any class of its securities;
             
            (8)    cancel the listing of the listed issuer’s securities or any class of its securities;
             
            (9)    ban a professional adviser or a named individual employed by a professional adviser from representing any or a specified party in relation to a stipulated matter or matters coming before the Listing Division or the GEM Listing Committee for a stated period;
             
            (10)    recommend reporting the conduct of the party in breach to the Commission or another regulatory authority, whether in Hong Kong or overseas (for example, the Financial Secretary or any professional body);
             
            (11)    order rectification or other remedial action to be taken within a stipulated period; and
             
            (12)    take, or refrain from taking, such other action as it thinks fit, including making public any action taken.
             
            Notes:   
             
            (1)    Any reference to the GEM Listing Committee in rules 3.11, 3.11A and 3.11B includes both the GEM Listing Committee and the GEM Listing Review Committee.
             
            (2)    Where the GEM Listing Committee or the GEM Listing Review Committee (as the case may be, after the decision has become final), issues:
             
            (i)    a public sanction under rule 3.11, such sanction will be published with reasons; or
             
            (ii)    a private reprimand, the substance of such sanction may be published with reasons without disclosing the identities of the parties involved.
             
            (3)    In exercising its powers of sanction the Exchange will recognise the differing roles and levels of responsibility of the persons against whom sanctions may lie under rule 3.10.
             
            (4)    For the purposes of this rule and rule 3.11A(2) below, denying "facilities of the market" is not intended to mean cancellation of listing. It is meant to include withholding approval of any matters that require approval from the Exchange, including the issuance of shares.
             

          • 3.11A

            (1)    If a statement under rule 3.11(4) with follow-on actions in sub-rule (2) below, or rule 3.11(5), has been made against an individual, the listed issuer:
             
            (a) named in the statement; or
             
            (b) in respect of which any of its subsidiaries is named in the statement
             
            must include in all of its announcements and corporate communications to be published a reference to the sanction made under rule 3.11(4) or 3.11(5), unless and until that individual ceases to be a director or senior management, as the case may be, of the named listed issuer and/or its subsidiaries.
             
            (2)    If an individual against whom a statement has been made under rule 3.11(4) or 3.11(5) occupies the position of director or senior management, as the case may be, of the named listed issuer or subsidiary, as the case may be, after a date to be determined and specified by the GEM Listing Committee, the GEM Listing Committee may, at any time in its sole discretion, impose the follow-on actions below:
             
            (a)    order that the facilities of the market be denied to that issuer for a specified period; and/or
             
            (b)    suspend or cancel the listing of that issuer's securities or any class of its securities.
             
            (3)    The GEM Listing Committee may make public any follow-on action imposed under rule 3.11A(2).
             

          • 3.11B

            In addition to imposing the sanctions in rule 3.11 when a party has failed to discharge obligations or responsibilities expressly imposed on that party by a specific GEM Listing Rule, the GEM Listing Committee may impose the sanctions in rule 3.11 on any of the parties named in rule 3.10 above, if it finds the party has:-
             
            (1)    failed to comply with a requirement imposed by the Listing Division or the GEM Listing Committee;
             
            (2)    contravened an undertaking given to or breached an agreement with the Exchange in relation to a listing matter; or
             
            (3)    caused by action or omission or knowingly participated in a contravention of the GEM Listing Rules or a requirement referred to in (1) above.
             
            Note:    In respect of parties covered by section 23(8) of the SFO, a sanction may be imposed under rule 3.11B(3) in and only in the circumstances prescribed for disciplinary action in the arrangements agreed from time to time between the Exchange and the relevant professional regulatory body; and, in considering whether a party covered by section 23(8) of the SFO has breached rule 3.11B(3), the Exchange will take into account, among other things, whether such party has knowingly or recklessly facilitated or participated in a breach of the GEM Listing Rules or any undertaking given to or any agreement with the Exchange.

          • 3.12

            The GEM Listing Committee will, if requested by any party to be reprimanded, criticised, censured or otherwise sanctioned in pursuance of the powers contained in rules 3.10, 3.11, 3.11A and 3.11B (a “review applicant”), give its reasons in writing for the decision made against that review applicant pursuant to rules 3.10, 3.11, 3.11A and 3.11B and that review applicant shall have the right to have the decision against him referred to the GEM Listing Review Committee for a further and final review. The GEM Listing Review Committee may endorse, overturn, modify or vary the ruling of the earlier meeting. Subject to rule 3.17A, the decision of the GEM Listing Review Committee on review shall be conclusive and binding on the review applicant. If requested by the review applicant, the GEM Listing Review Committee will give reasons in writing for its decision on review.

          • 3.13

            A request for a review of any decision of the GEM Listing Committee made pursuant to rule 3.12 must be served on the Secretary within seven business days of the issue of the GEM Listing Committee's decision unless written reasons for a decision are requested, in which case a request for a review of that decision must be notified within seven business days of the issue of the written reasons.

          • 3.14

            Any request for the GEM Listing Committee or the GEM Listing Review Committee to give its reasons in writing for its decision shall be made within three business days of the issue of its decision. Where requested, written reasons for a decision will be provided to all parties to the proceedings by the GEM Listing Committee or the GEM Listing Review Committee (as the case may be) as soon as possible and, in any event, within 14 business days of the receipt of the request.

          • 3.15

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

          • 3.16

            The GEM Listing Committee and the GEM Listing Review Committee may from time to time prescribe such procedures and regulations for any review meetings or hearings of the respective Committee as they may think fit, including procedures for appointing from time to time the Chairman for any review hearing, procedures governing members’ conflict of interest and the publication of decisions and reasons.

        • Rights of parties to be heard

          • 3.17

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

        • Disciplinary Reviews Initiated by the Commission

          • 3.17A

            (1) The Commission shall have the right to request in writing a review of any disciplinary decision of the GEM Listing Committee by the GEM Listing Review Committee under this rule.
            (2) In reviewing a matter, the GEM Listing Review Committee shall have due regard to the rights and interests of all third parties who would be directly affected by the further review of the matter.
            (3) The Commission may request written reasons for a decision of the GEM Listing Committee or the GEM Listing Review Committee if no written reasons were provided in the decision of the relevant Committee and if the relevant party does not request written reasons under rule 3.14. The Commission will make such a request within seven days of the expiry of the time stipulated for request of written reasons under rule 3.14. Where the relevant party requests written reasons, the written reasons provided to the relevant party will be provided to the Commission and the Listing Division. Similarly, written reasons provided to the Commission pursuant to the Commission’s request will also be provided to the relevant party and the Listing Division.
            (4) If the Commission decides to request a review of a matter, it will do so within seven business days after receipt of the relevant decision or, if either the Commission or the relevant party requests written reasons for the decision, those written reasons.
            (5) The GEM Listing Review Committee and/or its Chairman may prescribe the procedures for reviewing a matter under this rule as they may think fit.
            (6) The relevant party, the Listing Division and the Commission will have the right to make written submissions to the GEM Listing Review Committee, and the GEM Listing Review Committee shall take into account all such written submissions when reaching its decision. This applies to both a review requested by the Commission and any further and final review requested by the relevant party pursuant to rule 3.17A(7).
            (7) Where the GEM Listing Review Committee overturns, modifies or varies the decision subject to review, the relevant party shall have a further and final right to seek a review of the decision by a second GEM Listing Review Committee. Subject to the facts and circumstances arising in the earlier meeting(s) in each case and subject further to the absolute discretion of the proposed Chairman of the GEM Listing Review Committee, all of the members present at the further and final review shall be persons who were not present at the earlier review hearing of the GEM Listing Review Committee. In the event there are insufficient persons available to make up the required quorum for the GEM Listing Review Committee, the proposed Chairman of the GEM Listing Review Committee shall direct the Secretary to select sufficient additional members to make up the required quorum by such method as the proposed Chairman considers appropriate in the proposed Chairman’s absolute discretion.

        • Composition of the GEM Listing Committee

          • 3.18

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

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

          • 3.19 [Repealed]

            [Repealed May 2006]

        • Appointment and removal of members of the GEM Listing Committee

          • 3.20 [Repealed]

            [Repealed 1 January 2016]

          • 3.21

            Members of the GEM Listing Committee shall be appointed by the Board. The Board may appoint only persons nominated in accordance with rule 3.22.

          • 3.22

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

          • 3.23

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

          • 3.23A

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

          • 3.24

            All members of the GEM Listing Committee shall vacate office at the end of their term unless they are re-appointed by the Board for a further full term or such shorter period as the Board may stipulate at the time of re-appointment. Subject to rule 3.26, all members of the GEM Listing Committee are eligible for re-appointment.

          • 3.25

            The Board may fill any casual vacancies that may occur in the GEM Listing Committee by reason of resignation, retirement or otherwise. A person eligible for appointment to fill any such casual vacancy shall be nominated by the Listing Nominating Committee and shall be a person who is eligible within the same category of rule 3.18 as the member who has vacated office. The term of a member appointed to fill a casual vacancy in an office shall end on the same date as the term of the member whose vacation from that office created the casual vacancy.

          • 3.26

            Members of the GEM Listing Committee may only remain in office for a maximum of six consecutive years in addition to any period of appointment pursuant to rule 3.25 for the purpose of filling a casual vacancy. A member who has served for the maximum period permitted by this rule may be eligible for re-appointment after the lapse of two years from the date on which he last vacates office. Notwithstanding the foregoing, in exceptional circumstances, the Listing Nominating Committee shall have the discretion to nominate a person for re-appointment at any time before the lapse of two years from the date such person vacates office and the Board shall have the power to appoint such person.

          • 3.27

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

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

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

        • Functions and powers of the GEM Listing Committee

          • 3.28

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

        • Conduct of meetings of the GEM Listing Committee

          • 3.29

            The GEM Listing Committee shall meet for the despatch of business, adjourn and otherwise regulate its meetings in accordance with the provisions of the rules made by the Board for this purpose, including rules governing members’ conflicts of interest, subject to the provisions of this rule. The quorum necessary for the transaction of any business by the GEM Listing Committee shall be five members present in person. The Chief Executive of HKEC will not attend meetings of the GEM Listing Committee at which the GEM Listing Committee is determining a matter in the first instance or on review.

            • 3.30 [Repealed]

              [Repealed 6 July 2019]

            • 3.31 [Repealed]

              [Repealed 6 July 2019]

            • 3.32 [Repealed]

              [Repealed 6 July 2019]

            • 3.33 [Repealed]

              [Repealed 6 July 2019]

            • 3.34 [Repealed]

              [Repealed 6 July 2019]

            • 3.35 [Repealed]

              [Repealed 6 July 2019]

            • 3.36 [Repealed]

              [Repealed 6 July 2019]

            • 3.37 [Repealed]

              [Repealed 6 July 2019]

            • 3.38 [Repealed]

              [Repealed 6 July 2019]

        • Composition of the GEM Listing Review Committee

          • 3.38A

            Subject to casual vacancies from time to time the GEM Listing Review Committee shall consist of 20 members or such greater number of members as the Board may from time to time agree.  An individual who was a member of the GEM Listing Committee may be eligible for appointment as a member of the GEM Listing Review Committee after the lapse of two years from the date on which he last vacates office of the GEM Listing Committee.

          • 3.38B

            The GEM Listing Review Committee shall comprise:

            (1) at least six individuals who the Listing Nominating Committee considers will represent the interest of investors; and
            (2) the remaining members who the Listing Nominating Committee considers will represent a suitable balance of representatives of listed issuers and market practitioners including lawyers, accountants, corporate finance advisers and Exchange Participants (or their officers), and who have experience and expertise in GEM Listing Rule matters, or are familiar with the work of the GEM Listing Committee.

            No current GEM Listing Committee members or representatives of the Commission or the HKEC shall be members of the GEM Listing Review Committee.

        • Appointment and Removal of Members of the GEM Listing Review Committee

          • 3.38C

            Members of the GEM Listing Review Committee shall be appointed by the Board. The Board may appoint only persons nominated in accordance with rule 3.38D.

          • 3.38D

            The persons eligible for appointment or re-appointment in each year as members of the GEM Listing Review Committee shall be nominated by the Listing Nominating Committee.

          • 3.38E

            Members of the chairmen pool of the GEM Listing Review Committee shall be nominated by the Listing Nominating Committee and appointed by the Board. The chairmen pool shall comprise at least four members of the GEM Listing Review Committee.

          • 3.38F

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

          • 3.38G

            All members of the GEM Listing Review Committee shall vacate office at the end of their term unless they are re-appointed by the Board for a further full term or such shorter period as the Board may stipulate at the time of re-appointment. Subject to rule 3.38I, all members of the GEM Listing Review Committee are eligible for re-appointment.

          • 3.38H

            The Board may fill any casual vacancies that may occur in the GEM Listing Review Committee by reason of resignation, retirement or otherwise. A person eligible for appointment to fill any such casual vacancy shall be nominated by the Listing Nominating Committee and shall be a person who is eligible within the same category of rule 3.38B as the member who has vacated office. The term of a member appointed to fill a casual vacancy in an office shall end on the same date as the term of the member whose vacation from that office created the casual vacancy.

          • 3.38I

            Members of the GEM Listing Review Committee may only remain in office for a maximum of six consecutive years in addition to any period of appointment pursuant to rule 3.38H for the purpose of filling a casual vacancy. A member who has served for the maximum period permitted by this rule may be eligible for re-appointment after the lapse of two years from the date on which he last vacates office. Notwithstanding the foregoing, in exceptional circumstances, the Listing Nominating Committee shall have the discretion to nominate a person for re-appointment at any time before the lapse of two years from the date such person vacates office and the Board shall have the power to appoint such person.

          • 3.38J

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

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

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

        • Functions and powers of the GEM Listing Review Committee

          • 3.38K

            The GEM Listing Review Committee shall be the review body in respect of any decision of the GEM Listing Committee and, where the Commission had requested a review by the GEM Listing Review Committee of a decision made by the GEM Listing Committee, the further and final review body for decisions of the GEM Listing Review Committee as provided in rules 3.17A(7) and 4.16(7).

        • Conduct of meetings of the GEM Listing Review Committee

          • 3.38L

            The GEM Listing Review Committee shall meet for the despatch of business, adjourn and otherwise regulate its meetings in accordance with the provisions of the rules made by the Board for this purpose, including rules governing members’ conflicts of interest, subject to the provisions of this rule 3.38L. The quorum necessary for the transaction of any business of the GEM Listing Review Committee shall be five members present in person. All review hearings shall be heard de novo. The GEM Listing Review Committee will rehear the case and decide it afresh, after considering all the relevant evidence and arguments made at the earlier hearings and any additional evidence or information which may be adduced in accordance with the procedures and regulations for review hearings and any directions made by the GEM Listing Review Committee. The GEM Listing Review Committee will consider the decision of the previous decision making body and state the reasons for its own decision. The GEM Listing Review Committee will also address the prior decision (and the basis therefor) in its own decision, whether it is upholding or overturning that prior decision.

        • Bona fide acts of Committee members

          • 3.39

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

        • Transitional

          • 3.40

            All disciplinary review hearings for disciplinary proceedings commenced before the implementation of the new rules will be conducted under Chapters 3 and 4 of the GEM Listing Rules in force as at the time of commencement of disciplinary proceedings. The Committees in existence before the implementation of the new rules will continue in existence until all such proceedings have been concluded and the rules and procedures then in force will continue to apply for the purpose of the conduct of these matters.

            Note:

            (1) Disciplinary proceedings are commenced upon the Listing Division submitting a report to the Secretary setting out its case and all material facts and submissions upon which it intends to rely.
            (2) For the purpose of this rule, the reference to “new rules” refers to the amendments to this Chapter and Chapter 4 which came into effect on 6 July 2019.

      • Chapter 4 Review Procedure

        • General

          • 4.01

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

        • Definitions and Interpretation

          • 4.01A

            In this Chapter:

            (1) Where this Chapter provides a time limit for performing any act within a specified number of business days of receipt of the relevant document, the act is to be performed within the specified number of business days after, but not including, the date of receipt of the relevant document.
            (2) "Return Decision" means the Listing Division's decision to return a new applicant's listing application and all related documents to its Sponsor (except for the retention of a copy of these documents for the Exchange's record) on the ground that the information in the listing application form, Application Proof, or any other relevant documents under rules 12.22 and 12.23 is not substantially complete under rule 12.09(1). A Return Decision does not include a rejection decision under rule 4.05(1)
            (3) "Review Request" means a written request by the relevant party for a review of the decision of the Listing Division, GEM Listing Committee or the GEM Listing Review Committee (as the case may be) under rules 4.05, 4.06, 4.06A and 4.16(7) which must be served on the Secretary of the GEM Listing Committee or the Secretary of the GEM Listing Review Committee (hereinafter referred to as the "Secretary"), as the case may be

          • 4.02

            The GEM Listing Committee may at any time conduct a hearing in relation to any matter relating to or arising out of the GEM Listing Rules and it may require the attendance at such hearing of such persons and the production to such hearing of such documents as it deems appropriate. As provided in this Chapter, certain decisions of the Listing Division may be referred to the GEM Listing Committee for review; and certain decisions of the GEM Listing Committee may be referred to the GEM Listing Review Committee for a further and final review.

          • 4.02A

            This Chapter sets out the mechanism, procedures and related provisions for the review of non-disciplinary decisions by the GEM Listing Committee and the GEM Listing Review Committee.

          • 4.03

            The GEM Listing Committee and the GEM Listing Review Committee may from time to time prescribe such procedures and regulations for any review hearings of the respective Committee as they may think fit, including procedures for appointing from time to time the Chairman for any review hearing, procedures governing members’ conflict of interest and the publication of decisions and reasons.

          • 4.04

            (1)    Notwithstanding rule 4.03 and provisions set out in Form 5A, a listed issuer or new applicant shall submit to the GEM Listing Committee information for an application for listing pursuant to each Form 5A no more than two times, subject always to:—
             
            (a)    the GEM Listing Committee permitting otherwise if it considers necessary; and
             
            (b) only one right of review by the listed issuer or new applicant against the latest decision made by the GEM Listing Committee as at the date of the Review Request pursuant to rule 4.08.
             
            (c) [Repealed 6 July 2019]
             
            (2) (a)    The GEM Listing Committee shall only consider a revised application for listing if the listed issuer or the new applicant, as the case may be, provides new information for consideration by the GEM Listing Committee.
             
              (b) [Repealed 1 January 2020]
             
            (3)    Subject to rule 4.04(1), the listed issuer or the new applicant may, if it considers necessary, submit its application for listing together with a new Form 5A again for the consideration by the GEM Listing Committee.
             

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

          • 4.05

            (1)     (a)     Where the Listing Division rejects an application for listing by a new applicant, the new applicant has the right to have the decision referred to the GEM Listing Committee for a review. 
             
              (b) Where the GEM Listing Committee rejects an application for listing by a new applicant or endorses, modifies or varies the Listing Division’s decision to reject an application, the new applicant has the right to have the decision referred to the GEM Listing Review Committee for a further and final review.
             
              (c) Subject to rule 4.16, the decision of the GEM Listing Review Committee on the review is conclusive and binding on the new applicant.

            Note: A rejection decision under rule 4.05(1) does not include a Return Decision.
             
            (2) (a) A new applicant and/or its Sponsor have the right to have a Return Decision reviewed by the GEM Listing Committee.
             
              (b) Where the GEM Listing Committee endorses the Return Decision, the new applicant and/or the Sponsor have the right to have the Return Decision referred to the GEM Listing Review Committee for a further and final review. Subject to rule 4.16, the decision of the GEM Listing Review Committee on the review is conclusive and binding on the new applicant and the Sponsor.

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

          • 4.06

            (1) Where the Listing Division makes a decision on the listed issuer, the listed issuer may request the decision be referred to the GEM Listing Committee for a review by the GEM Listing Committee.
            (2) Subject to rule 4.04, where the GEM Listing Committee endorses, modifies or varies the Listing Division’s decision or makes its own decision, the listed issuer may request the decision be referred to the GEM Listing Review Committee for a further and final review.
            (3) Subject to rule 4.16, the decision of the Listing Division or the GEM Listing Committee, as the case may be, shall be conclusive and binding on the listed issuer if the listed issuer does not seek review of the decision of the Listing Division or the GEM Listing Committee, as the case may be; otherwise, the decision of the GEM Listing Review Committee shall be conclusive and binding on the listed issuer.

        • Review cases of a compliance officer or an authorised representative to be considered by the GEM Listing Committee and the GEM Listing Review Committee

          • 4.06A

            (1) Where the Listing Division decides that a person’s appointment as an issuer’s compliance officer appointed under rule 5.19 or authorised representative under rule 5.24 should be terminated, that compliance officer or authorised representative, as the case may be, shall have the right to have that decision referred to the GEM Listing Committee for review.
            (2) Where the GEM Listing Committee endorses, modifies or varies the Listing Division’s decision, that compliance officer or authorised representative, as the case may be, shall have the right to have that decision reviewed by the GEM Listing Review Committee, whose decision shall be conclusive and binding on both the listed issuer and that compliance officer or authorised representative, as the case may be.

          • 4.07 [Repealed]

            [Repealed 6 July 2019]

        • Time for application

          • 4.08

            (1)    Subject to (3) below, a Review Request for reviewing any decision of the Listing Division, the GEM Listing Committee or the GEM Listing Review Committee (as the case may be) under rules 4.05(1), 4.06, 4.06A and 4.16(7) must be served on the Secretary within seven business days of the issue of either the relevant decision, or if the relevant party requests written reasons under rule 4.13(1), those written reasons.
             
            (2)    A Review Request for reviewing a Return Decision or a GEM Listing Committee's decision to endorse a Return Decision must include the grounds for the review together with reasons and be served on the Secretary within five business days of the issue of the written decision under rule 4.13(2).
             
            (3)    A Review Request made under rule 4.06 for reviewing a decision of the Listing Division to direct the resumption of dealings or, if such decision has been referred to the GEM Listing Committee for review, the GEM Listing Committee's decision on such review, must include the grounds for the review together with reasons and be served on the Secretary within five business days of the issue of the written decision under rule 4.13(3).
             

        • Notice of review hearing

          • 4.09

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

        • Prehearing procedures

          • 4.10

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

        • Conduct of review hearing

          • 4.11

            (1)    The GEM Listing Committee or the GEM Listing Review Committee shall meet for the despatch of business, adjourn and otherwise regulate its hearings in accordance with the provisions of the rules made by the Board for this purpose, including rules governing members’ conflicts of interest, subject to the provisions of this rule. All review hearings under this Chapter shall be heard de novo. The GEM Listing Committee and the GEM Listing Review Committee (as the case may be) will rehear the case and decide it afresh, after considering all the relevant evidence and arguments made at the earlier hearings and any additional evidence or information which may be adduced in accordance with the procedures and regulations for review hearings and any directions made by the GEM Listing Committee or the GEM Listing Review Committee. The GEM Listing Review Committee will consider the decision of the previous decision making body and state the reasons for its own decision. The GEM Listing Review Committee will also address the prior decision (and the basis therefor) in its own decision, whether it is upholding or overturning that prior decision.
             
            (2) The quorum necessary for the transaction of any business by the GEM Listing Committee or the GEM Listing Review Committee shall be five members present in person.
             
            (3) The Chief Executive of HKEC will not attend meetings of the GEM Listing Committee at which the GEM Listing Committee is determining a matter in the first instance or attend review hearings of the GEM Listing Committee.
             
            (4) [Repealed 6 July 2019]
             
            (5) (a)    [Repealed 6 July 2019]
             
              (b) [Repealed 6 July 2019]
             
              (c) [Repealed 6 July 2019]
             
              (d) In a review of a Return Decision or a GEM Listing Committee’s decision to endorse a Return Decision, any materials submitted to the GEM Listing Committee or the GEM Listing Review Committee must be based on the original materials submitted to the Listing Division when the new applicant first filed its listing application.
             
            (6) [Repealed 1 July 2008]
             
            (7) (a) At a review hearing before the GEM Listing Committee or the GEM Listing Review Committee, the directors of the new applicant or the listed issuer (as the case may be) have the right to attend the hearing, to make submissions and to be accompanied by one representative of each of the Sponsor, the Compliance Adviser, authorised representatives, proposed or otherwise, the financial adviser, the legal adviser and auditors of the new applicant or the listed issuer (as the case may be); a Sponsor, Compliance Adviser or authorised representative may be accompanied by its/his legal adviser.
             
              (b) [Repealed 1 January 2020]
             
            (8) In the case of a review hearing sought by a compliance officer or an authorised representative under rule 4.06A, the compliance officer or authorised representative, as the case may be, shall have the right to attend the review hearing, to make submissions and may be accompanied by his legal adviser.
             
            (9) Sub-rule (7) does not apply to a review relating to a Return Decision. In a review hearing of a Return Decision by the GEM Listing Committee or the GEM Listing Review Committee, the directors of the new applicant and/or one representative of each Sponsor have the right to attend the hearing, to make submissions and to be accompanied, in the case of the directors of the new applicant, by one representative of each of the new applicant’s financial adviser, legal adviser and auditors; and in the case of each Sponsor, by its legal adviser. If all the parties seeking a review decide not to attend the hearing, the hearing will proceed based on the documents submitted for hearing. For the avoidance of doubt, if a party seeking a review decides not to attend the hearing, the hearing will proceed in his absence.
             

        • Role of the Secretary

          • 4.12

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

        • Request for written reasons

          • 4.13

            (1)    Except for a review relating to a Return Decision or a decision to direct the resumption of dealings, any request for the Listing Division, the GEM Listing Committee or the GEM Listing Review Committee (as the case may be) to give written reasons for its decision shall be made by a relevant party within three business days of the issue of the decision. The Listing Division, the GEM Listing Committee or the GEM Listing Review Committee (as the case may be) will provide written reasons within 14 business days of the receipt of the request. Such written reasons will be provided to all parties to the review.
             
            (2)    The Listing Division, the GEM Listing Committee or the GEM Listing Review Committee (as the case may be) will provide written reasons for its Return Decision or decision to endorse a Return Decision.
             
            (3)    The Listing Division, the GEM Listing Committee or the GEM Listing Review Committee (as the case may be) will provide written reasons for its decision to direct the resumption of trading under rule 9.12 or decision to endorse such a decision.
             

        • Publication of decisions

          • 4.13A

            The conclusive and binding decisions of the GEM Listing Review Committee under this Chapter shall be published on the Exchange’s website unless otherwise directed by the review body. In the event of a further and final review under rule 4.16(7), the decision of the GEM Listing Review Committee which heard the review initiated by the Commission and the decision of the GEM Listing Review Committee which heard the further and final review shall both be published.

        • Costs

          • 4.14

            Upon submission of a Review Request pursuant to rule 4.08, a non-refundable fee of HK$60,000 is payable to the Exchange, for each review, by any party seeking to review a decision of the Listing Division, the GEM Listing Committee or (in relation to a review under rule 4.16(7)) the GEM Listing Review Committee, as the case may be, pursuant to this Chapter.

        • Aggrieved party

          • 4.15

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

        • Non-disciplinary reviews initiated by the Commission

          • 4.16

            (1) The Commission shall have the right to request in writing a review of any non-disciplinary matter, including a decision of the GEM Listing Committee by the GEM Listing Review Committee under this rule.
            (2) In reviewing a matter, the review body shall have due regard to the rights and interests of all third parties who would be directly affected by the further review of the matter.
            (3) The Commission may request written reasons for a decision of the GEM Listing Committee or the GEM Listing Review Committee if no written reasons were provided in the decision of the relevant Committee and if the relevant party does not request written reasons under rule 4.13(1). The Commission will make such a request within seven days of the expiry of the time stipulated for request of written reasons under rule 4.13(1). Where the relevant party requests written reasons, the written reasons provided to the relevant party will be provided to the Commission and the Listing Division. Similarly, written reasons provided to the Commission pursuant to the Commission’s request will also be provided to the relevant party and the Listing Division.
            (4) If the Commission decides to request a review of a matter, it will do so within seven business days after receipt of the relevant decision or, if either the Commission or the relevant party requests written reasons for the decision, those written reasons.
            (5) The review body and/or its Chairman may prescribe the procedures for reviewing a matter under this rule as they may think fit.
            (6) The relevant party, the Listing Division and the Commission will have the right to make written submissions to the review body, and the review body shall take into account all such written submissions when reaching its decision. This applies to both a review requested by the Commission and any further and final review requested by the relevant party pursuant to rule 4.16(7).
            (7) Where the review body overturns, modifies or varies the decision subject to review, the relevant party shall have a further and final right to seek a review of the decision by the GEM Listing Review Committee. Subject to the facts and circumstances arising in the earlier meeting(s) in each case and subject further to the absolute discretion of the proposed Chairman of the GEM Listing Review Committee, all of the members present at the further and final review shall be persons who were not present at the earlier review hearing of the GEM Listing Review Committee (if any). In the event there are insufficient persons available to make up the required quorum for the GEM Listing Review Committee, the proposed Chairman of the GEM Listing Review Committee shall direct the Secretary to select sufficient additional members to make up the required quorum by such method as the proposed Chairman considers appropriate in the proposed Chairman’s absolute discretion.

        • Transitional

          • 4.17

            (1) All non-disciplinary review hearings in respect of the following decisions will be conducted under Chapters 3 and 4 of the GEM Listing Rules in force immediately before the implementation of the new rules:
            (a) subject to (b) below, any first instance non-disciplinary decision made before the implementation of the new rules;
            (b) any decision made under rule 9.15(1) before the implementation of the new rules and any follow on or further decision made in relation to those decisions (including a decision to cancel the listing if an issuer fails to remedy the specified matters within the specified period); and
            (c) any review decision of the decisions referred to in (a) or (b) above.
            (2) The Committees in existence before the implementation of the new rules will continue in existence until all relevant review proceedings have been concluded and the rules and procedures then in force will continue to apply for the purpose of the conduct of the above matters.

            Note: For the purpose of this rule, the reference to “new rules” refers to the amendments to this Chapter 3 and Chapter 4 which came into effect on 6 July 2019.

      • Chapter 5 Directors, Company Secretary, Board Committees, Authorised Representatives and Corporate Governance Matters

        • Directors

          • 5.01

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

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

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

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

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

          • 5.02

            Directors must have the character, experience and integrity and be able to demonstrate a standard of competence commensurate with their position as directors of an issuer. The Exchange may request information regarding the background, experience, other business interests or character of any director or proposed director of an issuer. The Exchange expects all directors of an issuer:—
             
            (1) to be cognizant of the GEM Listing Rules and reasonably familiar with the obligations and duties imposed upon them and the issuer pursuant to the GEM Listing Rules, the Securities and Futures Ordinance, the Companies Ordinance, the Takeovers Code and the Code on Share Buy-backs. The Exchange reserves a right to require directors to demonstrate their knowledge and understanding of the same; and
             
            (2)    to respond, in a prompt and efficient manner, to all enquiries directed at them by the Exchange.
             

          • 5.02A

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

          • 5.03

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

          • 5.04

            Every director shall comply with the required standard of dealings set out in rules 5.48 to 5.67 of this Chapter or the issuer's own set of rules on no less exacting terms. (See rules 5.46 and 5.47)

          • Independent non-executive directors (5.05-5.13)

            • 5.05

              Every board of directors of an issuer must include:
               
              (1) at least 3 independent non-executive directors; and
               
              (2)    at least one of the independent non-executive directors must have appropriate professional qualifications or accounting or related financial management expertise.
               
                Note:  With regard to "appropriate accounting or related financial management expertise", the Exchange would expect the person to have, through experience as a public accountant or auditor or as a chief financial officer, controller or principal accounting officer of a public company or through performance of similar functions, experience with internal controls and in preparing or auditing comparable financial statements or experience reviewing or analysing audited financial statements of public companies. It is the responsibility of the board to determine on a case-by-case basis whether the candidate is suitable for the position. In making its decision, the board must evaluate the totality of the individual's education and experience.
               

            • 5.05A

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

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

            • 5.06

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

              (1) the minimum number required under rule 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; or
              (2) one-third of the board as required under rule 5.05A.

              The issuer shall appoint a sufficient number of independent non-executive directors to meet the minimum number required under rule 5.05(1) or 5.05A or appoint an independent non-executive director to meet the requirement set out in rule 5.05(2) within three months after failing to meet the requirement(s).

            • 5.07

              In addition to fulfilling the requirements and continuing obligations of rules 5.01, 5.02 and 5.09, every independent non-executive director must have the character, integrity, independence and experience to fulfil his role effectively. The Exchange may stipulate a minimum number of independent non-executive directors which is higher than 3 if, in the opinion of the Exchange, the size of the board or other circumstances of the issuer justify it.

            • 5.08 [Repealed]

              [Repealed 1 October 2020]

            • 5.09

              In assessing the independence of non-executive directors, the Exchange will take into account the following factors, none of which is necessarily conclusive. Independence is more likely to be questioned if the director:—
               
              (1)    holds more than 1% of the number of issued shares of the issuer;
               
              Notes: 1. An issuer wishing to appoint an independent non-executive director holding an interest of more than 1% must demonstrate, prior to such appointment, that the candidate is independent. A candidate holding an interest of 5% or more will normally not be considered independent.
                2. When calculating the 1% limit set out in rule 5.09(1), the issuer must take into account the total number of shares held legally or beneficially by the director, together with the total number of shares which may be issued to the director or his nominee upon exercise of any outstanding share options, convertible securities and other rights (whether contractual or otherwise) to call for the issue of shares.
              (2) has received an interest in any securities of the issuer as a gift, or by means of other financial assistance, from a core connected person or the issuer itself. However, subject to Note 1 to rule 5.09(1), the director will still be considered independent if he receives shares or interests in securities from the issuer or its subsidiaries (but not from core connected persons) as part of his director's fee or pursuant to share option schemes established in accordance with Chapter 23;
               
              (3) is or was a director, partner or principal of a professional adviser which currently provides or has within two years immediately prior to the date of his proposed appointment provided services, or is or was an employee of such professional adviser who is or has been involved in providing such services during the same period, to:
               
              (a)    the listed issuer, its holding company or any of their respective subsidiaries or core connected persons; or
               
              (b) any person who was a controlling shareholder or, where there was no controlling shareholder, any person who was the chief executive or a director (other than an independent non-executive director), of the listed issuer within two years immediately prior to the date of the proposed appointment, or any of their close associates;
               
              (4) currently, or within one year immediately prior to the date of the person's proposed appointment, has or had a material interest in any principal business activity of or is or was involved in any material business dealings with the issuer, its holding company or their respective subsidiaries or with any core connected persons of the issuer;
               
              (5) is on the board specifically to protect the interests of an entity whose interests are not the same as those of the shareholders as a whole;
               
              (6) is or was connected with a director, the chief executive or a substantial shareholder of the issuer within 2 years immediately prior to the date of his proposed appointment;

              Note: Without prejudice to the generality of the foregoing, any person cohabiting as a spouse with, and any child, step-child, parent, step-parent, brother, sister, stepbrother and step-sister of, a director, the chief executive or a substantial shareholder of the issuer is, for the purpose of rule 5.09(6), considered to be connected with that director, chief executive or substantial shareholder. A father-in-law, mother-in-law, son-in-law, daughter-in-law, grandparent, grandchild, uncle, aunt, cousin, brother-in-law, sister-in-law, nephew and niece of a director, the chief executive or a substantial shareholder of the issuer may in some circumstances also be considered to be so connected. In such cases, the issuer will need to provide the Exchange with all relevant information to enable the Exchange to make a determination.
               
              (7) is, or has at any time during the 2 years immediately prior to the date of his proposed appointment been, an executive or a director (other than an independent non-executive director) of the issuer, of its holding company or of any of their respective subsidiaries or of any core connected persons of the issuer;
               
              Note: An "executive" includes any person who has any management function in the company and any person who acts as a company secretary of the company.
              (8) is financially dependent on the issuer, its holding company or any of their respective subsidiaries or core connected persons of the issuer.
               
              Independent non-executive directors shall submit to the Exchange a written confirmation which must state:
               
              (a)    their independence as regards each of the factors referred to in rule 5.09(1) to (8);
               
              (b) their past or present financial or other interest in the business of the issuer or its subsidiaries or any connection with any core connected person (as such term is defined in the GEM Listing Rules) of the issuer, if any; and
               
              (c) that there are no other factors that may affect their independence the same time as the submission of the declaration, undertaking and acknowledgement in the relevant form set out in Appendix 6.
               
              Each independent non-executive director shall inform the Exchange as soon as practicable if there is any subsequent change of circumstances which may affect his independence and must provide an annual confirmation of his independence to the issuer. The issuer must confirm in each of its annual reports whether it has received such confirmation and whether it still considers the independent non-executive director to be independent.
               
              Notes: 1. The factors set out in rule 5.09 are included for guidance only and are not intended to be exhaustive. The Exchange may take account of other factors relevant to a particular case in assessing independence.
               
                2. When determining the independence of a director under rule 5.09, the same factors should also apply to the director's immediate family members. "Immediate family member" is defined under rule 20.10(1)(a).

            • 5.10

              Where a proposed independent non-executive director fails to meet any of the independence guidelines set out in rule 5.09, the issuer must demonstrate, prior to the proposed appointment, that the person is independent. The issuer must also disclose the reasons why such person is considered to be independent in the announcement of his appointment as well as in the next annual report published after his appointment. In cases of doubt, the issuer must consult the Exchange at an early stage.

            • 5.11 [Repealed]

              [Repealed 1 October 2020]

            • 5.12

              If an independent non-executive director resigns or is removed from office, both the issuer and the individual should immediately notify the Exchange, in each case stating the reasons therefor.

            • 5.12A [Repealed]

              [Repealed 1 March 2019]

            • 5.13 [Repealed]

              [Repealed 1 January 2005]

            • 5.13A

              Directors of a listed issuer shall inform the Exchange (in the manner prescribed by the Exchange from time to time):
               
              (1)    as soon as reasonably practicable after their appointment, their telephone number, mobile phone number, facsimile number (if available), email address (if available), residential address and contact address (if different from the residential address) for correspondence from and service of notices and other documents by the Exchange or the Commission;
               
              (2)    for so long as they remain as directors of the issuer, any change to the contact information as described in sub-rule (1) as soon as reasonably practicable and in any event within 28 days of such change; and
               
              (3)    for a period of 3 years from the date on which they cease to be directors of the issuer, any change to the contact information as described in sub-rule (1) as soon as reasonably practicable and in any event within 28 days of such change.
               
              Any correspondence from and/or service of notices and other documents by the Exchange or the Commission to the directors when they are directors of the listed issuer or after they cease to be so, for whatever purposes (including but not limited to the service of notice of disciplinary proceedings) shall be deemed to have been validly and adequately served on them when the document or notice is served personally or is sent by post, facsimile or email to the address or number they provide to the Exchange. It is the responsibility of directors and former directors to keep the Exchange informed of their up-to-date contact details. If directors or former directors fail to provide the Exchange with their up-to-date contact details or arrange for notices, documents or correspondence to be forwarded to them, they may be not ed to any proceedings commenced against them by the Exchange or the Commission.
               

        • Company secretary

          • 5.14

            The issuer must appoint as its company secretary an individual who, by virtue of his academic or professional qualifications or relevant experience, is, in the opinion of the Exchange, capable of discharging the functions of company secretary.
             
            Notes:  1    The Exchange considers the following academic or professional qualifications to be acceptable:
             
            (a)    a Member of The Hong Kong Chartered Governance Institute;
             
            (b)    a solicitor or barrister (as defined in the Legal Practitioners Ordinance); and
             
            (c)    a certified public accountant (as defined in the Professional Accountants Ordinance).
             
              2    In assessing "relevant experience", the Exchange will consider the individual's:
             
            (a)    length of employment with the issuer and other issuers and the roles he played;
             
            (b)    familiarity with the GEM Listing Rules and other relevant law and regulations including the Securities and Futures Ordinance, Companies Ordinance, Companies (Winding Up and Miscellaneous Provisions) Ordinance, and the Takeovers Code;
             
            (c)    relevant training taken and/or to be taken in addition to the minimum requirement under rule 5.15; and
             
            (d)    professional qualifications in other jurisdictions.
             

          • 5.15

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

          • 5.16 [Repealed]

            [Repealed 1 January 2009]

          • 5.17 [Repealed]

            [Repealed 1 January 2009]

          • 5.18 [Repealed]

            [Repealed 1 January 2009]

        • Compliance officer

          • 5.19

            Every issuer must ensure that, at all times, one of its executive directors assumes responsibility for acting as the issuer's compliance officer.

            Note: This rule and rule 5.23 do not apply to an issuer of debt securities, the equity securities of which are not listed on GEM.

          • 5.20

            The compliance officer's responsibilities must include, as a minimum, the following matters:—

            (1) advising on and assisting the board of directors of the issuer in implementing procedures to ensure that the issuer complies with the GEM Listing Rules and other relevant laws and regulations applicable to the issuer; and
            (2) responding promptly and efficiently to all enquiries directed at him by the Exchange.

          • 5.21

            A person appointed as the compliance officer should only terminate his appointment after first notifying the Exchange of such proposed termination and the reasons therefor; and except in exceptional circumstances the issuer should not terminate the appointment of any person as the compliance officer until it has appointed a replacement. Where a person's appointment as the compliance officer is terminated, both the issuer and the individual concerned should immediately notify the Exchange of such termination, in each case stating the reason why such appointment was terminated.

          • 5.22

            If the Exchange is not satisfied that any person appointed as the compliance officer is fulfilling his responsibilities adequately, it may require the issuer to terminate his appointment as compliance officer and appoint or designate a replacement.

          • 5.23

            If, at any time, the issuer fails to appoint or does not have a compliance officer, the issuer must immediately announce this matter in accordance with the publication requirements set out in Chapter 16, failing which the Exchange reserves the right to announce the same.

        • Authorised representatives

          • 5.24

            Every issuer must ensure that, at all times, it has 2 authorised representatives. The authorised representatives must be 2 individuals from amongst the issuer's executive directors and company secretary (unless the Exchange, in exceptional circumstances, agrees otherwise).

          • 5.25

            The responsibilities of an authorised representative are:—

            (1) supplying the Exchange with details in writing of how to contact him including home, office, mobile and other telephone numbers, email address and correspondence address (if the authorised representative is not based at the registered office), facsimile numbers if available, and any other contact details prescribed by the Exchange from time to time;
            (2) for so long as the issuer continues to have a Sponsor or Compliance Adviser, assisting the Sponsor or Compliance Adviser in their roles as set out in the GEM Listing Rules, in particular the Sponsor's role as the principal channel of communication with the Exchange concerning the affairs of the issuer;

            Notes:
            1 In this regard, the authorised representatives shall provide the Sponsor with the information necessary to enable the Sponsor to fulfil its duty of communicating on the issuer's behalf with the Exchange and ensure the issuer meets its obligations to the Sponsor and Compliance Adviser as set out in Chapter 6A.
            2 In the event that the Exchange, for whatever reason, is unable to contact or liaise with the Sponsor concerning any particular matter relevant to the issuer, the authorised representatives will be expected to assume full responsibility for contacting or responding to the Exchange concerning that matter.
            (3) from such time as the issuer is no longer required to have (or does not otherwise retain) a Sponsor, acting as the principal channel of communication between the Exchange and the listed issuer (in particular, as regards any communication required prior to commencement of trading in the morning); and
            (4) ensuring that whenever he is away, a suitable alternate is appointed (and authorised to speak on behalf of the issuer), available and known to the Exchange and supplying the Exchange with details in writing of how such alternate may be contacted including home, office and mobile telephone numbers and, where available, facsimile numbers and electronic mail addresses.

            Note: If the authorised representatives and, or their alternates are based outside Hong Kong (or are otherwise expected to be frequently outside Hong Kong), they must ensure that they can be readily contactable by the Exchange on the contact details provided to the Exchange under this rule.

          • 5.26

            A person appointed as an authorised representative should only terminate his appointment after first notifying the Exchange of such proposed termination and the reasons therefor; and except in exceptional circumstances, the issuer should not terminate the appointment of the authorised representative until it has appointed a replacement. Where a person's appointment as an authorised representative is terminated, both the issuer and the individual concerned should immediately notify the Exchange of such termination in each case stating the reason why such appointment was terminated.

          • 5.27

            If the Exchange is not satisfied that any person appointed as an authorised representative is fulfilling his responsibilities adequately, it may require the issuer to terminate his appointment and appoint or designate a replacement.

        • Audit committee

          • 5.28

            Every issuer must establish an audit committee comprising non-executive directors only. The audit committee must comprise a minimum of 3 members, at least one of whom is an independent non-executive director with appropriate professional qualifications or accounting or related financial management expertise as required in rule 5.05(2). The majority of the audit committee members must be independent non-executive directors of the issuer. The audit committee must be chaired by an independent non-executive director.
             
            Notes:  
             
            1.    This rule and rules 5.29 to 5.33 do not apply to an issuer of debt securities, the equity securities of which are not listed on GEM.
             
              2. [Repealed 1 October 2020]
             
              3. For further guidance on establishing an audit committee, listed issuers may refer to "A Guide for Effective Audit Committees" published by the Hong Kong Institute of certified Public Accountants (formerly known as the Hong Kong Society of Accountants) in February 2002. Issuers may adopt the terms of reference set out in that guide, or they may adopt any other comparable terms of reference for the establishment of an audit committee.
             
              4. Please also see the note to rule 5.05(2).
             

          • 5.29

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

          • 5.30 [Repealed]

            [Repealed 1 January 2005]

          • 5.31 [Repealed]

            [Repealed 1 January 2005]

          • 5.32 [Repealed]

            [Repealed 1 January 2005]

          • 5.33

            An issuer shall, pursuant rule 17.51(2), immediately inform the Exchange and publish an announcement containing the relevant details and reasons if 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. Issuers 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).

        • Remuneration Committee

          • 5.34

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

          • 5.35

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

          • 5.36

            If the issuer fails to set up a remuneration committee or at any time has failed to meet any of the other requirements in rules 5.34 and 5.35, it must immediately publish an announcement containing the relevant details and reasons. Issuers must set up a remuneration committee with written terms of reference and/or appoint appropriate members to it to meet the requirement(s) within three months after failing to meet them.

        • Nomination Committee

          • 5.36A

            An issuer must establish a nomination committee chaired by the chairman of the board or an independent non-executive director and comprising a majority of independent non-executive directors.

          • 5.37 [Repealed]

            [Repealed 1 January 2005]

          • 5.38 [Repealed]

            [Repealed 1 January 2005]

          • 5.39 [Repealed]

            [Repealed 1 January 2005]

          • 5.40 [Repealed]

            [Repealed 1 January 2005]

          • 5.41 [Repealed]

            [Repealed 1 January 2005]

          • 5.42 [Repealed]

            [Repealed 1 January 2005]

          • 5.43 [Repealed]

            [Repealed 1 January 2005]

          • 5.44 [Repealed]

            [Repealed 1 January 2005]

          • 5.45 [Repealed]

            [Repealed 1 January 2005]

        • Securities transactions by directors

          • Basic principles (5.46-5.51)

            • 5.46

              Rules 5.48 to 5.67 set out the required standard against which issuers and their directors must measure their conduct regarding transactions in securities of their issuers (the "required standard of dealings"). Any breach of the required standard of dealings will be regarded as a breach of the GEM Listing Rules. A director must seek to secure that all dealings in which he is or is deemed to be interested are conducted in accordance with the required standard of dealings.

            • 5.47

              An issuer may adopt its own code on terms no less exacting than the required standard of dealings if it so wishes. Any breach of such code will not be a breach of the GEM Listing Rules unless it is also a breach of the required standard of dealings.

            • 5.48

              The Exchange regards it as desirable that directors of an issuer should hold securities in the issuer.

            • 5.49

              Directors wishing to deal in any securities in an issuer must first have regard to the provisions of Part XIII and Part XIV of the Securities and Futures Ordinance with respect to insider dealing and market misconduct. However, there are occasions where directors should not be free to deal in the issuer's securities even though the statutory requirements will not be contravened.

            • 5.50

              The single most important thrust of the required standard of dealings is that directors who are aware of or privy to any negotiations or agreements related to intended acquisitions or disposals which are notifiable transactions under Chapter 19 or connected transactions under Chapter 20 of the GEM Listing Rules or any inside information must refrain from dealing in the issuer's securities as soon as they become aware of them or privy to them until the information has been announced. Directors who are privy to relevant negotiations or agreements or any inside information should caution those directors who are not so privy that there may be inside information and that they must not deal in the issuer's securities for a similar period.

            • 5.51

              In addition, a director must not make any unauthorised disclosure of confidential information, whether to co-trustees or to any other person (even those to whom he owes a fiduciary duty) or make any use of such information for the advantage of himself or others.

          • Interpretation (5.52-5.53)

            • 5.52

              For the purpose of the required standard of dealings:

              (1) "dealing" includes, subject to rule 5.52(4), any acquisition, disposal or transfer of, or offer to acquire, dispose of or transfer, or creation of pledge, charge or any other security interest in, any securities of the issuer or any entity whose assets solely or substantially comprise securities of the issuer, and the grant, acceptance, acquisition, disposal, transfer, exercise or discharge of any option (whether call, put or both) or other right or obligation, present or future, conditional or unconditional, to acquire, dispose of or transfer securities, or any interest in securities, of the issuer or any such entity, in each case whether or not for consideration and any agreements to do any of the foregoing, and "deal" shall be construed accordingly;
              (2) "beneficiary" includes any discretionary object of a discretionary trust (where the director is aware of the arrangement) and any beneficiary of a non-discretionary trust;
              (3) "securities" means listed securities and any unlisted securities that are convertible or exchangeable into listed securities and structured products (including derivative warrants), such as those described in Chapter 15A of the Main Board Listing Rules, issued in respect of the listed securities of an issuer;
              (4) notwithstanding the definition of "dealing" under rule 5.52(1), the following dealings are not subject to the required standard of dealings:
              (a) taking up of entitlements under a rights issue, bonus issue, capitalisation issue or other offer made by the listed issuer to holders of its securities (including an offer of shares in lieu of a cash dividend) but, for the avoidance of doubt, applying for excess shares in a rights issue or applying for shares in excess of an assured allotment in an open offer is a "dealing";
              (b) allowing entitlements to lapse under a rights issue or other offer made by the issuer to holders of its securities (including an offer of shares in lieu of a cash dividend);
              (c) undertakings to accept, or the acceptance of, a general offer for shares in the issuer made to shareholders other than those that are concert parties (as defined under the Takeovers Code) of the offeror;
              (d) exercise of share options or warrants or acceptance of an offer for shares pursuant to an agreement entered into with an issuer before a period during which dealing is prohibited under the required standard of dealings at the pre-determined exercise price, being a fixed monetary amount determined at the time of grant of the share option or warrant or acceptance of an offer for shares;
              (e) an acquisition of qualification shares where, under the issuer's constitutional documents, the final date for acquiring such shares falls within a period when dealing is prohibited under the required standard of dealings and such shares cannot be acquired at another time;
              (f) dealing where the beneficial interest or interests in the relevant security of the listed issuer do not change;
              (g) dealing where a shareholder places out his existing shares in a "top-up" placing where the number of new shares subscribed by him pursuant to an irrevocable, binding obligation equals the number of existing shares placed out and the subscription price (after expenses) is the same as the price at which the existing shares were placed out; and
              (h) dealing where the beneficial ownership is transferred from another party by operation of law.

            • 5.53

              For the purpose of the required standard of dealings, the grant to a director of an option to subscribe or purchase his company's securities shall be regarded as a dealing by him, if the price at which such option may be exercised is fixed at the time of such grant. If, however, an option is granted to a director on terms whereby the price at which such option may be exercised is to be fixed at the time of exercise, the dealing is to be regarded as taking place at the time of exercise.

          • Absolute prohibitions (5.54-5.60)

            • 5.54

              A director must not deal in any of the securities of the issuer at any time when he possesses inside information in relation to those securities, or where clearance to deal is not otherwise conferred upon him under rule 5.61.

            • 5.55

              A director must not deal in the securities of an issuer listed on GEM or the Main Board when by virtue of his position as a director of another issuer, he possesses inside information in relation to those securities.

            • 5.56

              (a) A director must not deal in any securities of the listed issuer on any day on which its financial results are published and:
              (i) during the period of 60 days immediately preceding the publication date of the annual results or, if shorter, the period from the end of the relevant financial year up to the publication date of the results; and
              (ii) during the period of 30 days immediately preceding the publication date of the quarterly results and half-year results or, if shorter, the period from the end of the relevant quarterly or half-year period up to the publication date of the results,
              unless the circumstances are exceptional, for example, where a pressing financial commitment has to be met as described in rule 5.67. In any event, the director must comply with the procedure in rules 5.61 and 5.62.
              (b) The listed issuer must notify the Exchange in advance of the commencement of each period during which directors are not allowed to deal under rule 5.56(a).

              Note: Directors should note that the period during which they are not allowed to deal under rule 5.56 will cover any period of delay in the publication of a results announcement.

            • 5.57

              Where a director is a sole trustee, the required standard of dealings will apply to all dealings of the trust as if he were dealing on his own account (unless the director is a bare trustee and neither he nor any of his close associates is a beneficiary of the trust, in which case the required standard of dealings will not apply).

            • 5.58

              When a director deals in the securities of an issuer in his capacity as a co-trustee and he has not participated in or influenced the decision to deal in the securities and is not, and none of his close associates is, a beneficiary of the trust, dealings by the trust will not be regarded as his dealings.

            • 5.59

              The required standard of dealings will be regarded as equally applicable to any dealings by the director's spouse or by or on behalf of any minor child (natural or adopted) and any other dealings in which for the purposes of Part XV of the Securities and Futures Ordinance he is or is to be treated as interested. It is the duty of the director, therefore, to seek to avoid any such dealing at a time when he himself is not free to deal.

            • 5.60

              When a director places investment funds comprising securities of the issuer under professional management, discretionary or otherwise, the managers must nonetheless be made subject to the same restrictions and procedures as the director himself in respect of any proposed dealings in the issuer's securities.

          • Notification (5.61-5.66)

            • 5.61

              A director must not deal in any securities of the issuer without first notifying in writing the chairman or a director (other than himself) designated by the board for the specific purpose and receiving a dated written acknowledgement. In his own case, the chairman must first notify the board at a board meeting, or alternatively notify a director (other than himself) designated by the board for the purpose and receive a dated written acknowledgement before any such dealing. The designated director must not deal in any securities of the issuer without first notifying the chairman and receiving a dated written acknowledgement. In each case,

              (1) a response to a request for clearance to deal must be given to the relevant director within five business days of the request being made; and
              (2) the clearance to deal in accordance with (1) above must be valid for no longer than five business days of clearance being received.

              Note: For the avoidance of doubt, the restriction under rule 5.54 applies if inside information develops following the grant of clearance.

            • 5.62

              The procedure established within the issuer must, as a minimum, provide for there to be a written record maintained by the issuer that the appropriate notification was given and acknowledged pursuant to rule 5.61, and for the director concerned to have received written confirmation to that effect.

            • 5.63

              Any director of the issuer who acts as trustee of a trust must ensure that his co-trustees are aware of the identity of any company of which he is a director so as to enable them to anticipate possible difficulties. A director having funds under management must likewise advise the investment manager.

            • 5.64

              Any director who is a beneficiary, but not a trustee, of a trust which deals in securities of the issuer must endeavour to ensure that the trustees notify him after they have dealt in such securities on behalf of the trust, in order that he in turn may notify the issuer. For this purpose, he must ensure that the trustees are aware of the issuers of which he is a director.

            • 5.65

              The register maintained in accordance with section 352 of the Securities and Futures Ordinance should be made available for inspection at every meeting of the board.

            • 5.66

              The directors of the issuer must as a board and individually endeavour to ensure that any employee of the issuer or director or employee of a subsidiary company who, because of his office or employment in the company or a subsidiary, is likely to possess inside information in relation to the securities of any issuer on GEM or the Main Board does not deal in those securities when he would be prohibited from dealing by the required standard of dealings if he were a director.

          • Exceptional circumstances (5.67)

            • 5.67

              If a director proposes to sell or otherwise dispose of securities of the issuer under exceptional circumstances where the sale or disposal is otherwise prohibited under the required standard of dealings, the director must, in addition to complying with the other provisions of the required standard of dealings, comply with rule 5.61 regarding prior written notice and acknowledgement. The director must satisfy the chairman or the designated director that the circumstances are exceptional and the proposed sale or disposal is the only reasonable course of action available to the director before the director can sell or dispose of the securities. The issuer shall give written notice of such sale or disposal to the Exchange as soon as practicable stating why it considered the circumstances to be exceptional. The issuer shall publish an announcement immediately after any such sale or disposal and state that the chairman or the designated director is satisfied that there were exceptional circumstances for such sale or disposal of securities by the director. An example of the type of circumstances which may be considered exceptional for such purposes would be a pressing financial commitment on the part of the director that cannot otherwise be satisfied.

          • Disclosure (5.68)

            • 5.68

              In relation to securities transactions by directors, an issuer shall disclose in its half-year reports (and summary half-year reports, if any) and the Corporate Governance report contained in its annual reports (and summary financial reports, if any):

              (1) whether the issuer has adopted a code of conduct regarding securities transactions by directors on terms no less exacting than the required standard of dealings;
              (2) 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 securities transactions by directors; and
              (3) 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 issuer to address such non-compliance.

      • Chapter 6 [Repealed]

        [Repealed 1 January 2007]

      • Chapter 6A Sponsors, Compliance Advisers, Overall Coordinators and other Capital Market Intermediaries

        • Definitions and Interpretation

          • 6A.01

            In this Chapter:

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

            Note: Retaining an expert to advise or assist a new applicant or Sponsor on any non-expert section of the listing document does of itself not make such section an expert section.
            (4) "Fixed Period" means the period for which a listed issuer must retain a Compliance Adviser under rule 6A.19;
            (5) "initial application for listing", "initial listing" and "initial public offering" include deemed new listings of equity securities under rule 19.54;
            (6) "listed issuer" for the purposes of this Chapter, has the same meaning as in rule 1.01 but excludes an issuer of debt securities only;
            (7) "new applicant" for the purposes of this Chapter, has the same meaning as in rule 1.01, modified for the purpose of this Chapter 6A to:
            (a) include issuers who undergo a deemed listing of equity securities under rule 19.54; and
            (b) exclude applicants seeking listing of debt securities only;
            (8) "non-expert sections" means, in relation to the listing document, any part of the listing document that is not part of any expert section;
            (9) "Sponsor group" means:
            (a) a Sponsor;
            (b) its holding company;
            (c) any subsidiary of its holding company;
            (d) any controlling shareholder of:
            (i) the Sponsor; or
            (ii) its holding company; and
            (e) any close associate of any controlling shareholder referred to in paragraph (d) above; and
            (10) "ultimate holding company" means a holding company that itself does not have a holding company.

        • Appointment of a Sponsor

          • 6A.02

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

          • 6A.02A

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

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

          • 6A.02B

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

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

          • 6A.03

            Each Sponsor must give an undertaking and statement of independence to the Exchange as set out in Appendix 7K at the same time when an application on behalf of a new applicant is submitted to the Exchange.

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

          • 6A.04 [Repealed]

            [Repealed 1 October 2013]

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

          • 6A.05

            A new applicant and its directors must assist the Sponsor to perform its role and must ensure that its substantial shareholders and associates also assist the Sponsor. To facilitate the Sponsor to meet its obligations and responsibilities under the GEM Listing Rules and the Code of Conduct, the written engagement agreement referred to in rule 6A.02 must contain at least the following obligations for the applicant and its directors:

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

        • Impartiality and independence of Sponsors

          • 6A.06

            A Sponsor must perform its duties with impartiality.

          • 6A.07

            At least one Sponsor of a new applicant must be independent of it. The Sponsor is required to demonstrate to the Exchange its independence or lack of independence and declare in accordance with the terms set out in Appendix 7K.

            A Sponsor is not independent if any of the following circumstances exist at any time from the date of submission of an application for listing on Form 5A up to the date of listing:-

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

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

          • 6A.08 [Repealed]

            [Repealed 1 October 2013]

          • 6A.09

            Where a Sponsor or the new applicant becomes aware of a change in the circumstances set out in the Sponsor's undertaking and statement of independence in Appendix 7K during the period the Sponsor is engaged by the new applicant, the Sponsor and the new applicant must notify the Exchange as soon as possible upon that change occurring.

        • Additional Sponsors

          • 6A.10

            Where a new applicant has more than one Sponsor:

            (1) the Exchange must be advised as to which of the Sponsors is designated as the Sponsor who would be the primary channel of communication with the Exchange concerning matters involving the listing application;
            (2) the listing document must disclose whether each Sponsor satisfies the independence test at rule 6A.07 and, if not, how the lack of independence arises; and
            (3) each of the Sponsors has responsibility for ensuring that the obligations and responsibilities in this Chapter are fully discharged.

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

        • Sponsor's role

          • 6A.11

            A Sponsor must:

            (1) be closely involved in the preparation of the new applicant's listing documents;
            (2) conduct reasonable due diligence inquiries to put itself in a position to be able to make the declaration in rule 6A.13 and Appendix 7G;
            (3) ensure the requirements in rules 12.07, 12.09, 12.10 and 12.12 to 12.15 are complied with;
            (4) use reasonable endeavours to address all matters raised by the Exchange in connection with the listing application including providing to the Exchange, in a timely manner, such information as the Exchange may reasonably require for the purpose of verifying whether the GEM Listing Rules are being or have been complied with by the Sponsor, the new applicant and the new applicant's directors;
            (5) accompany the new applicant to any meetings with the Exchange unless otherwise requested by the Exchange, and attend any other meetings and participate in any other discussions with the Exchange as requested by the Exchange; and
            (6) comply with the terms of the undertaking and statement of independence given to the Exchange by the Sponsor under rule 6A.03 and Appendix 7K.

          • 6A.12

            In determining the reasonable due diligence inquiries a Sponsor must make for the purposes of rule 6A.11(2), a Sponsor must have regard to the due diligence practice note at Practice Note 2 and the SFC Sponsor Provisions.

        • Sponsor's declaration

          • 6A.13

            As soon as practicable after the GEM Listing Committee’s hearing of the new applicant's listing application but on or before the date of issue of the listing document, each Sponsor must submit to the Exchange the declaration set out in Appendix 7G.

          • 6A.14 [Repealed]

            [Repealed 1 October 2013]

          • 6A.15 [Repealed]

            [Repealed 1 October 2013]

          • 6A.16 [Repealed]

            [Repealed 1 October 2013]

        • Termination of a Sponsor's role

          • 6A.17

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

            (1) the new applicant must immediately notify the Exchange of the resignation or termination and the Sponsor must notify the Exchange of its resignation or termination together with reasons in accordance with rule 6A.02A(2); and
            (2) if the departing Sponsor was the sole independent Sponsor, the replacement Sponsor must notify the Exchange of its appointment in accordance with rule 6A.02A(1) and re-submit, on behalf of the new applicant, a listing application not less than 2 months from the date of its formal appointment detailing a revised timetable together with a further initial listing fee in accordance with Chapter 12 and the declaration and undertaking required by this Chapter.

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

          • 6A.18

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

        • Appointment of a Compliance Adviser

          • 6A.19

            A listed issuer must appoint a Compliance Adviser for the period commencing on the date of initial listing of the listed issuer's equity securities and ending on the date on which the listed issuer complies with rule 18.03 in respect of its financial results for the second full financial year commencing after the date of its initial listing.

          • 6A.20

            At any time after the Fixed Period, the Exchange may direct a listed issuer to appoint a Compliance Adviser for such period and to undertake such role as may be specified by the Exchange. In the event of such an appointment the Exchange will specify the circumstances in which the listed issuer must consult the Compliance Adviser and the responsibilities the Compliance Adviser must discharge. The Compliance Adviser must discharge those responsibilities with due care and skill. For the purpose of this rule, a listed issuer may appoint a different Compliance Adviser to that it appointed under rule 6A.19.

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

        • Compliance Adviser's undertaking to the Exchange

          • 6A.21

            Each Compliance Adviser must give an undertaking to the Exchange in the terms set out in rule 6A.22 below and in the form in Form M of Appendix 7. Compliance Advisers must give the undertaking no later than the earlier of:

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

          • 6A.22

            Each Compliance Adviser must undertake to:

            (1) comply with the GEM Listing Rules applicable to Compliance Advisers; and
            (2) cooperate 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 Compliance Adviser, promptly producing the originals or copies of any relevant documents and attending before any meeting or hearing at which the Compliance Adviser is requested to appear.

          • 6A.23

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

            (1) before the publication of any regulatory announcement, circular or financial report;
            (2) where a transaction, which might be a notifiable or connected transaction, is contemplated including share issues and share repurchases;
            (3) where the listed issuer proposes to use the proceeds of the initial public offering in a manner different from that detailed in the listing document or where the business activities, developments or results of the listed issuer deviate from any forecast, estimate, or other information in the listing document; and
            (4) where the Exchange makes an inquiry of the listed issuer under rule 17.11.

          • 6A.24

            When a Compliance Adviser is consulted by a listed issuer in the circumstances set out in rule 6A.23 above it must discharge the following responsibilities with due care and skill:

            (1) ensure the listed issuer is properly guided and advised as to compliance with the GEM Listing Rules and all other applicable laws, rules, codes and guidelines;
            (2) accompany the listed issuer to any meetings with the Exchange, unless otherwise requested by the Exchange;
            (3) no less frequently than at the time of reviewing the financial reporting of the listed issuer under rule 6A.23(1) above and upon the listed issuer notifying the Compliance Adviser of a proposed change in the use of proceeds of the initial public offering under rule 6A.23(3) above, discuss with the listed issuer:
            (a) the listed issuer's operating performance and financial condition by reference to the listed issuer's business objectives and use of issue proceeds as stated in its listing document;
            (b) compliance with the terms and conditions of any waivers granted from the GEM Listing Rules;
            (c) whether any profit forecast or estimate in the listing document will be or has been met by the listed issuer and advise the listed issuer to notify the Exchange and inform the public in a timely and appropriate manner; and
            (d) compliance with any undertakings provided by the listed issuer and its directors at the time of listing, and, in the event of non-compliance, discuss the issue with the listed issuer's board of directors and make recommendations to the board regarding appropriate remedial steps;
            (4) if required by the Exchange, deal with the Exchange in respect of any or all matters listed in rule 6A.23;
            (5) in relation to an application by the listed issuer for a waiver from any of the requirements in Chapter 20, advise the listed issuer on its obligations and in particular the requirement to appoint an independent financial adviser; and
            (6) assess the understanding of all new appointees to the board of the listed issuer regarding the nature of their responsibilities and fiduciary duties as a director of a listed issuer, and, to the extent the Compliance Adviser forms an opinion that the new appointees' understanding is inadequate, discuss the inadequacies with the board and make recommendations to the board regarding appropriate remedial steps such as training.

        • Impartiality of Compliance Advisers

          • 6A.25

            A Compliance Adviser must perform its duties with impartiality.

        • Termination of a Compliance Adviser's role

          • 6A.26

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

          • 6A.27

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

        • Application of other rules and regulations

          • 6A.28

            To the extent that any matters under the GEM Listing Rules, 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 overlap, in respect of Sponsors, Compliance Advisers, overall coordinators or other capital market intermediaries (as the case may be), the more onerous standard of conduct shall prevail.

            Notes:

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

        • Miscellaneous

          • 6A.29

            If a Compliance Adviser resigns or its engagement is terminated, a listed issuer must, as soon as practicable, publish an announcement, in accordance with Chapter 16, and make arrangements to replace the Compliance Adviser under rule 6A.27. Immediately after a replacement Compliance Adviser has been appointed, the listed issuer must inform the Exchange and publish a further announcement.

            Note: Refer to rules 6A.26 and 6A.27 regarding circumstances in which the termination or resignation of a Compliance Adviser is permitted.

          • 6A.30

            If the licence or registration of a Sponsor, a Compliance Adviser or an overall coordinator is revoked, suspended, varied or restricted such that it is no longer permitted to undertake its respective regulated work, it must immediately inform each of the issuers which it acts for.

          • 6A.31

            In relation to any application for listing by a listed issuer involving the proposed issue of 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 Compliance Adviser (or any Sponsor that is appointed under rule 6A.37 to advise the issuer) must complete and submit to the Exchange, at the time of submitting the application for listing (passing a copy to the new applicant or listed issuer) a declaration in the prescribed form set out in Appendix 7H, giving details of all interests it, its directors and employees and its close associates have in relation to the issuer and that listing or transaction.

            Notes:

            1 For these purposes, the Compliance Adviser (or other adviser appointed under rule 6A.37) must provide details of all information which ought reasonably to be disclosed concerning the interests which it, its directors and employees and its close associates have in relation to the new applicant or listed issuer and the successful outcome of the listing or transaction in question, having taken all reasonable steps to ascertain such interests of its directors and employees and its close associates.
            2 Without limiting the general nature of Note 1, the Compliance Adviser (or other adviser appointed under rule 6A.37) would be expected to disclose full and accurate details of:—
            (a) the interests which it or its close associates have or may, as a result of the listing or transaction, have in the securities of the issuer or any other company in the issuer's group (including options or rights to subscribe for such securities);
            (b) the interests which any director or employee involved in providing advice to the issuer has or may, as a result of the listing or transaction, have in the securities of the issuer or any company in the issuer's group (including options or rights to subscribe such securities but, for the avoidance of doubt, excluding interests in securities that may be subscribed by any such director or employee under an offer by way of public subscription made by the issuer); and
            (c) any material benefit expected to accrue to the Compliance Adviser (or other adviser appointed under rule 6A.37) or its close associates as a result of the successful outcome of the listing or transaction, including, by way of example, the repayment of material outstanding indebtedness and payment of any underwriting commissions or success fees.

          • 6A.32

            The listing document in respect of any new applicant must comply with rule 6A.10(2), as applicable. All other listing documents and circulars relating to transactions on which the Compliance Adviser (or another adviser appointed under 6A.37) subsequently provides advice to the issuer (excluding any Explanatory Statement issued under rule 13.08) must disclose full and accurate details of the interests as advised by the Compliance Adviser and, if applicable, the interests as advised under rule 6A.31 by the Compliance Adviser appointed under rule 6A.37. In addition, each listed issuer's annual report and accounts, half-year report and quarterly reports must include full and accurate details of such interests, as updated and notified by the Compliance Adviser to the issuer at the time of preparing such reports.

            Notes:

            1 Each of the documents referred to in this rule is required to set out the interests of the Compliance Adviser (and its directors, employees and close associates) under a specific heading and both the heading and information must be given suitable prominence within the document.
            2 The Compliance Adviser must take responsibility for the accuracy of the information relating to the interests of the Compliance Adviser (and its directors, employees and close associates), as set out in each of the documents referred to in this rule.

          • 6A.33

            In circumstances of any doubt as to the prospective impact of an actual or potential conflict of interest or as to the interests that are required to be disclosed, the Compliance Adviser or other adviser must consult with the Exchange at the earliest practicable opportunity.

          • 6A.34

            In relation to an application for listing by a listed issuer involving the proposed issue of 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 Compliance Adviser:—

            (1) shall be responsible for dealing with the Exchange on all matters raised by the Exchange;
            (2) must be closely involved in the preparation of the listing document and must ensure that it has been verified to a standard that enables the Compliance Adviser to submit to the Exchange the declaration referred to in rule 6A.35;
            (3) must assist the issuer in preparing and submitting the application form for listing, together with such other completed forms or documents as are required under the GEM Listing Rules to be submitted in connection therewith; and
            (4) must ensure that at least one Principal is actively involved in the work undertaken by the Compliance Adviser in connection with the application.

          • 6A.35

            The Compliance Adviser must, prior to the issue of 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, submit to the Exchange a declaration in the form set out in Appendix 7J confirming that:—

            (1) all the documents required by the GEM Listing Rules to be submitted to the Exchange prior to issue of the listing document have been so submitted; and
            (2) the Compliance Adviser has satisfied itself, to the best of its knowledge and belief, having made due and careful enquiries that the listing document is in compliance with the GEM Listing Rules and that:—
            (a) the information contained in the listing document is accurate and complete in all material respects and not misleading;
            (b) there are no other matters the omission of which would make any statement in the listing document misleading;
            (c) all opinions of the directors of the issuer expressed in the listing document have been arrived at after due and careful consideration on their part and are founded on bases and assumptions that are fair and reasonable; and
            (d) the directors of the issuer have made sufficient enquiries so as to enable them to give the confirmations set out in the "responsibility statement" contained in the listing document.

            Note: Such declaration must, save in exceptional circumstances, be signed on behalf of the Compliance Adviser by the Principal/s who has/have been most actively involved in the work undertaken by the Compliance Adviser and will be treated by the Exchange as an acknowledgement of his/their personal active involvement in the matter.

          • 6A.36

            The following listing documents are relevant for the purposes of rules 6A.34 and 6A.35:—

            (1) any listing document which constitutes a prospectus for the purposes of the Companies Ordinance;
            (2) any listing document issued in relation to a rights issue or open offer (whether or not it constitutes a prospectus); or
            (3) any listing document issued in relation to a transaction or connected transaction (under Chapters 19 and 20 respectively).

            Note: In respect of any listing document in relation to a connected transaction, the declaration by the Compliance Adviser required under rule 6A.35 will not be expected to give any form of confirmation on the opinions of the independent non-executive director(s) or the letter from the independent financial adviser.

          • 6A.37

            Where a 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, it is permissible for any Sponsor, other than the Compliance Adviser appointed by the issuer for the purposes of rule 6A.19 or 6A.20, to act as the adviser to the issuer in relation to the transaction in question. In these circumstances, the newly appointed adviser must assume responsibility for the particular matters referred to in rules 6A.34 and 6A.35.

            Note: The term of appointment of any party engaged for these purposes as adviser to the listed issuer may not expire until the relevant securities of the listed issuer have been admitted to listing on GEM (or, if applicable, until the application for listing has been rejected by the Exchange).

          • 6A.38 [Repealed]

            [Repealed 1 October 2013]

        • Capital Market Intermediaries

          • 6A.39

            (1) Rules 6A.40 to 6A.43 and rules 6A.46(1) and 6A.47 are applicable to the following types of offering involving bookbuilding activities (as defined under the Code of Conduct):
             
            (a) a placing of equity securities to be listed on GEM, including:
             
            (i) a placing in connection with a New Listing (whether by way of a primary listing or secondary listing); and
             
            (ii) a placing of equity securities of a class new to listing or new equity securities of a class al listed under a general or specific mandate in accordance with rule 10.13 or other relevant codes and guidelines; and
             
            (b) a placing of listed equity securities by an existing holder of equity securities if it is accompanied by a top-up subscription by the existing holder of equity securities for new equity securities in the issuer.
             
            (2) Rules 6A.44, 6A.45, 6A.46(2) and 6A.48 are additional requirements applicable only to placings of equity securities that fall under rule 6A.39(1)(a)(i) above.
             
            Note: For the avoidance of doubt, requirements under rule 6A.39 are not applicable to:
             
            (a) bilateral agreements or arrangements between the issuer and the investors (also referred to as “club deals”);
             
            (b) transactions where only one or several investors are involved and the terms of the offering are negotiated and agreed directly between the issuer and the investors (also referred to as “private placements”); and
             
            (c) transactions where equity securities are allocated to investors on a pre-determined basis at a pre-determined price.
             

        • Appointment of a capital market intermediary

          • 6A.40

            The appointment by an issuer of a capital market intermediary must be made under a written engagement agreement before the capital market intermediary conducts any specified activities under paragraph 21.1.1 of the Code of Conduct.

          • 6A.41

            The written engagement agreement of a capital market intermediary pursuant to rule 6A.40 must at least specify the following:
             
            (1) the roles and responsibilities of the capital market intermediary;
             
            (2) the fee arrangement (including the fixed fees to be paid to the capital market intermediary as a percentage of the total fees to be paid to all syndicate CMIs);
             
            (3) the time schedule for payment of the fees to the capital market intermediary; and
             
            (4) (for placing in connection with a New Listing) the obligations of the new applicant and its directors to provide the assistance specified in rule 6A.48.
             
            Note: The total fees in this rule, also commonly referred to as “underwriting fees”, include fixed and discretionary fees for providing one or more of the following services to the issuer: providing advice, marketing, bookbuilding, making pricing and allocation recommendations and placing the equity securities with investors.
             

        • Appointment of an overall coordinator

          • 6A.42

            The appointment by an issuer of an overall coordinator must be made under a written engagement agreement before the overall coordinator conducts any specified activities under paragraph 21.2.3 of the Code of Conduct.
             
            Note: Where a new applicant has appointed more than one overall coordinator, arrangements should be made for one designated overall coordinator to provide the required information (for example, information under rule 12.23AA) to the Exchange (except the documents required to be submitted to the Exchange under rules 12.26(6) and 12.27(6), which shall be submitted by each of the overall coordinators and other relevant parties mentioned in rules 12.26(6)(a) and 12.27(6)(a), respectively). Notwithstanding this, each overall coordinator is jointly and severally liable for ensuring that the information provided to the Exchange is accurate and complete and will be provided to the Exchange within the required timeframe.
             

          • 6A.43

            The written engagement agreement of an overall coordinator pursuant to rule 6A.42 must at least specify the following:
             
            (1) the roles and responsibilities of the overall coordinator;
             
            (2) the fee arrangement (including the fixed fees to be paid to the overall coordinator as a percentage of the total fees to be paid to all syndicate CMIs);
             
            (3) the time schedule for payment of the fees to the overall coordinator;
             
            (4) the obligation of the new applicant and its directors to provide the information in rule 12.23AA to the designated overall coordinator for its submission to the Exchange within the required timeframe; and
             
            (5) (for placing in connection with a New Listing) the obligations of the new applicant and its directors to provide the assistance specified in rule 6A.48.
             
            Note: The total fees in this rule, also commonly referred to as “underwriting fees”, include fixed and discretionary fees for providing one or more of the following services to the issuer: providing advice, marketing, bookbuilding, making pricing and allocation recommendations and placing the equity securities with investors.
             

          • 6A.44

            In the case of a new applicant effecting a placing involving bookbuilding activities (as defined under the Code of Conduct) in connection with a New Listing, all overall coordinator(s) must be appointed in accordance with rule 6A.42 no later than 2 weeks following the date of the submission (or re-filing, as the case may be) of the listing application, and an OC Announcement on the appointment (which shall also disclose the name(s) of all overall coordinator(s) appointed as at the date of the announcement) must be published in accordance with rules 16.17 to 16.19 and Practice Note 5.

        • Overall coordinator’s declaration

          • 6A.45

            As soon as practicable after the issue of the listing document but before dealings commence, each overall coordinator must submit to the Exchange the declaration substantially as in Form I in Appendix 7.

        • Termination of the overall coordinator’s role

          • 6A.46

            (1) In the case of termination of the engagement of an overall coordinator, the issuer and the overall coordinator must notify the Exchange in writing, as soon as practicable, of the termination together with (i) the reasons therefor and (ii) a confirmation on whether it had any disagreement with the issuer.
             
            (2) In the case of a placing involving bookbuilding activities (as defined under the Code of Conduct) in connection with a New Listing, where the appointment of the outgoing overall coordinator was previously disclosed in an OC Announcement, an OC Announcement on the termination of its engagement as an overall coordinator must be published in accordance with rules 16.17 to 16.19 and Practice Note 5.
             

          • 6A.47

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

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

          • 6A.48

            To facilitate each syndicate member in a placing involving bookbuilding activities (as defined under the Code of Conduct) in connection with a New Listing to identify investors to whom the allocation of equity securities would be subject to restrictions or require prior consent from the Exchange under the GEM Listing Rules, and for each syndicate CMI to meet its obligations and responsibilities under the Code of Conduct, the written engagement agreement with each syndicate member must contain at least the following obligations of the new applicant and its directors:
             
            (1) to provide the syndicate member with a list of the directors and existing shareholders of the new applicant, their respective close associates and any persons who is engaged by or will act as a nominee for any of the foregoing persons to subscribe for, or purchase, equity securities in connection with the New Listing; and such information should be provided to the syndicate member as soon as practicable and in any event at least 4 clear business days before the date of the Listing Committee’s hearing on the listing application;
             
            (2) to keep the syndicate member informed of any material changes to information provided under sub-paragraph (1) above as soon as it becomes known to the new applicant and its directors; and
             
            (3) to provide to, or procure for, the syndicate member all necessary consents for its provision of the information referred to in sub-paragraphs (1) to (2) above to any distributor other than a syndicate member for the same purpose as set out in this rule above.
             

      • Chapter 7 Accountants' Reports and Pro Forma Financial Information

        • When required

          • 7.01

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

            (1) a listing document issued by a new applicant, but subject to rule 14.11(6) relating to a listing document supporting an introduction;
            (2) a listing document issued by a listed issuer in connection with an offer of securities to the public for subscription or purchase which is required by either section 38(1) or section 342(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance to set out the reports specified in Part II of the Third Schedule to that Ordinance; and
            (3) a circular issued in connection with a major transaction, a very substantial acquisition, an extreme transaction or a reverse takeover (see rules 19.67 and 19.69) unless the company being acquired is itself a company listed on GEM or the Main Board.

            Note: By virtue of rules 11.11 and 27.07, the accountants' report required to be included in the listing document of a new applicant must cover the requisite financial period ending not more than 6 months before the date of the listing document.

        • Scope

          • 7.01A

            For the purpose of rules 7.03(2), 7.03(4) ,7.04A and 7.30: —
             
            (1)    "acquisitions of business" include acquisitions of associates and any equity interest in another company. The rules generally do not apply to acquisitions of assets, but the Exchange may consider such transactions to be acquisitions of business based on specific facts and circumstances. For example, the Exchange may consider the substance of the transaction and guidance under relevant accounting standards;
             
            (2)    "trading record period" refers to the two financial years immediately preceding the issue of the listing document and any stub period reported on by the reporting accountants in conformity with rule 11.11; and
             
            (3)    "proposed to be acquired" refers to a proposal to acquire a specific subsidiary or business, even if there are no legally binding agreements. Examples include a memorandum of understanding entered into by a new applicant, and a tender that a new applicant has submitted, or will submit, for the acquisition of any business or subsidiary in the case of an open bid/ tender invitation.
             

        • Reporting accountants

          • 7.02

            Reporting accountants must be independent both of the issuer and of any other company concerned to the same extent as that required of an auditor under the Companies Ordinance and in accordance with the requirements on independence issued by the Hong Kong Institute of Certified Public Accountants or the International Federation of Accountants. Subject to rules 7.02(1) and 7.02(2), accountants’ reports must normally be prepared by certified public accountants who are qualified under the PAO for appointment as auditors of a company.
             
            (1)    Where the preparation of an accountants’ report constitutes a PIE Engagement under the FRCO, the issuer must normally appoint a firm of practising accountants that is qualified under the PAO and is a Registered PIE Auditor under the FRCO. In the case of such a PIE Engagement that is a reverse takeover or a very substantial acquisition circular issued by a listed issuer incorporated outside Hong Kong relating to the acquisition of an overseas company, the Exchange may be prepared to accept the appointment of an overseas firm of practising accountants that is not qualified under the PAO but is a Recognised PIE Auditor of that issuer under the FRCO.
             
              Notes:
             
              1.    The preparation of an accountants’ report included in (a) a listing document for the listing of the shares or stocks of a corporation seeking to be listed or a listed corporation; or (b) a circular issued by a PIE for a reverse takeover or a very substantial acquisition is a PIE Engagement under the FRCO.
             
              2.    In relation to an application for the recognition of an overseas firm of practising accountants under the FRCO, on a request made by an issuer incorporated outside Hong Kong, the Exchange may provide a statement of no objection to that issuer appointing an overseas firm of practising accountants to carry out a PIE Engagement for that issuer under section 20ZF(2)(a) of the FRCO. Such firm must normally:
             
            (a)    have an international name and reputation;
             
            (b)    be a member of a recognised body of accountants; and
             
            (c)    be subject to independent oversight by a regulatory body of a jurisdiction that is a full signatory to the IOSCO MMOU. It would be acceptable if the relevant audit oversight body is not a signatory to the IOSCO MMOU but the securities regulator in the same jurisdiction is a full signatory to the IOSCO MMOU.
             
            That issuer must provide the specific reasons supporting its request for a statement of no objection, for example:
             
            —    such firm has a geographical proximity and familiarity with the businesses of that issuer or the target;
             
            —    that issuer or the target is listed on a Recognised Stock Exchange, and such firm is the auditor of that issuer or the target; and
             
            —    such firm is the statutory auditor of that issuer or the target.
             
            If applicable, this statement of no objection is also subject to the Commission granting a certificate of exemption from strict compliance with the relevant requirement concerning the qualification of the reporting accountants under the Companies (Winding Up and Miscellaneous Provisions) Ordinance.
             
            The Exchange retains a discretion to accept or reject an application for a statement of no objection, and reserves the right to withdraw the statement of no objection pursuant to section 20ZF(2)(a) of the FRCO.
             
            (2)    In the case of an extreme transaction or a major transaction circular issued by a listed issuer in connection with the acquisition of an overseas company, the Exchange may be prepared to permit the accountants' report to be prepared by a firm of practising accountants that is not qualified under the PAO but which is acceptable to the Exchange. Such a firm must normally:
             
              (a)    have an international name and reputation;
             
              (b)    be a member of a recognised body of accountants; and
             
              (c)    be subject to independent oversight by a regulatory body of a jurisdiction that is a full signatory to the IOSCO MMOU. It would be acceptable if the relevant audit oversight body is not a signatory to the IOSCO MMOU but the securities regulator in the same jurisdiction is a full signatory to the IOSCO MMOU.
             

        • Basic contents of accountants' report for a listing document

          • 7.03

            In the case of a new applicant (rule 7.01(1)) and an offer of securities to the public for subscription or purchase falling within rule 7.01(2), the accountants' report must include:—
             
            History of results
             
            (1)    the results of the issuer or, if the issuer is a holding company, the consolidated results of the issuer and its subsidiaries covering:
             
              (a)    at least the 2 financial years immediately preceding the issue of the listing document;
             
              Note: 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.
             
              (b)    [Repealed 1 July 2008]; or
             
              (c)    such shorter period as may be acceptable to the Exchange (see rule 11.14);
             
            (2)    the results of any business or subsidiary acquired, agreed to be acquired or proposed to be acquired since the date to which the latest audited financial statements of the issuer have been made up (on the same basis, where the subsidiary is itself a holding company, as in (1) above) in respect of each of the 2 financial years referred to in (1) above (or in respect of the period since commencement of such business or the incorporation or establishment of such subsidiary, as the case may be, if this occurred within such 2 year period).
             
            Statement of financial position
             
            (3)    (a)    the statement of financial position of the issuer and, if the issuer is itself a holding company, the consolidated statement of financial position of the issuer and its subsidiaries in each case as at the end of each of the two financial years to which the latest audited financial statements of the issuer have been made up except that if the listing document is not required by either section 38(1) or section 342(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance to set out the reports specified in Part II of the Third Schedule of that Ordinance and the issuer is itself a holding company then the accountants' report need only include the consolidated statement of financial position of the issuer and its subsidiaries;
             
              (b)    in the case of banking companies, the statement of financial position as at the end of each of the two financial years prepared in accordance with rule 7.03(3)(a) must include information on the assets and liabilities set out in the Guideline on the Application of the Banking (Disclosure) Rules issued by the Hong Kong Monetary Authority;
             
            (4)    (a)    the statement of financial position of any business or subsidiary acquired, agreed to be acquired or proposed to be acquired since the date to which the latest audited financial statements of the issuer have been made up (on the same basis, where the subsidiary is itself a holding company, as in (3) above) in each case as at the end of each of the two financial years to which the latest audited financial statements of such business or subsidiary (as the case may be) have been made up;
             
              (b)    in the case of banking companies, the statement of financial position as at the end of each of the two financial years prepared in accordance with rule 7.03(4)(a) must include information on the assets and liabilities set out in the Guideline on the Application of the Banking (Disclosure) Rules issued by the Hong Kong Monetary Authority;
             
              Notes:  For the purpose of rules 7.03(2) and 7.03(4):—
             
                (1)    if a new applicant has entered into a legally binding acquisition agreement after the trading record period but the acquisition will not be completed upon listing, the completion of the acquisition after the new applicant’s listing will not be subject to the notification, disclosure and shareholders’ approval requirements under Chapters 19 and 20 (where applicable), only if the new applicant has disclosed all information as required under rules 7.03(2) and 7.03(4) in its listing document and there have been no material changes to the acquisition and information disclosed;
             
                (2)    the financial information on the business or subsidiary acquired, agreed to be acquired or proposed to be acquired must normally be drawn up in conformity with accounting policies adopted by the new applicant and be disclosed in the form of a note to the accountants’ report or in a separate accountants’ report;
             
                (3)    where an acquisition of a business or subsidiary is subject to the relevant requirements under the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance because the listing proceeds, or any part thereof, are or is to be applied directly or indirectly for the acquisition, the financial information of the acquisition target has to be disclosed in a separate accountants’ report; and
             
                (4)    the Exchange may consider an application for a waiver from strict compliance with rules 7.03(2) and 7.03(4) taking into account the following:—
             
                  (a)    that all the percentage ratios (as defined under rule 19.04(9)) are less than 5% by reference to the most recent audited financial year of the new applicant’s trading record period;
             
                  (b)    if the acquisition will be financed by the proceeds raised from a public offer, the new applicant has obtained a certificate of exemption from the Commission with the relevant requirements under paragraphs 32 and 33 of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance; and
             
                  (c)    (i)    where a new applicant’s principal activities involve the acquisition of equity securities (the Exchange may require further information where securities acquired are unlisted), the new applicant is not able to exercise any control, and does not have any significant influence over the underlying company or business to which rules 7.03(2) and 7.03(4) relate, and has disclosed in its listing document the reasons for the acquisition and a confirmation that the counterparties and their respective ultimate beneficial owners are independent of the new applicant and its connected persons. In this regard, “control” means the ability to exercise or control the exercise of 30% (or any amount specified in the Takeovers Code as the level for triggering a mandatory general offer) or more of the voting power at general meeting, or being in a position to control the composition of a majority of the board of directors of the underlying company or business; or
             
                    (ii)    with respect to an acquisition of a business (including acquisition of an associated company and any equity interest in a company other than in the circumstances covered under sub-paragraph (i) above) or a subsidiary by a new applicant, the historical financial information of such business or subsidiary is unavailable, and it would be unduly burdensome for the new applicant to obtain or prepare such financial information; and the new applicant has disclosed in its listing document information required for the announcement for a discloseable transaction under rules 19.58 and 19.60 on each acquisition. In this regard, “unduly burdensome” will be assessed based on each new applicant’s specific facts and circumstances (e.g. why the financial information of the acquisition target is not available and whether the new applicant or its controlling shareholder has sufficient control or influence over the seller to gain access to the acquisition target’s books and records for the purpose of complying with the disclosure requirements under rules 7.03(2) and 7.03(4)).
             
            Cash flow statement
             
            (4A)    the cash flow statement of the issuer or, if the issuer is itself a holding company, the consolidated cash flow statement of the issuer and its subsidiaries in each case for each of the two financial years to which the latest audited financial statements of the issuer have been made up;
             
            Statement of changes in equity
             
            (4B)    a statement of changes in equity of the issuer for each of the two financial years to which the latest audited financial statements of the issuer have been made up;
             
            (4C)    [Repealed 31 December 2015]
             
            Other
             
            (5)    the earnings per share and the basis of computation in respect of each of the years referred to in (1) and (2) above except that the accountants' report need not include this information if, in the opinion of the reporting accountants, such information is not meaningful having regard to the purpose of the accountants' report or if combined results are presented in accordance with rule 7.09 or if the accountants' report relates to an issue of debt securities;
             
            (6)    all movements to and from any reserves including movements arising from:—
             
              (a)    consolidation or acquisition (i.e. the write-off of goodwill/establishment of a capital reserve);
             
              (b)    the revaluation of assets;
             
              (c)    the translation of financial statements denominated in foreign currencies; or
             
              (d)    the redemption or repurchase of shares of the issuer,
             
              if those movements are not reflected in the results in respect of each of the years referred to in (1) and (2) above;
             
            (7)    a statement of the indebtedness as at the end of each of the period reported on showing, as regards bank loans and overdrafts and separately as regards other borrowings of the issuer (or of the issuer and its subsidiaries, including any company which will become a subsidiary by reason of any acquisition falling within rules 7.03(2) and (4)), the aggregate amounts repayable:—
             
              (a)    on demand or within a period not exceeding 1 year;
             
              (b)    within a period of more than 1 year but not exceeding 2 years;
             
              (c)    within a period of more than 2 years but not exceeding 5 years;
             
              (d)    within a period of more than 5 years;
             
            (8)    the details of the principal accounting policies which have been applied in respect of the period reported on;
             
            (9)    a statement of any significant subsequent events which have occurred to any business or company or within any group covered by the accountants' report since the end of the period reported on or, if there are no such events, a statement of that fact; and
             
            (10)    any other matters which appear to the reporting accountants to be relevant having regard to the purpose of the accountants' report.
             
            Note: Where a new applicant satisfies the conditions set out in rule 11.14, references to "the two financial years" or "the financial year" in rules 7.03(2) to 7.03(7) shall mean the period(s) described in rule 7.03(1)(c) (as the case may be).

          • Specific detail concerning financial information (7.04)

            • 7.04

              The report on results and financial position under rules 7.03(1) to (4) above must include the disclosures required under the relevant accounting standards adopted and disclose separately at least the following information:—

              (1) Statement of profit or loss and other comprehensive income
              (a) profit (or loss) on sale of properties;
              (b) profit (or loss) before taxation, including the share of the profit (or loss) of associates and joint ventures, with separate disclosure of any items included therein which are exceptional because of size, nature and incidence; and
              (c) taxation on profits (Hong Kong and overseas) in each case indicating the basis of computation, with separate disclosure of the taxation on share of associates and joint ventures' profits;
              (2) Statement of financial position information as follows, if applicable:
              (a) ageing analysis of accounts receivable; and
              (b) ageing analysis of accounts payable;

              Notes:
              1 If an issuer/ a company is itself a holding company, the information referred to rule 7.04(2) above is of the consolidated statement of financial position of the issuer/ the company and its subsidiaries.
              2 The ageing analysis should normally be presented on the basis of the date of the relevant invoice or demand note and categorised into time-bands based on analysis used by an issuer's management to monitor the issuer's financial position. The basis on which the ageing analysis is presented should be disclosed.
              (3) Dividends
              (a) rates of dividend paid or proposed on each class of shares (with particulars of each such class) and amounts absorbed thereby and any waivers of dividend except that the accountants' report need not disclose this information:—
              (i) if combined results are presented in accordance with rule 7.09 and, in the opinion of the reporting accountants, such information is not meaningful having regard to the purpose of the report;
              (ii) if the accountants' report relates to an issue of debt securities; or
              (iii) in the case of a major transaction; and
              (b) details of any special dividend proposed to be paid after the date of the accountants' report; and
              (4) in the case of banking companies, the information on results and financial position set out in the Guideline on the Application of the Banking (Disclosure) Rules issued by the Hong Kong Monetary Authority must be provided in place of that set out in sub paragraph (1) and (2) above.

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

          • 7.04A

            Where a new applicant acquires any material subsidiary or business during the trading record period (see rule 7.03(1)(a)) and such an acquisition if made by a listed issuer would have been classified at the date of application as a major transaction (see rule 19.06(3)) or a very substantial acquisition (see rule 19.06(5)), it must disclose pre-acquisition financial information (which should include the full financial statements with information required under rules 7.03 and 7.04) on that material subsidiary or business from the commencement of the trading record period (or if the material subsidiary or business commenced its business after the commencement of the trading record period, then from the date of the commencing of its business) to the date of acquisition. Pre-acquisition financial information on the material subsidiary or business must normally be drawn up in conformity with accounting policies adopted by the new applicant and be disclosed in the form of a note to the accountants' report or in a separate accountants' report.
             
            Notes:
             
            (1)    For the purpose of determining whether an acquisition is material and falls within the classification of a major transaction or a very substantial acquisition, reference shall be made to total assets, profits or revenue (as the case may be) for the most recent financial year of the trading record period of the acquired business or subsidiary and this shall be compared to the total assets, profits or revenue (as the case may be) of the new applicant for the same financial year. If the financial year of the acquired business or subsidiary is not coterminous with that of the new applicant, the total assets, profits or revenue (as the case may be) for the most recent financial year of the acquired business or subsidiary should be compared to those of the new applicant for the most recent financial year of its trading record period. For example, if a new applicant’s trading record period covers year 1 and year 2 and it acquired a subsidiary during year 1, the total assets, profits or revenue of the acquired subsidiary for year 2 should be compared to those of the new applicant for year 2; and
             
              (2)    If a new applicant which is allowed a shorter trading record period under rule 11.14 acquires any material subsidiary or business during its trading record period, it must disclose pre-acquisition financial information of that material subsidiary or business for the period from the two financial years immediately preceding the issue of the listing document (or if such material subsidiary or business commenced its business less than two financial years ago, then from the commencement date of its business) to the date of the acquisition.
             

        • Basic contents of accountants' report for certain notifiable transaction circulars

          • 7.05

            In the cases referred to in rule 7.01(3) concerning a circular in connection with a reverse takeover, a very substantial acquisition or a major transaction on the acquisition of a business, company or companies, the accountants' report must include:—

            Three year history of results

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

            Note: For the purposes of this rule, the "relevant period" comprises:
            (1) in the case of a reverse takeover, each of the three financial years of the business or company immediately preceding the issue of the circular and where applicable a stub period;
            (2) in the case of a very substantial acquisition or a major transaction, (i) each of the three financial years of the business or company immediately preceding the issue of the circular and where applicable a stub period; or (ii) if the audited financial statements of the business or company for the latest completed financial year has not been prepared at the time of the issue of the circular, each of the three financial years of the business or company immediately preceding the latest completed financial year and a stub period; or
            (3) such shorter period as may be acceptable to the Exchange

            provided that the relevant period must have ended 6 months or less before the issue of the circular. If the business or company has been in existence for less than the period set out in (1) or (2) above (as the case may be), the relevant period commences on the commencement of the business or the incorporation or establishment of the company.
            (b) in the case of banking companies, the report on results prepared in accordance with rule 7.05(1)(a) must include the information on results set out in the Guideline on the Application of the Banking (Disclosure) Rules issued by the Hong Kong Monetary Authority;

            Three year statement of financial position

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

            Three year cash flow statement

            (2A) the cash flow statement of the business which, or of the company (or, if that company is itself a holding company, of the company and its subsidiaries) in whose share capital an interest, has been acquired, agreed to be acquired or is proposed to be acquired since the date to which the latest published audited financial statements of the issuer have been made up, in each case for each of the three financial years (or for each of the financial years since commencement of such business or the incorporation or establishment of such company, as the case may be, if less) to which the latest audited financial statements of such business or company (as the case may be) have been made up;

            Three year statement of changes in equity

            (2B) a statement of changes in equity of the business which, or of the company (or, if that company is itself a holding company, of the company and its subsidiaries) in whose share capital an interest, has been acquired, agreed to be acquired or is proposed to be acquired since the date to which the latest published audited financial statements of the issuer have been made up, in each case for each of the three financial years (or for each of the financial years since commencement of such business or the incorporation or establishment of such company, as the case may be, if less) to which the latest audited financial statements of such business or company (as the case may be) have been made up;
            (2C) [Repealed 31 December 2015]
            (3) all movements to and from any reserves including movements arising from:—
            (a) consolidation or acquisition (i.e. the write-off of goodwill/establishment of a capital reserve);
            (b) the revaluation of assets;
            (c) the translation of financial statements denominated in foreign currencies; or
            (d) the redemption or repurchase of shares of the issuer,

            if those movements are not reflected in the results in respect of each of the financial years referred to in (1) above;
            (4) a statement of the indebtedness as at the end of each of the period reported on showing, as regards bank loans and overdrafts and separately as regards other borrowings of the business or company or company and its subsidiaries covered by the accountants' report, the aggregate amounts repayable:—
            (a) on demand or within a period not exceeding 1 year;
            (b) within a period of more than 1 year but not exceeding 2 years;
            (c) within a period of more than 2 years but not exceeding 5 years; and
            (d) within a period of more than 5 years,

            except that such an analysis of debt repayments need not be included in the case of a major transaction (see rule 19.67);
            (5) the details of the principal accounting policies which have been applied in respect of the period reported on;
            (6) a statement of any significant subsequent events which have occurred to any business or company or company and its subsidiaries covered by the accountants' report since the end of the period reported on or, if there are no such events, a statement of that fact; and
            (7) any other matters which appear to the reporting accountants to be relevant having regard to the purpose of the accountants' report.

          • 7.06 [Repealed]

            [Repealed 3 June 2010]

          • 7.07

            The report on results and financial position under rules 7.05(1) and (2) must disclose separately the information referred to in rule 7.04.

        • Requirements applicable in all cases

          • 7.08

            In all cases:—

            (1) the accountants' report must include a statement of:
            (a) whether or not the financial statements for the period reported on have been audited and, if so, by whom; and
            (b) whether or not any audited financial statements have been made up since the end of the last financial period reported on;
            (2) the reporting accountants must express an opinion as to whether or not the relevant information gives, for the purposes of the accountants' report, a true and fair view of the results and cash flows for the period reported on and of the statement of financial position as at the end of each of the period reported on;
            (3) the accountants' report must state that it has been prepared in accordance with the Hong Kong Standard on Investment Circular Reporting Engagements 200 – Accountants’ Reports on Historical Financial Information in Investment Circulars (HKSIR 200) issued by the Hong Kong Institute of Certified Public Accountants;
            (4) the reporting accountants must be named in the accountants' report; and
            (5) the accountants' report must be dated.

        • Individual or combined results

          • 7.09

            In the case of a new applicant (rule 7.01(1)) and an offer of securities to the public for subscription or purchase falling within rule 7.01(2), the reporting accountants must report on the consolidated or combined financial history of results and the consolidated or combined statement of financial position of the issuer and its subsidiaries and any business or subsidiary acquired or proposed to be acquired since the date to which the latest audited financial statements of the issuer have been made up, unless otherwise agreed by the Exchange.

          • 7.10

            In the case of a circular issued by a listed issuer in connection with the acquisition of more than one business and/or company and/or group of companies, the reporting accountants must report on the individual financial histories of results and the individual statements of financial position of each of those businesses, companies or groups of companies referred to in rule 7.05, unless otherwise agreed by the Exchange.

        • Disclosure

          • 7.11

            The information to be disclosed in respect of rules 7.03, 7.09 and 7.10 must be in accordance with best practice which is at least that required to be disclosed in respect of those specific matters in the financial statements of a company under the HKFRS, IFRS or CASBE in the case of a PRC issuer that has adopted CASBE for the preparation of its annual financial statements and, in the case of banking companies, the Guideline on the Application of the Banking (Disclosure) Rules issued by the Hong Kong Monetary Authority ("Guideline").
             
            Note:    If a new applicant is a banking company organised outside Hong Kong and primarily regulated by a regulator which has functions similar to the Hong Kong Monetary Authority and provides adequate supervision to the applicant, the Exchange may consider an application for a waiver from strict compliance with the disclosure requirement in relation to the Guideline. The applicant must provide alternative disclosure in its listing document, including disclosure on capital adequacy, loan quality, loan provisioning, and guarantees, contingencies and other commitments, that is sufficient for potential investors to make a fully informed investment decision.

        • Accounting standards

          • 7.12

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

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

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

          • 7.13 [Repealed]

            [Repealed 1 January 2022]

          • 7.14

            In the case of the accountants’ report for an overseas issuer, where the Exchange allows a report to be drawn up otherwise than in conformity with either of the standards referred to in rule 7.12, the report will be required to conform with financial reporting standards acceptable to the Exchange. In such cases the Exchange will normally require the report to contain a reconciliation statement setting out the financial effect of the material differences (if any) from either of the standards referred to in rule 7.12.

            Notes:
             
            1.    The suitability of alternative overseas financial reporting standards depends on whether there is any significant difference between the overseas financial reporting standards and IFRS, and whether there is any concrete proposal to converge or substantially converge the overseas financial reporting standards with IFRS.
             
            2.    A list of alternative overseas financial reporting standards that are considered comparable to HKFRS or IFRS is published on the Exchange’s website, as amended from time to time.
             
            3.    The reconciliation statement must be reviewed by the reporting accountant that reports on the relevant financial statements.
             
            4.    An overseas issuer with a dual listing that adopts one of the alternative standards referred to in Note 2 above (other than issuers incorporated in a member state of the European Union which have adopted EU-IFRS) for the preparation of its accountants’ reports must adopt HKFRS or IFRS if it de-lists from the jurisdiction of that alternative standard and must do so for any annual, interim and quarterly financial statements that fall due under the GEM Listing Rules, and are published, after the first anniversary of the date of its de-listing.
             

          • 7.15

            The accountants’ report for a PRC issuer must normally be drawn up in accordance with either of the standards referred to in rule 7.12.

          • 7.16

            Without prejudice to the provisions of rule 7.14, any significant departure from either of the accounting standards referred to in rule 7.12 must be disclosed and explained and, to the extent practicable, the financial effects of such departure quantified.

          • 7.17

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

        • Auditing standards

          • 7.17A

            In the case of the accountants’ report for an overseas issuer, such report will not normally be regarded as acceptable unless the relevant financial statements have been audited to a standard comparable to that required by the Hong Kong Institute of Certified Public Accountants or by the International Auditing and Assurance Standards Board of the International Federation of Accountants.

            Note:    A list of alternative overseas auditing standards that are considered comparable to the standards set out in this rule is published on the Exchange’s website, as amended from time to time.
             

        • Statement of adjustments

          • 7.18

            In preparing the accountants' report, the reporting accountants must make such adjustments (if any) as are in their opinion appropriate for the purposes of the accountants' report and state therein that all adjustments considered necessary have been made, or (where appropriate) that no adjustments were considered necessary. Where adjustments are made, a written statement (the statement of adjustments) is required to be published on the Exchange’s website and the issuer’s own website, and must be signed by the reporting accountants (see paragraph 52 of Part A and paragraph 42 of Part B of Appendix 1).

            Note: Where a listing applicant is seeking a simultaneously listing and is precluded by the regulation in that jurisdiction from making adjustments as envisaged by rule 7.18, additional information should be provided to show details of the adjustments (if any) and the effect of such on the results and net assets and liabilities as if such adjustments would have been made for purpose of the accountants' report prepared on the basis in accordance with the Hong Kong Standard on Investment Circular Reporting Engagements 200 – Accountants’ Reports on Historical Financial Information in Investment Circulars (HKSIR 200) issued by the Hong Kong Institute of certified Public Accountants.

          • 7.19

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

          • 7.20

            Where an accountants' report is set out in a listing document the statement of adjustments relating to that report must be submitted to the Exchange in the draft form prescribed in rules 12.22(3), 12.26B(2) and 28.13(7) and in certified form in accordance with rules 12.23A(2) and 28.14(3). In every other case, the statement of adjustments must be submitted to the Exchange at the same time as the proofs of the circular containing the accountants' report are submitted.

        • Reference to other reports

          • 7.21

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

        • Modified reports

          • 7.22

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

          • 7.23

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

        • Additional matters for disclosure

          • 7.24

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

        • General

          • 7.25 [Repealed]

            [Repealed 31 December 2015]

          • 7.26

            It is emphasised that these requirements are not exhaustive and that further information may be required, or the required information varied, by the Exchange where it considers it necessary. In cases of doubt or difficulty, the reporting accountants must consult the Exchange through the issuer's Sponsor or, in circumstances where the issuer is no longer required to have (and does not otherwise retain) a Sponsor, through the issuer's authorised representative or financial adviser.

        • Pro Forma Financial Information

          • 7.27

            In the cases referred to in rule 7.01(3) concerning a circular in connection with a major transaction, the pro forma financial information required under rules 19.67(6)(a)(ii) or 19.67(6)(b)(ii) on the enlarged group (i.e. the issuer, its subsidiaries and any business or subsidiary or, where applicable, assets acquired or proposed to be acquired since the date to which the latest audited financial statements of the issuer have been made up (including but not limited to any business, company or companies being acquired)) must include all the information referred to in rule 7.31 in respect of such enlarged group.

          • 7.28

            In the cases referred to in rule 7.01(3) concerning a circular in connection with a reverse takeover, an extreme transaction or a very substantial acquisition, the pro forma financial information required under rule 19.69(4)(a)(ii) or 19.69(4)(b)(ii) on the enlarged group (i.e. the issuer, its subsidiaries and any business or subsidiary or, where applicable, assets acquired or proposed to be acquired since the date to which the latest audited financial statements of the issuer have been made up (including but not limited to any business, company or companies being acquired)) must include all the information referred to in rule 7.31 in respect of such enlarged group.

          • 7.29

            For a circular in connection with a very substantial disposal, the pro forma financial information required under rules 19.68(2)(a)(ii) or 19.68(2)(b)(ii) on the remaining group must include the information referred to in rule 7.31 in respect of the remaining group.

          • 7.30

            In the case of a new applicant (rule 7.01(1)) which has acquired or proposed to acquire any businesses or companies, which would at the date of application or such later date of acquisition before listing of the applicant be classified as a major subsidiary, since the date to which the latest audited financial statements of the issuer have been made up, it must include as an appendix to its listing document the pro forma financial information required under rule 7.31 in respect of the enlarged group (i.e. the new applicant, its subsidiaries and any businesses or companies acquired or proposed to be acquired since the date to which the latest audited financial statements of the issuer have been made up) and the pro forma financial information must be reported on by the reporting accountants as required under rule 7.31(7).
             
            Notes:    (1)  For the purpose of rule 7.30, all acquisitions or proposed acquisitions since the date to which the latest audited financial statements in the accountants' report of the issuer have been made up, whether of businesses or companies, should be aggregated. If the aggregated total assets, profits or revenue represents 5% or more under any of the percentage ratios as defined under rule 19.04(9), these acquisitions will be deemed to be an acquisition of a major subsidiary for the purpose of rule 7.30. 100% of the major subsidiary's total assets, profits or revenue (as the case may be) or, where the major subsidiary itself has subsidiaries, the consolidated total assets, profits or revenue (as the case may be) of the major subsidiary is to be compared to the total assets, profits or revenue (as the case may be) shown in the issuer's latest audited consolidated financial statements in the accountants' report irrespective of the interest held in the major subsidiary.
             
                (2)    Where any of the percentage ratios calculated in accordance with (1) above is 5% or more but is less than 100%, the issuer should disclose, as a minimum, a pro forma statement of assets and liabilities of the enlarged group. Where any of the percentage ratios is 100% or more, the issuer should disclose, as a minimum, a pro forma balance sheet, a pro forma income statement and a pro forma cash flow statement of the enlarged group.

          • 7.31

            Where an issuer includes pro forma financial information in any document (whether or not such disclosure of pro forma financial information is required under the GEM Listing Rules), that information must comply with rules 7.31(1) to (6) and a report in the terms of rule 7.31(7) must be included in the relevant document.

            (1) The pro forma financial information must provide investors with information about the impact of the transaction the subject of the document by illustrating how that transaction might have affected the financial information presented in the document, had the transaction been undertaken at the commencement of the period being reported on or, in the case of a pro forma statement of financial position or net asset statement, at the date reported. The pro forma financial information presented must not be misleading, must assist investors in analysing the future prospects of the issuer and must include all appropriate adjustments permitted by rule 7.31(6), of which the issuer is aware, necessary to give effect to the transaction as if the transaction had been undertaken at the commencement of the period being reported on or, in the case of a pro forma statement of financial position or net asset statement, at the date reported on.
            (2) The information must clearly state:
            (a) the purpose for which it has been prepared;
            (b) that it is prepared for illustrative purposes only; and
            (c) that because of its nature, it may not give a true picture of the issuer's financial position or results.
            (3) The information must be presented in columnar format showing separately the unadjusted financial information, the pro forma adjustments and the pro forma financial information. The pro forma financial information must be prepared in a manner consistent with both the format and accounting policies adopted by the issuer in its financial statements and must identify:
            (a) the basis upon which it is prepared; and
            (b) the source of each item of information and adjustment.

            Pro forma figures must be given no greater prominence in the document than audited figures.
            (4) Pro forma financial information may only be published in respect of:
            (a) the current financial period;
            (b) the most recently completed financial period; and/or
            (c) the most recent interim period for which relevant unadjusted information has been or will be published or is being published in the same document;

            and, in the case of a pro forma statement of financial position or net asset statement, as at the date on which such periods end or ended.
            (5) The unadjusted information must be derived from the most recent:
            (a) audited published financial statements, published half-year reports or published half-year or annual results announcements;
            (b) accountants' report;
            (c) previously published pro forma financial information reported on in accordance with rule 7.31(7); or
            (d) published profit forecast or estimate.
            (6) Any adjustments which are made to the information referred to in rule 7.31(5) in relation to any pro forma statement must be:
            (a) clearly shown and explained;
            (b) directly attributable to the transaction concerned and not relating to future events or decisions;
            (c) factually supportable; and
            (d) in respect of a pro forma profit or cash flow statement, clearly identified as to those adjustments which are expected to have a continuing effect on the issuer and those which are not.
            (7) The pro forma financial information must be reported on in the document by the auditors or reporting accountants who must report that, in their opinion:
            (a) the pro forma financial information has been properly compiled on the basis stated;
            (b) such basis is consistent with the accounting policies of the issuer; and
            (c) the adjustments are appropriate for the purposes of the pro forma financial information as disclosed pursuant to rule 7.31(1).
            (8) Where pro forma earnings per share information is given for a transaction which includes the issue of securities, the calculation is to be based on the weighted average number of shares outstanding during the period, adjusted as if that issue had taken place at the beginning of the period.

      • Chapter 8 Valuation of and Information on Properties

        • Definitions

          • 8.01

            In this Chapter:—

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

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

            Notes:

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

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

            A property interest may comprise:
            (1) one or more units in the same building or complex;
            (2) one or more properties located at the same address or lot number;
            (3) one or more properties comprising an integrated facility;
            (4) one or more properties, structures or facilities comprising a property development project (even if there are different phases);
            (5) one or more properties held for investment within one complex;
            (6) one or more properties, structures or facilities located contiguously to each other or located on adjoining lots and used for the same or similar operational/ business purposes; or
            (7) a project or phases of development presented to the public as one whole project or forming a single operating entity.
            (4) "total assets" means, for an applicant, the total fixed assets, including intangible assets, plus the total current and non-current assets, as shown in the latest audited consolidated financial statements in the accountants' report in the listing document. For an issuer, total assets has the same meaning as in Chapter 19.

        • Requirements for an applicant

          • 8.01A

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

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

          • 8.01B

            The listing document must include:
             
            (1)    for property interests of an applicant's property activities:
             
              (a)    the full text of valuation reports of property interests that are required to be valued except where summary disclosure is allowed; and
             
              (b)    a summary disclosure if the market value of a property interest as determined by the valuer is less than 5% of its total property interests that are required to be valued under rule 8.01A(1). See Appendix 19 for the summary form of disclosure. The Exchange may accept variation of the summary form of disclosure based on the applicant's circumstances. The valuation report setting out the information required by these Rules must be published on the Exchange's website and the issuer's own website;
             
                Note: The summary form of disclosure may be varied based on the applicant's circumstances. An applicant must include additional information necessary for investors to make an informed decision.
             
            (2)    for property interests of an applicant's non-property activities:
             
              (a)    the full text of valuation reports if the carrying amount of a property interest is or is above 15% of its total assets; and
             
              (b)    a statement that, except for the property interests in the valuation reports, no single property interest that forms part of its non-property activities has a carrying amount of 15% or more of total assets;
             
            (3)    an overview of property interests not covered by a valuation report, including their number and approximate size range, uses, how they are held and the general description of the area where they are located. The overview may include property interests voluntarily valued and disclosed separately in the listing document; and
             
            (4)    the general information in rule 8.36, if it applies.
             

          • 8.01C

            Rules 8.01A and 8.01B (except rules 8.01B(3) and 8.01B(4)) do not apply to property interests ancillary to the exploration for and/or extraction of Natural Resources (as defined in Chapter 18A) if the listing document includes a valuation that encompasses these Natural Resources and ancillary property interests, and together have been valued as a business or as an operating entity by a Competent Evaluator (as defined in Chapter 18A).

            Note: Rules 8.01A(2) and 8.01B(2) to (4) apply to property interests ancillary to the exploration for and/or extraction of Natural Resources if the listing document does not include a valuation of all the ancillary property interests conducted by a Competent Evaluator.

        • Requirements for an issuer

          • 8.02

            For an acquisition or disposal of any property interest, or of a company whose assets consist solely or mainly of property, where any of the percentage ratios (as defined in rule 19.04(9)) of the transaction is or is above 25%, then a valuation of and information on the property must be included in the circular issued to shareholders in connection with the acquisition or disposal (see rule 19.66(12)), unless rule 8.02A applies.

            Note: In this rule and in rule 8.03, a circular issued "in connection with an acquisition" includes a listing document issued for a rights issue, the proceeds of which are to be used to retire a debt with which the property or company had previously been acquired but the listing document need not contain a valuation report if a circular containing such a valuation report was issued to shareholders when the property or company was acquired.

          • 8.02A

            Valuation of a property interest is not required if:

            (1) it is acquired from the Hong Kong Government (or, at the discretion of the Exchange, a body related to the Hong Kong Government) at a public auction or by sealed tender; or
            (2) the property is acquired under a Qualified Property Acquisition (as defined in rule 19.04(10C)) falling under rules 19.33A to 19.33B; or
            (3) the company being acquired or disposed of is listed on the Exchange, except if it is a connected transaction; or
            (4) subject to rule 8.03, the property interests in the company being acquired or disposed of is ancillary to the exploration for and/or extraction of Natural Resources (as defined in Chapter 18A) and the circular includes a valuation that encompasses these Natural Resources and ancillary property interests, and together have been valued as a business or as an operating entity by a Competent Evaluator (as defined in Chapter 18A); or

            Note: Rule 8.02 applies to property interests ancillary to the exploration for and/or extraction of Natural Resources if the circular does not include a valuation of all the ancillary property interests conducted by a Competent Evaluator.
            (5) subject to rule 8.03, the carrying amount of a property interest in the company being acquired or disposed of is below 1% of the issuer's total assets. The total carrying amount of property interests not valued must not exceed 10% of the issuer's total assets.

          • 8.02B

            Subject to rule 8.03, the circular issued under rule 8.02 must include:
             
            (1)    for a property interest, the full text of valuation reports;
             
            (2)    for an unlisted company whose assets consist solely or mainly of property:
             
              (a)    the full text of valuation reports of property interests that are required to be valued under rule 8.02 except where summary disclosure is allowed; and
             
              (b)    summary disclosure if the value of a property interest as determined by the valuer is less than 5% of the total property interests that are required to be valued under rule 8.02. See Appendix 19 for the summary form of disclosure. The Exchange may accept variation of the summary form of disclosure based on the issuer's circumstances. The valuer's report setting out the information required by these Rules must be published on the Exchange's website and the issuer's own website; and
             
                Note: The summary form of disclosure may be varied based on the issuer's circumstances. An issuer must include additional information necessary for investors to make an informed decision.
             
              (c)    an overview of property interests not covered by a valuation report, including their number and approximate size range, uses, how they are held and the general description of the area where they are located. The overview may include property interests voluntarily valued and disclosed separately in the circular;
             
            (3)    for a company listed on the Exchange whose assets consist solely or mainly of property, an overview of property interests, including their number and approximate size range, uses, how they are held and the general description of the area where they are located; and
             
            (4)    the general information in rule 8.36, if it applies.
             

          • 8.03

            For a connected transaction involving an acquisition or a disposal of any property interest or a company whose assets consist solely or mainly of property (including a company listed on the Exchange), a valuation of and information on the property must be included in any circular issued to shareholders in connection with the acquisition or disposal (see rule 20.68(7)). The circular must include full text of valuation reports and the general information in rule 8.36, if it applies.

          • 8.03A [Repealed]

            [Repealed 1 January 2012]

        • Valuation report requirements

          • Basic contents (8.04-8.08)

            • 8.04

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

            • 8.05

              All valuation reports should normally contain the following information:—

              (1) a description of each property including:—
              (a) an address sufficient to identify the property, which should generally include postal address, lot number and such further designation as is registered with the appropriate government authorities in the jurisdiction in which the property is located;
              (b) a brief description (e.g. whether land or building, approximate area, etc.);
              (c) the existing use (e.g. shops, offices, factories, residential, etc.);
              (d) the Ground/Government Rent;
              (e) a summary of the terms of tenancies, leases or underleases (including repairing obligations, where material):—
              (i) pursuant to which the issuer holds properties from the government or superior landlords; and/or
              (ii) pursuant to which the issuer rents or leases properties to tenants or lessees;
              (f) the approximate age of buildings;
              (g) the terms of tenure;
              (h) the terms of any intra-group lease granted by a parent company to a subsidiary on property occupied by the group (identifying the properties) (if any);
              (i) the capital value in existing state at the effective date as at which the property was valued;
              (j) the current planning or zoning use;
              (k) the options or rights of pre-emption concerning or affecting the property (if any);
              (l) the basis of and approach to valuation for the property interest;
              (m) when the site was last inspected;
              (n) summary of investigation carried out, including details of inspection, such as building conditions, availability of building services, etc.;
              (o) nature and source of information relied on;
              (p) details of title and ownership;
              (q) details of encumbrances;
              (r) how the properties are grouped together for each valuation certificate;
              (s) names and qualifications of persons who carried out the site inspection; and
              (t) any other matters which may materially affect the value;
              (2) without prejudice to the generality of sub-clause 1(e) above, where the property is rented or leased by the issuer to tenants or lessees, details of the rentals, including:—
              (a) the existing monthly rental before tax if the property is wholly or partly let together with the amount and a description of any outgoings or disbursements from the rent, and, if materially different, the estimated current monthly market rental obtainable, on the basis that the property was available to let on the effective date as at which the property was valued;
              (b) a summary of any rent review provisions, where material; and
              (c) the amount of vacant space, where material;
              (3) where the property is in the process of being developed, the following details in addition to those specified in sub-paragraph 1 above, where available:—
              (a) details of development potential and whether building plans have been approved or planning consent has been obtained and any conditions imposed in respect of such approval;
              (b) any material restrictions on development including building covenants and time limits for completion of the development;
              (c) existing stage of development;
              (d) estimated completion date;
              (e) estimated cost of carrying out the development or (where part of the development has al been carried out) the estimated cost of completing the development;
              (f) estimated capital value after completion;
              (g) any material special or general conditions affecting the development of the property;
              (h) any conditions imposed as to construction of roadways, pathways, drainage, sewage and other facilities or services for public use, if material;
              (i) any sales arrangements and/or letting arrangements existing at the effective date as at which the property was valued; and
              (j) any construction costs incurred up to the effective date as at which the property was valued;
              (4) where property is held for future development purposes, the following details in addition to those specified in sub-paragraph 1 above, where available:—
              (a) details of development potential and whether building plans have been approved or planning consent has been obtained and any conditions imposed in respect of such approval;
              (b) any material special or general conditions affecting the development of the property including building covenants and time limits for completion of the development; and
              (c) any conditions imposed as to construction of roadways, pathways, drainage, sewage and other facilities or services for public use, if material;
              (5) a classification of the property according to the purpose for which it is held. The acceptable categories are:—
              (a) property held for development;
              (b) property held for investment;
              (c) property held for owner occupation; and
              (d) property held for sale;
              (6) details of any agreement or proposals as to any proposed transaction regarding the property between the issuer and any other member of the group;
              (7) the name of the valuer, his address and professional qualification;
              (8) the effective date as at which the property was valued and the date of the valuation; and
              (9) such other information as the Exchange may require.

            • 8.06 [Repealed]

              [Repealed 1 January 2012]

            • 8.07 [Repealed]

              [Repealed 1 January 2012]

            • 8.08 [Repealed]

              [Repealed 1 January 2012]

        • Disclosure of legal opinion to valuer

          • 8.09

            In all cases where a legal opinion is required under the GEM Listing Rules (or is otherwise obtained by the issuer) in connection with the title to a property, such opinion together, so far as practicable, with copies of any document referred to therein should be made available to the valuer carrying out any valuation in respect of the property, prior to the completion of the valuation report, and the valuer shall explain whether and if so how he has taken account of the content of such opinion in the valuation of the property.

        • Valuations of properties situated outside Hong Kong

          • Additional provisions (8.10-8.11)

            • 8.10

              In the case of valuation reports in respect of properties situated outside Hong Kong, the Exchange reserves the right to impose additional or different conditions to those specified in rules 8.04 to 8.09.

            • 8.11

              Without prejudice to the generality of rule 8.10, rules 8.12 to 8.19 apply to properties situated in the PRC and rules 8.20 to 8.29 apply to properties situated outside Hong Kong (including those situated in the PRC).

          • Specific provisions with respect to PRC properties (8.12-8.17)

            • 8.12

              The valuation report of property located in the PRC must clearly state the nature of the interest being valued. The report must also specify any material conditions or information regarding title and other relevant matters contained in the legal opinion relating to the property.

              Note: In particular, the valuation report must clearly state whether the valuation is of a vested legal title or of a right to acquire a vested legal title to the relevant property or, for example, only right to occupy the property for a fixed period or to enjoy rent or other income arising from the property.

            • 8.13

              With respect to PRC properties:—

              (1) a long-term title certificate will be treated as the operative equivalent to the Hong Kong legal concept of vested title to the relevant property. The new applicant or listed issuer should confirm, with the benefit of a PRC legal opinion from a firm authorised by an appropriate authority in the PRC to advise in relation to listed companies, whether a long-term title certificate has been obtained by the relevant party in respect of the relevant property. The Exchange may require production of the title certificate and may require that it be made available for inspection; or

              Note: For the purposes of this rule and the other relevant provisions of this Chapter, the Exchange has a discretion to decide on whether or not any title certificate constitutes a "long term" title certificate under this rule.
              (2) in respect of a grant of land by a government land administration bureau in the PRC or with respect to a transfer of land use rights where the issue of a title certificate is pending, a properly approved land grant or land transfer contract in writing accompanied by a PRC legal opinion (as described in sub-paragraph (1) above) as to the validity of the approval may, in the case only of a listed issuer, be acceptable as evidence of a transferee's pending title to the land to be granted or transferred. The Exchange may require production of the approved contract and may require that it be made available for inspection.

            • 8.14

              Where property located in the PRC is held or being acquired for development and where the residual method is used as the primary basis for the valuation (see rule 8.24), the relevant party should obtain an acceptable PRC legal opinion (as described in rule 8.13(1)) which describes all consents, permits and regulations which need to be obtained or satisfied in respect of the development, or proposed development upon which any valuation is based. Such opinion should confirm whether and to what extent consent has been obtained for the proposed development and all such information should be included in the valuation report and in the relevant document.

            • 8.15

              In respect of PRC properties where long-term title certificates are not obtained by a new applicant or a listed issuer, any property revaluation surplus arising from those PRC properties must be excluded from all annual reports, accounts and other financial statements of the issuer and from the net tangible asset statement in any listing document or circular of the issuer.

            • 8.16

              Where the consideration for the grant of any long-term title certificate involves any obligation on the issuer to resettle or pay compensation to any occupier or former occupier of property forming the subject of the certificate or to any other persons or any obligation to construct or pay the costs of construction of public facilities, the valuation report must disclose details of any such obligation, to the extent that the same remains outstanding, and indicate, where relevant, its effect on the value of and title to the property.

              Note: If there is an outstanding obligation on the part of the issuer to transfer part of any property under development to the original occupier or other persons free of any payment, this matter must be disclosed and the valuer should confirm whether, in arriving at the value of the property, he has taken the same into account.

            • 8.17

              Except for companies with infrastructure projects accepted by the Exchange under rule 11.14(1) or otherwise, where the new applicant has interests in a joint venture company whose income stream is derived from a PRC property but the long-term title certificate for such property is not obtained by the joint venture company, no business valuation on the applicant's interests in the joint venture company may be included in the listing document.

          • Joint venture interests in PRC properties (8.18-8.19)

            • 8.18

              In the case of PRC property held by any joint venture entity or pursuant to some other form of joint arrangement, the legal opinions referred to in rules 8.13 and 8.14 should include a description of the significant terms of the joint venture, including a description of the equity and profit sharing arrangements of the parties. In addition, the opinion should state whether the joint venture entity has obtained all necessary licences to operate in the location where the property is situated. A summary of the content of such opinion should also be disclosed in any valuation report and in the relevant document.

            • 8.19

              Where a new applicant or listed issuer has or is proposing to acquire an interest in a joint venture entity, which, in turn, has or is proposing to acquire an interest in a property situated in the PRC, and where the property is beneficially owned or retained by one of the parties to the joint venture and does not vest in the joint venture entity itself, and where the new applicant or listed issuer has or is intending to acquire some right to occupy the property from the relevant party to the joint venture or to enjoy income or profit therefrom, then the legal opinions referred to in rules 8.13 and 8.14 should also confirm:—

              (1) the exact nature of the interest in the joint venture entity which the new applicant or the listed issuer has or is proposing to acquire;
              (2) whether the terms of any joint venture agreement provide for the transfer of the legal title to the property to the joint venture entity and the status of such transfer;
              (3) whether the right which the new applicant or the listed issuer has or is intending to acquire is capable, as a matter of PRC law, of being granted by the party in whom legal title to the property is vested;
              (4) whether and to what extent the right acquired or to be acquired is enforceable in the PRC and whether it will be freely transferable by the new applicant or the listed issuer to any third party; and
              (5) whether all relevant regulatory approvals have been obtained.

          • Contents of valuation report (8.20-8.21)

            • 8.20

              Where the relevant property has been valued on an open market basis, but such valuation is not by reference to comparable market transactions, the valuer may be required to discuss and disclose in the valuation report the assumptions underlying the open market valuation method in the context of the market in which the property is situated. Valuers may be asked to justify the assumptions they have made in the valuation report particularly where local market conditions or legal circumstances may differ greatly from those in Hong Kong.

            • 8.21

              Where the property the subject of the valuation report has been valued on an open market basis and by reference to the residual method, the valuation report should:

              (1) state this fact;
              (2) describe the valuation method used together with a brief description of that method in simple language;
              (3) provide a statement showing:—
              (a) gross development value of the various components in the proposed development with an explanation of any comparables used and the adjustments made to arrive at the figure for gross development value;
              (b) construction costs based on the report of a properly qualified quantity surveyor as referred to in rule 8.23;
              (c) all fees charged or to be charged;
              (d) interest charges;
              (e) developer's profit; and
              (f) any other component or comparable figure used in the residual method; and
              (4) describe the assumed development potential for the relevant property, including relevant plot ratios. Any approval or any indication from any competent authority which differs from the development potential or plot ratios assumed by the valuer should be set out in the valuation report. If no relevant approval has been obtained from a competent authority the valuer should state the source of and the basis of the assumptions used.

          • Income or profit method of valuation (8.22)

            • 8.22

              Where relevant property (or part thereof) has been valued through use of the profit or income method of valuation, the valuation report should in addition state the assumptions upon which this method is based and whether there is any comparable market evidence, for example, in the case of a hotel, of room rates and occupancy levels in the same or similar location to the relevant property.

          • Valuation by residual method (8.23-8.25)

            • 8.23

              Where the valuation figure is derived through use of the residual method, the new applicant and/or listed issuer should, in addition to obtaining the valuation report, instruct a professionally qualified quantity surveyor acceptable to the Exchange to verify the estimated costs of carrying out the development. The report of the quantity surveyor should be included together with the valuation report.

            • 8.24

              Where valuations are required under Chapter 8 of these Rules and where the primary method for valuing a property is the residual method, the Exchange may require the directors of the issuer or, in the case of a connected transaction, the independent directors, to include a statement in a prominent position in the relevant document with respect to the valuation of any property held for investment, development, future development and sale. In such statement the directors/the independent directors must:—

              (1) critically discuss and assess the assumptions made by the valuer as disclosed in the valuation report for the aforesaid categories of property and the material effect that any variation of those assumptions may have on the valuation figure;
              (2) critically discuss the effect of any material conditions affecting the status of the legal title to any such property as disclosed in any legal opinion obtained in respect of such property;
              (3) describe in the case of property in the process of being developed or held for future development, and where the valuation is based on the expected sale value of the completed development, the exact stage at which any proposed development has reached; and
              (4) describe all known relevant local taxes which may be charged in respect of any proposed property development project and explain how such taxes could affect the calculation of developer's profit contained in any calculation pursuant to the residual method, and the consequent effect on any valuation figure.

            • 8.25

              Where the residual method is used, the valuation report should include a general warning statement in substantially the following form:

              "Warning statement
              The valuation arrived at has not been determined by reference to comparable market transactions which is the most reliable method for valuing property assets and the most common method used for valuing properties in Hong Kong. In contrast, because of the lack of comparable market transactions in the locality in which the subject property is situated, this valuation has used the residual method which is generally acknowledged as being a less reliable valuation method. The residual method is essentially a means of valuing land by reference to its development potential by deducting costs and developer's profit from its estimated completed development value. It relies upon a series of assumptions made by the valuer which produce an arithmetical calculation of the expected current sale value as at [date] of a property being developed or held for development or redevelopment. Where the property is located in a relatively under-developed market such as [place] those assumptions are often based on imperfect market evidence. A range of values may be attributable to the property depending upon the assumptions made. While the valuer has exercised its professional judgement in arriving at the value, investors are urged to consider carefully the nature of such assumptions which are disclosed in the valuation report and should exercise caution in interpreting the valuation report."

              Note: Where property assets represent or will represent substantially the whole or a majority of the assets of the new applicant or listed issuer and certain or all of those assets have been valued through use of the residual method, the warning statement set out in this rule must also appear or be referred to in the "Risk Factors" section of the relevant document.

          • Accountancy treatment (8.26)

            • 8.26

              In all cases where a valuation report is required, the Exchange may also require the directors to describe the accounting treatment to be adopted in respect of any property assets situated outside Hong Kong.

          • Notifiable transactions (8.27)

            • 8.27

              Where in any transaction which falls within rules 19.06, 19.06B or 19.06C, the relevant party intends to contribute capital or to contribute to or become liable for all or part of the cost of development of any property project or development, or to any company or venture involved in any development project, then the Exchange:
               
              (1)    may require further disclosure of how such capital contribution or development costs have been derived;
               
              (2)    may require an independent valuation report, even if such report is not expressly required under Chapter 8; and
               
              (3)    may consider taking account of such capital or cost contributions when considering whether the transaction falls within any of the categories of notifiable transactions referred to in rules 19.06, 19.06B or 19.06C.
               

          • Connected transactions (8.28)

            • 8.28

              In the case of connected transactions, where the valuer has relied upon information supplied by a connected person this should be clearly stated in the valuation report and the extent to which the valuer has independently verified this information should be set out prominently in the relevant document.

          • Date and cost of original acquisition (8.29)

            • 8.29

              Where the property the subject of the valuation has been acquired within 5 years of the date of valuation, the new applicant or the listed issuer should supply to the valuer for inclusion in his report the relevant date and cost of acquisition and the total costs expended on the property, which should be included alongside the current valuation figure.

        • Effective date

          • 8.30

            The effective date as at which the property was valued must not be more than three months before the date on which the relative listing document or circular is issued and if such effective date is not the same as the end of the last period reported on by the reporting accountants (see Chapter 7), it will be necessary for the listing document or circular to include a statement reconciling the valuation figure with the figure included in the balance sheet as at the end of that period.

        • Independence of valuer

          • 8.31

            Unless dispensation is obtained from the Exchange, all valuations of properties must be prepared by an independent qualified valuer. (See rule 8.32 concerning qualifications). For this purpose, a valuer is not independent if:—

            (1) he is an officer or servant or proposed director of the issuer or the issuer's subsidiary or holding company or of a subsidiary of the issuer's holding company or any affiliated company; or
            (2) in the case of a firm or company of valuers, it is the issuer's subsidiary or holding company or a subsidiary of the issuer's holding company or any of its partners, directors or officers is an officer or servant or proposed director of the issuer or the issuer's subsidiary or holding company or of a subsidiary of the issuer's holding company or any affiliated company.

        • Qualifications of valuer

          • 8.32

            A valuer is a qualified valuer only if:—
             
            (1)    for the purpose of valuing properties situated in Hong Kong, the valuer is a fellow or associate member of The Hong Kong Institute of Surveyors and carries on the business in Hong Kong of valuing properties and is authorised to do so by the rules of that body; and
             
            (2)    for the purpose of valuing properties situated outside Hong Kong, the valuer has the appropriate professional qualifications and experience. This, he will normally be regarded as having if he is subject to the discipline of The Hong Kong Institute of Surveyors or The Royal Institution of Chartered Surveyors or a professional body of similar standing to such bodies and has a minimum of 2 years' experience in valuing properties in the relevant location or has relevant experience.

          • 8.33

            The professional qualifications of the valuer and, where properties situated outside Hong Kong have been valued, his experience in valuing properties within the relevant location (and, where the valuation is made on behalf of a valuation company, his experience with the company) should be disclosed in the valuation report.

        • Other valuation reports

          • 8.34

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

        • Exchange rates

          • 8.35

            Where any figures or calculations included in the valuation report rely on exchange rates, the rate used and relevant date should be stated. Where there has been a fluctuation in exchange rates between the date of the valuation and the date of the listing document or circular to shareholders, this fact together with the effect of the fluctuation on the valuation in the valuation report should be set out.

        • General disclosure

          • 8.36

            A listing document, or a circular issued under rules 8.02 and 8.03, must disclose relevant information on material properties (including leased properties).

            Notes: Information may include the following:

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

      • Chapter 9 Trading Halt, Suspension and Resumption of Dealings, Cancellation and Withdrawal of Listing

        • General

          • 9.01

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

          • 9.02

            On-going suitability for listing will be assessed by reference to the requirements of Chapter 11 and the issuer's state of compliance with the continuing obligations set out in the GEM Listing Rules.

        • Trading halt or suspension

          • 9.03

            An issuer shall endeavour to avoid any trading halt or suspension of dealings in its securities.

            Notes:

            1 Recourse to a trading halt or suspension should only be made where necessary in the interests of all parties.
            2 In many cases the appropriate course of action, which the Exchange expects all issuers to follow so far as reasonably practicable, will be for the issuer to publish an announcement to avoid the need for a trading halt or suspension.
            3 Where a detailed announcement may take time to prepare, the issuer should, subject to rules 19.37 and 20.33 concerning announcements of Notifiable and connected transactions, consider making a short announcement to disclose information which is or may be inside information (and for the purpose of avoiding a suspension). This could be followed, at the soonest practicable opportunity thereafter, with a detailed announcement giving all information required by the GEM Listing Rules.

          • 9.04

            Under rule 9.01, the Exchange may direct a trading halt or suspend dealings in an issuer's securities regardless of whether or not the issuer has requested the same and may do so in any circumstances, including:—

            (1) where the issuer goes into receivership or liquidation; or
            (2) where the Exchange considers there are insufficient securities in the hands of the public (see rule 11.23); or
            (3) where the Exchange considers that the issuer does not carry on a business as required under rule 17.26; or
            (4) where the Exchange considers that the issuer or its business is no longer suitable for listing; or
            (5) [Repealed 1 August 2018]
            (6) where the integrity and reputation of the market has been or may be impaired by dealings in the issuer's securities; or
            (7) where there are unexplained unusual movements in the price or trading volume of the issuer's listed securities or where a false market for the trading of the issuer's securities has or may have developed and the issuer's authorised representative cannot immediately be contacted to confirm that the issuer is not aware of any matter or development that is or may be relevant to the unusual price movement or trading volume of such securities or the development of a false market, or where the issuer delays in issuing an announcement in the form required under rule 17.11; or
            (8) where there is uneven dissemination or leakage of inside information in the market giving rise to an unusual movement in the price or trading volume of the issuer's listed securities.

            Notes:
            1 The Exchange will not hesitate to direct a trading halt or suspend dealings where it considers that improper use is being made of inside information, whether by core connected persons of the issuer or otherwise. It may require a detailed explanation from an issuer as to who may have had access to unpublished information, and why security had not been properly maintained. If it considers the result of its enquiries justify, it may publish its findings. It places great importance on the responsibility of the directors of an issuer to ensure not only proper security with regard to inside information, but also that relevant information is disclosed in a proper and equitable manner, in the interests of the market as a whole, and not to the benefit of a selected group or individual.
            2 Where the Exchange believes that an issuer or its advisers have permitted inside information regarding the issue of new securities to leak before its announcement, it will not normally consider an application for the listing of those securities.
            3 Under the Statutory Rules, the Exchange will notify the Commission of trading halts, suspensions and restorations of dealings. In addition, the Exchange will halt or suspend dealings if the Commission directs under the Statutory Rules.

          • 9.05

            The Exchange retains a discretion to allow the trading halt or suspension of dealings in an issuer's securities in appropriate circumstances which may, on a case by case basis, include the following:—

            (1) where, for a reason acceptable to the Exchange, inside information cannot at that time be disclosed; or
            (2) where an issuer is subject to an offer, but only where terms have been agreed in principle and require discussion with and agreement by one or more major shareholders. Trading halts or suspensions will only normally be appropriate where no previous announcement has been made. In other cases, either the details of the offer should be announced, or if this is not yet possible, a "warning" announcement indicating that the issuer is in discussion which could lead to an offer, should be issued, without recourse to a trading halt or a suspension; or
            (3) where necessary to maintain an orderly market; or
            (4) in respect of certain levels of notifiable or connected transaction, for example, one involving substantial changes in the nature, control or structure of an issuer, where publication of full details is necessary to permit a realistic valuation to be made of the securities concerned.

          • Procedure

            • 9.06

              If the issuer believes that a trading halt or suspension cannot, in all of the circumstances, be avoided it should contact the Exchange at the earliest practicable opportunity.

              Notes:

              1 Any request for a trading halt or suspension of dealings should be directed by telephone to the Listing Division in accordance with rule 2.22. It will only be considered when it is received directly from the issuer's authorised representative, some other responsible officer, Compliance Adviser, financial adviser, or legal adviser. Confirmation may be requested as to the authority of the person requesting the trading halt or the suspension. A formal letter supporting the request will be required, although, if the circumstances are exceptionally urgent, this need not be delivered to the Listing Division at the time of the initial request.
              2 Reason(s) for the trading halt or suspension must be given in support of the request and the issuer will be expected to explain why an announcement cannot be or could not have been issued to avoid the trading halt or the suspension.
              3 A request for a trading halt or suspension of dealings (or continued trading halt or suspension of dealings) following the publication of an announcement based solely on a wish that the information should be allowed time to disseminate more widely will not be accepted by the Exchange.

            • 9.07

              An issuer must endeavour to ensure that any request for suspension is, so far as is reasonably practicable, made outside Exchange trading hours (and as early as is practicable before commencement of the next half-day trading session on GEM). Only in exceptional circumstances should a request be made during a trading session.

            • 9.08

              Where dealings have been halted or suspended, the issuer must announce the reason(s) for the trading halt or suspension and, where halted or suspended at the request of the issuer, the known or anticipated timing of the lifting of the trading halt or suspension, having regard to the matters set out in rule 9.11.

        • Resumption

          • 9.09

            In the interests of a fair and continuous market, the Exchange requires any period of trading halt or suspension to be kept as short as reasonably practicable. In this regard, the issuer must use its reasonable endeavours to obtain all relevant consents (including regulatory consents) necessary to ensure the lifting of such trading halt or suspension.

            Note: The Exchange considers that the continuation of any trading halt or suspension beyond such period as is absolutely necessary denies reasonable access to the market and prevents its proper functioning.

          • 9.10

            The procedure for lifting the trading halt or suspension will depend on the circumstances and the Exchange reserves the right to impose such conditions as it considers appropriate.

          • 9.11

            In the case of a trading halt or suspension pending an announcement of any matter which is or may be inside information, the issuer shall use its reasonable endeavours to issue the announcement before commencement of the next half-day trading session on GEM. If it is not possible, for whatever reason, to issue the announcement within this time scale, the issuer shall, if requested to do so by the Exchange:—

            (1) issue a "holding" announcement on the Exchange’s website, before commencement of the next half-day trading session on GEM; and
            (2) request a resumption of dealings in its securities with effect from commencement of the next half-day trading session on GEM.

            Notes:
            1   Any holding announcement required for the purpose of this rule should be in substantially the following form:—

            "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.

            The directors of [ ] are aware that there remains outstanding information relating to the Company which is or may be inside information and which it is not practicable to publish at this time.

            An announcement concerning this information will be made in due course, at the soonest practicable opportunity.

            As required under the GEM Listing Rules, the Company has requested the resumption of dealings in its securities with effect from [ ]"

            In the meantime, investors are advised to exercise caution when dealing in the securities of the Company.

            Made by order of the Board of [ ], the directors of which collectively and individually accept responsibility for the accuracy of this announcement."
            2   A holding announcement of the type under Note 1 must be published in accordance with Chapter 16.

          • 9.12

            Under rule 9.01, the Exchange may direct the resumption of dealings in securities. In particular, the Exchange may:—

            (1) without prejudice to rule 9.11, require an issuer to publish an announcement, in such terms and within such period as the Exchange shall, in its discretion, direct, notifying the resumption of dealings in the issuer's securities, following the publication of which the Exchange may direct the resumption of dealings; and/or
            (2) direct a resumption of dealings following the publication of an announcement by the Exchange notifying the resumption of dealings in the securities.

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

          • 9.13

            The power conferred upon the Exchange by rule 9.12 shall be subject to the review process set out in rule 4.06. The burden shall be on the issuer opposing the resumption to demonstrate that a continued trading halt or suspension would be appropriate.

        • Cancellation of listing

          • 9.14

            Pursuant to rule 9.01, the Exchange may cancel the listing of an issuer at any time and may do so in any circumstance including (but not limited to) those set out in rule 9.04 and in circumstances where the securities of an issuer have been continuously suspended for a prolonged period without the issuer taking adequate action to obtain a restoration of the listing.

          • 9.14A

            (1) Without prejudice to its power under rule 9.14, the Exchange may cancel the listing of any securities that have been suspended from dealings for a continuous period of 12 months.
            (2) As a transitional arrangement,
            (a) Subject to (b), for an issuer whose securities have been suspended from dealings as at the effective date of rule 9.14A(1) (the "Effective Date"), the 12 month period referred to in rule 9.14A(1) commences from the Effective Date.
            (b) For issuers which are subject to a decision to commence the procedures to cancel a listing and a notice period for delisting immediately before the Effective Date, such decision and notice period continue to have effect on the relevant issuer. This is notwithstanding that the actual cancellation of listing has not taken place as at the Effective Date.

          • 9.15

            Without prejudice to rules 9.14 and 9.14A(1), in circumstances where the Exchange proposes to exercise its right to cancel a listing, it may:

            (1) publish an announcement naming the issuer and specifying the period (ordinarily, of 6 months) within which the issuer must have remedied those matters which have given rise to such circumstances. Where appropriate the Exchange will suspend dealings in the issuer's securities. If the issuer fails to remedy those matters within the specified period, the Exchange will cancel the listing. The Exchange may treat any proposals to remedy those matters as if they were an application for listing from a new applicant for all purposes and, in which case, the issuer must comply with the requirements for new listing applications as set out in the GEM Listing Rules; or
            (2) cancel the listing of the issuers' securities following the Exchange's publication of an announcement notifying the cancellation of the listing.

          • 9.15A

            For the purpose of rule 9.14A(1), the Exchange may cancel the listing of an issuer's securities following the Exchange's publication of an announcement notifying the cancellation of the listing.

          • 9.16

            On the expiry of any period specified for the purposes of rule 9.15, the Exchange may give notice to cancel the listing with immediate effect or, where the issuer has responded with proposals satisfactory to the Exchange, may, without prejudice to rule 9.14, exercise its discretion to extend the period within which the issuer will be expected to have remedied those matters that gave rise to the Exchange's proposal to cancel the listing.

          • 9.17

            The issuer must publish an announcement on receiving notice from the Exchange pursuant to rule 9.15 to 9.16 and a further announcement on the expiry of any period specified for the purposes of those rules, in each case providing details of the Exchange's decision or requirements and the consequences to holders of the issuer's securities.

          • 9.18

            Any proposals to remedy matters pursuant to rules 9.15 to 9.16 may, at the discretion of the Exchange, result in the issuer being treated, for all purposes, as a new applicant for listing.

        • Withdrawal of listing

          • 9.19

            Subject to rule 9.23, an issuer that has an alternative listing on another regulated, regularly operating, open stock exchange or securities market recognised for this purposes by the Exchange, may not voluntarily withdraw its listing on GEM unless:—

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

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

          • 9.20

            Subject to rule 9.23, if the issuer has no such alternative listing, the issuer may not voluntarily withdraw its listing on GEM without the permission of the Exchange unless:—

            (1) the issuer has obtained the prior approval of its shareholders and holders of any other class of listed securities, if applicable, at a duly convened meeting of shareholders and a separate meeting of holders of any other class of listed securities, if applicable, at which any controlling shareholders and their respective associates shall abstain from voting in favour. Where there are no controlling shareholders, directors (excluding independent non-executive directors) and the chief executive of the issuer and their respective associates shall abstain from voting in favour. The issuer must disclose the information required under rule 2.28 in the circular to shareholders;
            (2) the approval of withdrawal of the listing referred to in rule 9.20(1) must be given by at least 75% of the votes attaching to any class of listed securities held by holders voting either in person or by proxy at the meeting. For the purpose of determining the percentage, the listed securities held by directors, the chief executive and any controlling shareholders or their respective associates that vote against the resolution at the meeting are to be included;
            (3) the number of votes cast against the resolution is not more than 10% of the votes attaching to any class of listed securities held by holders permitted under rule 9.20(1) to vote in person or by proxy at the meeting. For the purpose of determining the percentage, the listed securities held by directors, the chief executive and any controlling shareholders or their respective associates that vote against the resolution at the meeting are to be included; and
            (4) the shareholders and holders of any other class of listed securities, if applicable, other than the directors (excluding independent non-executive directors), chief executive and controlling shareholders, are offered a reasonable cash alternative or other reasonable alternative.

          • 9.21

            In relation to any withdrawal of listing under rule 9.20, the Exchange reserves the right to require the following parties to abstain from voting in favour of the relevant resolution at the meeting:

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

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

          • 9.23

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

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

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

        • Transfer of listing

          • 9.24

            (1) An issuer with equity securities listed on GEM, which satisfies the requirements as set out in Main Board Listing Rule 9A.02, may apply for a transfer of its listing from GEM to the Main Board. The relevant provisions are set out in Chapter 9A of the Main Board Listing Rules.
            (2) Transfer of listing to the Main Board from GEM is not regarded as a withdrawal of listing from the Exchange and rules 9.19 to 9.23 are not applicable to such transfer.

          • 9.25

            An application for a transfer of listing shall be submitted to the Listing Division which may reject it or recommend it for final approval by the Main Board Listing Committee as provided in the Main Board Listing Rules.

          • 9.26

            As soon as reasonably practicable and in any event by the same day an application is submitted to the Exchange for a transfer of listing from GEM to the Main Board, the issuer shall announce the relevant facts to inform the market.

    • 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” (as defined in Note 2 of rule 10.12(4)) of the overall coordinator(s), any syndicate member(s) (other than the overall coordinator(s)) or any distributor(s) (other than syndicate member(s));
             
            (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.
             
            (1B) The overall coordinator(s) must make adequate distribution facilities available, must run the application list and must determine a fair basis for allocating securities when an issue is oversubscribed. 
             
            (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 overall coordinator(s), syndicate member(s) (other than the overall coordinator(s)), and/or any distributor(s) (other than the syndicate member(s)) and any connected clients of any of the foregoing parties (as defined in Note 2 below);
             
            (h)    customers or clients of the issuer;
             
            (i)    suppliers to the issuer; and
             
            (j)    he 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.
             
            (4A) No overall coordinator, syndicate member (other than an overall coordinator) or distributor (other than a syndicate member) may, under normal circumstances, retain any material amount of the securities being placed for its own account.
             
            (5) Dealings in the securities cannot commence until the Exchange has been supplied with and approved a list setting out for all the placees, the required information, including without limitation, the names, addresses and identity cards (or if none, passport numbers and the jurisdiction of issuance) (in the case of individuals) and the names, addresses, jurisdiction of incorporation and the relevant company identification numbers (in the case of companies), the names, addresses and identity cards (or if none, passport numbers and the jurisdiction of issuance) 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: (a) each overall coordinator; (b) each syndicate member (other than an overall coordinator); (c) any distributor (other than a syndicate member); and (d) 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) Each overall coordinator, syndicate member (other than an overall coordinator), distributor (other than a syndicate member) and Exchange Participant referred to in sub-paragraph (6) above must keep a record of their placees for at least 3 years following completion of the placing. This record should contain the information referred to in sub-paragraph (5) above.
             
            Note: For the purpose of rule 10.12, references to “securities” and “shares” shall include equity securities.
             

          • 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.

          • 10.16A

            For a placing of equity securities referred to in rule 6A.39, the issuer must ensure a bookbuilding process is carried out to assess demand for the equity securities.

          • 10.16B

            An issuer should document the rationale behind its decision on allocation and pricing, in particular where the decision is contrary to the advice, recommendation(s) and/or guidance of the overall coordinator(s). The overall coordinator(s) shall inform the Exchange if decisions made by the issuer amount to non-compliance with the GEM Listing Rules related to, among other things, the placing activities conducted by the overall coordinator(s) or the issuer.

        • 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]

            [Repealed 3 July 2018]

          • 10.38 [Repealed]

            [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]

            [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 the place where it is incorporated or otherwise established 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 must demonstrate how the domestic laws, rules and regulations to which it is subject and its constitutional documents, in combination, provide the shareholder protection standards set out in Appendix 3. In addition PRC issuers must also comply with Part C of Appendix 11.

          • 11.05A

            Each of the statutory securities regulator of an issuer’s jurisdiction of incorporation and the statutory securities regulator of the place of central management and control must be a full signatory to the IOSCO MMOU. This is to enable the Commission to seek regulatory assistance and information from overseas statutory securities regulators to facilitate the Commission’s investigations and enforcement actions where an issuer has its records, business operations, assets and management outside Hong Kong.

          • 11.05B

            The Exchange may waive rule 11.05A in an individual case only with the Commission’s explicit consent having regard to whether there are adequate arrangements to enable the Commission to access financial and operational information (such as books and records) on an issuer’s business in the relevant place of incorporation and place of central management and control for its investigation and enforcement purposes.

          • 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 (11.20-11.22)

            • 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]

        • Conditions relevant to the securities for which listing is sought

          • 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.

          • 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 and/or overall coordinators, the replacement or remaining Sponsor, as the case may be, must submit to the Exchange why the outgoing Sponsor and/or overall coordinator left; a copy of the clearance letter (if any) from the outgoing Sponsor and/or overall coordinator; 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 and/or overall coordinator 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 Exchange’s website under rule 16.01A;
               
              (b)   a Post Hearing Information Pack published on the Exchange’s website under rule 16.01B;
               
              (bb)   an OC Announcement published on the Exchange’s website under rule 16.01C;
               
              (c)   any statement by a new applicant published on the Exchange’s website stating that no reliance should be placed on any media reports about the new applicant subsequent to the publication of its Application Proof, OC Announcement or 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.
               
              Note:    The Exchange may consider an application for a waiver from strict compliance with rule 12.11 for issuers with, or seeking, a dual listing, subject to the following conditions:‒
               
                (a)    the core connected persons have no influence over the listing process and are not in possession of inside information;
               
                (b)    the issuer promptly releases any inside information to the public in its overseas jurisdiction(s) in accordance with the relevant laws and regulations;
               
                (c)    it is beyond the issuer’s control that the core connected person(s) conduct dealings in the issuer’s securities on markets outside the Exchange (e.g. a public investor who may become a substantial shareholder before the issuer lists on GEM); and
               
                (d)    the issuer has systems in place to identify the dealings by any of its core connected persons during the restricted period and notifies the Exchange of breaches of dealing restriction by any of its core connected persons other than those who have al been exempted from strict compliance with rule 12.11 during the restricted period.
               

          • 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 (i) conform with the relevant parts of Appendix 3 and (for overseas issuers) the related guidance materials, and (where applicable) Appendix 11, and (ii) 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) where applicable, 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]
              At least 4 clear business days before the expected hearing date

          • 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.

            • 12.23AA

              In case of a placing involving bookbuilding activities (as defined under the Code of Conduct) in connection with a New Listing, a written confirmation from the overall coordinator appointed and, where applicable, designated in accordance with rule 6A.42, providing:
               
              (i) the name of each overall coordinator;
               
              (ii) the fixed fees to be paid by the issuer to each overall coordinator;
               
              (iii) the total fees (as a percentage of the gross proceeds to be raised from the New Listing) in respect of both the public subscription and the placing tranches to be paid to all syndicate CMIs; and
               
              (iv) the ratio of fixed and discretionary fees to be paid to all syndicate CMIs for both the public subscription and the placing tranches (in percentage terms).
               
              Notes:
               
              1. The total fees in this rule, also commonly referred to as “underwriting fees”, include fixed and discretionary fees for providing one or more of the following services to the issuer: providing advice, marketing, bookbuilding, making pricing and allocation recommendations and placing the equity securities with the investors.
               
              2. The overall coordinator must submit to the Exchange any material changes to the information submitted under this rule and the reasons for such changes as soon as practicable.
               

          • 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 Exchange’s 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 involving bookbuilding activities (as defined under the Code of Conduct) in connection with a New Listing by a new applicant:—
              (a) a copy of the placing letter and separate marketing statements in Appendix 5D signed by (i) each overall coordinator; (ii) each syndicate member (other than an overall coordinator); (iii) any distributor (other than a syndicate member); and (iv) any Exchange Participant referred to in that Appendix; and
              (b) a placee list from each of the relevant parties mentioned in sub-paragraph (a) above, setting out the required information in rule 10.12(5);
              (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 completed and signed by each Sponsor and overall coordinator; 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).

            • 12.26AA

              Where a new applicant, Sponsor or overall coordinator (as the case may be), subsequently becomes aware of any material changes to the information provided to the Exchange under rules 12.12 to 12.26, it should notify the Exchange and provide it with the updated information and the reasons for such changes as soon as practicable.

        • 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 equity 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: (i) each overall coordinator; (ii) each syndicate member (other than an overall coordinator); (iii) any distributor (other than a syndicate member); and (iv) any Exchange Participant referred to in that Appendix; and
              (b) a placee list from each relevant party mentioned in sub-paragraph (a) above, setting out the required information in rule 10.12(5). Such lists may be supplied directly to the Exchange by each relevant party mentioned in sub-paragraph (a) above 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 Exchange’s 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, where applicable, the application channel) 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 channel shall include a warning as follows:—
             
              "Warning:—
             
              Only one application may be made for the benefit of any person."
             
              and the application channel shall include 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 channel 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.
             
              Note:    The Exchange may consider an application for a waiver from the disclosure requirement of the issue price or offer price under rule 14.08 and paragraph 15(3)(c) of Appendix 1A for issuers with, or seeking, a dual listing, subject to the conditions that:‒
             
                (a)    the Commission grants a certificate of exemption from strict compliance with the relevant requirements of the Companies (Winding Up and Miscellaneous Provisions) Ordinance;
             
                (b)    the listing document discloses (i) the maximum offer price (also in the application forms); (ii) when the final offer price will be determined and how it will be published; (iii) the issuer’s historical share prices during the trading record period and up to the latest practicable date; (iv) trading liquidity; (v) the determinants of the final offer price; and
             
                (c)    investors will be able to access the latest market price of the issuer’s shares.
             

          • 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 Exchange’s 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 Exchange’s website in accordance with rule 16.17 and Practice Note 5.

          • 16.01C

            In the case of a new applicant effecting a placing involving bookbuilding activities (as defined under the Code of Conduct) in connection with a New Listing, a new applicant must publish an OC Announcement on the Exchange’s website in accordance with rules 16.17 to 16.19 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.

            Note:  This rule does not apply to documents to be published on the Exchange’s website and the issuer’s own website pursuant to rule 7.18, rule 8.01B(1)(b), rule 8.02B(2)(b), rule 23.02(2), rule 24.09(2), rule 24.09(3), rule 24.09(5)(a) and (e), rule 24.09(6), rule 25.20(4), rule 25.37, rule 32.05(3), rule 35.10, rule 35.11, paragraph 52 of Part A of Appendix 1, paragraph 42 of Part B of Appendix 1, paragraph 53 of Part C of Appendix 1 and paragraph 9(b)(i) of Appendix 4.
             

        • 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 Exchange’s 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 Exchange’s 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 Exchange’s 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 Exchange’s website;
            (c) the address of each of the issuer's website and the Exchange’s website, the place on the website where the electronic form prospectus may be accessed and how that prospectus may be accessed;
            (d) that throughout the offer period, copies of the printed form prospectus will be available for collection at specified locations, free of charge, upon request by any member of the public;
            (e) the particulars of the specified locations; and

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

          • 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 Exchange’s 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 Exchange’s 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 Exchange’s 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 Exchange’s 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 all syndicate CMIs and, if applicable, any other syndicate member(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 Exchange’s 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: The announcement should include:

            1 information regarding the spread of applications and basis of allocation;
            2 in case of a new class of securities to be listed, the minimum prescribed percentage applicable to that class of securities pursuant to rule 11.23 if such information has not been previously disclosed; and
            3 in the case of a new applicant effecting a placing involving bookbuilding activities (as defined under the Code of Conduct) in connection with a New Listing, a confirmation from its directors that, to the best of their knowledge, no rebate has been, directly or indirectly, provided by the issuer, its controlling shareholder(s), directors or syndicate members to any placees or the public (as the case may be) and the consideration payable by them for each share (or, where applicable, each unit of other equity securities) of the issuer subscribed for or purchased by them is the same as the final offer price determined by the issuer, in addition to any brokerage, FRC transaction levy, SFC transaction levy and trading fee payable.

          • 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 Exchange’s 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 Exchange’s 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 Exchange’s 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 Exchange’s 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 Exchange’s website. The cleared version must be submitted in sufficient time so as to enable it to be published on the Exchange’s 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 Exchange’s 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 Exchange’s 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 Exchange’s website and the issuer's own website giving details as to where on these websites it is to be found (to the fullest extent known at the time of publication of the announcement or notice).
             
              (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 Exchange’s 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 Exchange’s 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 Exchange’s 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 Exchange’s website must be virus-free with all words being text-searchable and the document printable. The layout and contents of each page on the electronic copy of the documents submitted to the Exchange for publication on the Exchange’s website must be the same as the layout and contents of the corresponding page of the document as published by the issuer (whether in the newspapers, on its own website, as sent to shareholders or otherwise).
             
            (2) When submitting a document through HKEx-EPS for publication on the Exchange’s website, the issuer must select all such headlines as may be appropriate from the list of headlines set out in Appendix 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 Exchange’s website:
             
              between 8:30 a.m. and 12:00 noon and between 12:30 p.m. and 4:30 p.m. on a normal business day; and
             
              between 8:30 a.m. and 12:30 p.m. on the eves of Christmas, New Year and the Lunar New Year when there is no afternoon session,
             
              except for:
             
              (i) [Repealed 10 March 2008];
             
              (ii) announcements made solely under rule 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).
             
            Note:   The Exchange may consider an application for a waiver from strict compliance with rule 16.18(3)(a) for issuers with, or seeking, a dual listing, subject to the conditions that:‒
             
              (a)    the issuer discloses in the listing document a clear indication of the impact of the waiver on potential investors;
             
              (b)    the issuer shall inform the Exchange, in the first instance, in the event of any material change being made to the overseas regime on the disclosure of inside/ price sensitive information;
             
              (c)    there is a minimal overlap between Hong Kong market hours and that of the overseas exchange(s) on which the issuer’s securities are also traded;
             
              (d)    the issuer notifies the Exchange of a pending announcement and the expected time of release (of both English and Chinese versions) at least ten minutes before the release; and
             
              (e)    the announcement shall be in relation to inside/ price sensitive information and the issuer is required, for reasons not within its control, under the overseas regime to publish such announcement within the period prohibited under rule 16.18(3)(a).
             
              (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 Exchange’s 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 Exchange’s 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 Exchange’s website and accepts no responsibility for any delay or failure in publication. It is the sole responsibility of the issuer to ensure that all material submitted by it or on its behalf for publication on the Exchange’s website is accurate.

          • 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 Exchange’s website. The publication should be at the same time as publication of the electronic copy of the document on the Exchange’s website. A new applicant is not required to publish an Application Proof, OC Announcement 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 Exchange’s website, publication on the issuer's own website must not be later than 8:30 a.m. on the business day next following such publication; and
            (b) where the electronic copy of the document is published at any other time on the Exchange’s website, publication on the issuer's own website must not be later than 1 hour after such publication.

            Note: The issuer's website does not need to be hosted on a domain owned or maintained by the issuer. The issuer's website may be hosted on a third-party domain so long as the website is assigned a dedicated location on the Worldwide Web and the issuer's website may be managed by 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 Exchange’s website will remain on the "Latest Listed 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 – 17.27C)

            • 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 Exchange’s website a return in such form and containing such information as the Exchange may from time to time prescribe by not later than 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session on the business day next following the relevant event.
              (2) The events referred to in rule 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 Exchange’s website a monthly return in relation to movements in the listed issuer's equity securities, debt securities and any other securitised instruments, as applicable, during the period to which the monthly return relates, in such form and containing such information as the Exchange may from time to time prescribe (irrespective of whether there has been any change in the information provided in its previous monthly return). Such information includes, among other things, the number as at the close of such period of equity securities, debt securities and any other securitised instruments, as applicable, issued and which may be issued pursuant to options, warrants, convertible securities or any other agreements or arrangements.

            • 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, reverse takeover or extreme transaction pursuant to rules 19.06(3), 19.06(5), 19.06B and 19.06C 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(s) of the syndicate member(s), 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 Exchange’s 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 must give its shareholders the opportunity to lodge a notice with it proposing a person for election as a director at a general meeting. An issuer shall publish an announcement or issue a supplementary circular upon receipt of any such notice from a shareholder 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. The issuer must give shareholders at least seven days to consider the relevant information disclosed in such an announcement or supplementary circular prior to the date of the meeting of the election.
               
              Note:    The issuer must assess whether or not it is necessary to adjourn the meeting of the election to give shareholders a longer period of at least 10 business days to consider the relevant information disclosed in the announcement or supplementary circular.
               

          • 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.
               
              (5A) The issuer must state in the poll results announcement directors’ attendance 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

              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 subject to the following exceptions:
               
              (1)   the giving of any security or indemnity either:—
               
                (a)   to the director or his close associate(s) in respect of money lent or obligations incurred or undertaken by him or any of them at the request of or for the benefit of the issuer or any of its subsidiaries; or
               
                (b) to a third party in respect of a debt or obligation of the issuer or any of its subsidiaries for which the director or his close associate(s) has himself/ themselves assumed responsibility in whole or in part and whether alone or jointly under a guarantee or indemnity or by the giving of security;
               
              (2)   any proposal concerning an offer of shares or debentures or other securities of or by the issuer or any other company which the issuer may promote or be interested in for subscription or purchase where the director or his close associate(s) is/are or is/are to be interested as a participant in the underwriting or sub-underwriting of the offer;
               
              (3)   any proposal or arrangement concerning the benefit of employees of the issuer or its subsidiaries including:—
               
                (a) the adoption, modification or operation of any employees' share scheme or any share incentive or share option scheme under which the director or his close associate(s) may benefit; or
               
                (b) the adoption, modification or operation of a pension fund or retirement, death or disability benefits scheme which relates to the director, his close associate(s) and employee(s) of the issuer or any of its subsidiaries and does not provide in respect of any director, or his close associate(s), as such any privilege or advantage not generally accorded to the class of persons to which such scheme or fund relates; and
               
              (4)   any contract or arrangement in which the director or his close associate(s) is/are interested in the same manner as other holders of shares or debentures or other securities of the issuer by virtue only of his/their interest in shares or debentures or other securities of the issuer.
               
                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 to 17.49C)

            • 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 or an adverse 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