Chapter 13

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Question:

Should an issuer specify in its announcement relating to dividend payment whether such dividend is ordinary or special in nature? How should an issuer determine whether the declaration is ordinary dividend or special dividend?

Answer:

An issuer is required to announce any decision to declare, recommend or pay any dividend after approval by the board of directors. It would be desirable for an issuer to specify in the announcement whether the dividend is intended to be ordinary or special in nature because:

•      the nature of dividend is relevant for shareholders to understand whether the dividend is a regular payment in accordance with the issuer’s dividend policy or it is a non-recurrent distribution in response to a special event; and
•      classification of dividend as ordinary versus special will have a direct impact on pricing of derivative products as the terms of derivative products would require adjustments where the dividend is special in nature. A clear message on the dividend nature will help avoid market confusion in the derivative markets where derivative products (e.g. structured products, futures and/or options, etc.) are issued with the issuer’s shares as underlying stock.

It is the issuer’s sole discretion to determine whether a dividend is ordinary or special in nature, subject to any provisions, if any, set out in its memorandum and articles of association or the laws or regulations of the place in which it is incorporated. An issuer should also seek its own legal advice on the matter where appropriate.

In general, special dividend is a non-recurring distribution of corporate earnings and is often tied to specific events. In past cases, we note that some issuers paid special dividends to:

•      return surplus cash to shareholders;
•      distribute proceeds from disposal of assets or divestment of business; or
•      reduce capital.

The above list is not exhaustive. An issuer may decide to declare special dividends based on its own circumstances.

FAQ No. 071-2020
LR reference: Main Board Rules 13.45(1) / GEM Rules 17.49(1)
Released on 17/04/2020

Question:

Included in the Headline Categories are:

Clarification of News or Reports — Standard or Super,
Clarification of News or Reports — Qualified
Unusual Price/Turnover Movements — Standard or Super
Unusual Price/Turnover Movements — Qualified

What does "standard", "super" and "qualified" mean?

Answer:

1. "Standard" announcements are: 
(a) announcements made at the request of the HKEx under Listing Rules MB 13.10(2) / GEM 17.11(2) in response to unusual movements in price or trading volume or the possible development of a false market in its securities, and in the announcement the issuer only provides negative confirmations required under Listing Rules MB 13.10(2) / GEM 17.11(2). The wording of these announcements should follow Note 1 to Listing Rules MB 13.10(2) / GEM 17.11(2); and
(b) announcements made in response to media news and reports, announcements made to deny media news or reports, i.e. straight denial.

For example, an issuer issues a denial in response to news articles simply stating that the rumour is untrue and has no substance. There would be no other information in the announcement.
2. "Super" announcements are announcements which are similar to the standard announcements except for modifications made:
(a) announcements made at the request of the HKEx under Listing Rules MB 13.10 / GEM 17.11 in response to unusual movements in price or trading volume or the possible development of a false market in its securities, and in the announcement the issuer only refers to its previously published information; and
(b) announcements made in response to media news and reports, where the issuer clarifies that only its previously published information should be relied on.

For example, an issuer issues a denial in response to certain news articles on a transaction or material business development. The issuer denies the content of the articles and states that there is no material development and refers to previously published information such as a circular or announcement of the issuer.
3. "Qualified" announcements are:
(a) announcements made at the request of the HKEx under Listing Rules MB 13.10(1) / GEM 17.11(1) in response to unusual movements in price or trading volume, disclosing information under the issuer's general disclosure obligation to which such movements are or may be attributable. These announcements may also, in certain circumstances, be issued pursuant to both Listing Rules MB 13.10(1) / GEM 17.11(1) and Listing Rules MB 13.09 / GEM 17.10 where they contain information necessary to avoid a false market or inside information which needs to be disclosed under the Inside Information Provisions; and
(b) announcements made in response to media news and reports, where the information underlying the media news or report is inside information, indicating that the media news or reports is largely accurate and requiring disclosure under Listing Rules MB 13.09 / GEM 17.10.

FAQ Series 3, FAQ No. 31
LR reference: Main Board Rules 13.09, 13.10 / GEM Rules 17.10, 17.11
Released on 22/3/2007 (Updated on 2/1/2013)

Question:

What are the procedures issuers should follow prior to the morning pre-opening trading session or the afternoon trading session in reviewing the publication status of its announcement and considering whether notifying the HKEx that a trading suspension may be required?

Answer:

The assessment of whether a trading halt or suspension will be required is based on the trading halt or suspension policy having regard to the two factors: nature of announcement and publication of the announcement on the HKEx website.

Trading halt or suspension arising from publication failures will be required where the subject matter of the announcement is information necessary to avoid a false market in the issuer's securities or is inside information which needs to be disclosed under the Inside Information Provisions (Listing Rules MB 13.09 / GEM 17.10) or relates to a notifiable transaction and a trading halt or suspension is required under Listing Rules MB 14.37 / GEM 19.37. For pre-vetted announcements, this determination will be agreed with the Listing Division of the HKEx before clearance of the announcement. For post-vetted announcement, the issuer will make the assessment. In either case this assessment should be also generally reflected in the headline categories selected by the issuers.

An issuer should take reasonable steps to gain comfort that publication of its announcement on the HKEx website has been successful. Such steps may include noting receipt of e-mail confirmation from HKEx and checking the HKEx website directly.

Where, for whatever reason the publication of the announcement on the HKEx website is delayed (by reference to the trading halt or suspension policy above), the issuer should contact the Listing Division of the HKEx immediately and where appropriate, request a trading halt or suspension.

FAQ Series 3, FAQ No. 144
LR reference: Main Board Rules 13.09, 13.10A, 14.37 / GEM Rules 17.10, 17.11A, 19.37
Released on 22/3/2007 (Updated on 2/1/2013)

Question:

What is the trading halt/ suspension policy applicable to Main Board and GEM issuers in respect of publication of announcements containing inside information and/or notifiable transactions?

Answer:

Trading in the securities of an issuer may be halted or suspended due to publication failure (i.e. to publish an announcement on HKEx websites) where the subject matter of the announcement is information discloseable under Listing Rules MB 13.09/ GEM 17.10 or relates to a notifiable transaction and trading halt or suspension is required under Listing Rules MB 14.37/ GEM 19.37. This is consistent with the principle set out in Chapter 6 of Main Board Rules/ Chapter 9 of GEM Rules on trading halts and suspensions, i.e. that halt or suspension is only required where the HKEx considers it necessary for the protection of the investor or the maintenance of an orderly market.

Where an obligation to issue an announcement containing inside information has arisen for an issuer, it should publish the announcement during the next available publication window. For example, where the issuer has signed an agreement in relation to a notifiable transaction that is inside information after trading hours on a normal business day, and an announcement is published on the HKEx website by 8.30 a.m. of the next business day (i.e. either during the publication windows from 4.30 p.m. to 11.00 p.m. of that business day, or between 6.00 a.m. to 8.30 a.m. of the next business day), no trading halt or suspension would be necessary. Similarly, where an agreement is signed after the morning trading session and an announcement is published on the HKEx website between 12.00 noon to 12.30 p.m. of the same business day, no trading halt or suspension is necessary. In both circumstances where an announcement cannot be published before the next trading session, a halt or suspension in the trading of the issuer's securities would be required until commencement of the trading session (morning or afternoon) after the publication of the announcement. For example, where the announcement is published during the 12.00 noon to 12.30 p.m. publication window of the next business day, the issuer may apply for resumption of trading in its securities at 1.00 p.m.

Where an issuer's obligation to publish an announcement relating to inside information is triggered during trading hours (for example, where confidentiality cannot be maintained and an obligation to publish an announcement on inside information arises under Listing Rule MB 13.09/ GEM 17.10 or in the circumstances described in Listing Rules MB 14.37 / GEM 19.37), the issuer should request a halt or suspension in trading of its securities, and publish an announcement as soon as possible during the next publication window. Resumption in trading of the issuer's securities may take place during the commencement of the next trading session after the publication of the announcement.

A resumption announcement should clearly set out that an application will be made for resumption in the trading of securities and the expected time of resumption (i.e. at the commencement of the next trading session after the publication of the announcement).

Issuers are reminded of their obligations to submit an announcement for clearance by the Exchange before publication where the subject matter of the announcement requires pre-vetting under the Listing Rules. Please refer to the Guide on Pre-vetting requirements and Selection of Headline Categories for Announcements at http://www.hkex.com.hk/eng/rulesreg/listrules/guidref/guide_pre_vetting_req.htm which sets out categories of announcements requiring pre-vetting.

Issuers are also reminded that they should manage their affairs, particularly with regard to the signing of agreements, to ensure that there will be continuous and informed trading of their securities save in exceptional circumstances. It follows that, as far as practicable, issuers should seek to ensure that complex and lengthy announcements are disseminated as soon as possible during either the lunchtime publication window or outside trading hours to allow investors adequate time to consider the content of such disclosures.

FAQ Series 3, FAQ No. 178
LR reference: Main Board Rules Chapter 6, 13.09, 13.10A, 14.37 / GEM Rules Chapter 9, 17.10, 17.11A, 19.37
Released on 22/3/2007 (Updated on 25/7/2016)

Question:

What is a "false market"?

Answer:

The term "false market" refers to a situation where there is material misinformation or materially incomplete information in the market which is compromising proper price discovery. This may arise, for example, where:

(a) an issuer has made a false or misleading announcement;
(b) there is other false or misleading information, including a false rumour, circulating in the market;
(c) an issuer has inside information that needs to be disclosed under the Inside Information Provisions but it has not announced the information (e.g. the issuer signed a material contract during trading hours but has not announced the information); or
(d) a segment of the market is trading on the basis of inside information that is not available to the market as a whole.

Where a media or analyst report appears to contain information from a credible source (whether that information is accurate or not) and:

(a) there is a material change in the market price or trading volume of the issuer's securities which appears to be referrable to the report (in the sense that it is not readily explicable by any other event or circumstance); or
(b) if the market is not trading at the time but the report is of a character that when the market starts trading, it is likely to have a material effect on the market price or trading volume of the issuer's securities,
the issuer must announce information necessary to avoid a false market in its listed securities.

FAQ Series 22, FAQ No. 1
LR reference: Main Board Rules 13.09(1), 13.10, 37.47(b); Paragraph 3 of Practice Note 11; Paragraph 2(1)(b) of Appendices 7C, 7D, 7E and 7H; Paragraph 24 of Appendix 7C; Paragraph 26 of Appendix 7H / GEM Rules 17.10(1), 17.11, 30.40(b), 31.04(2) and 31.05
Released on 30/4/2013

Question:

Does an issuer need to "consult" the Exchange before announcing the information necessary to avoid a false market in its securities?

Answer:

No, it can proceed to disclose the information which requires disclosure under these provisions.

However, it must contact the Exchange as soon as reasonably practicable if it believes that there is likely to be a false market in its listed securities (see the note to these provisions).

FAQ Series 22, FAQ No. 2
LR reference: Main Board Rules 13.09(1), 37.47(b); Paragraph 2(1)(b) of Appendices 7C, 7D, 7E and 7H / GEM Rules 17.10(1), 30.40(b) and 31.04(2)
Released on 30/4/2013

Question:

Listco Z is a PRC issuer whose H shares are listed on the Main Board. It proposes to issue new A shares in the PRC and apply for a listing on a PRC stock exchange.

Listco Z will issue a prospectus in connection with the issue of A shares pursuant to the laws and regulation in the PRC and the requirements of the PRC stock exchange. In this regard, Listco Z will publish an announcement under the Main Board Rule 13.09(2)(a) / GEM Rule 17.10(2)(a) to promptly disclose information which is identified as inside information during preparation of the A share prospectus or as a consequence of other development. Will Listco Z still need to publish the A-share prospectus on the HKEx website for the purposes of the Listing Rules?

Answer:

In addition to the disclosure obligation under Main Board Rule 13.09(2)(a) / GEM Rule 17.10(2)(a), Listco Z should also comply with Main Board Rule 13.10B / GEM Rule 17.12 to release the A-share prospectus to the market in Hong Kong through the HKEx website (in the form of an "overseas regulatory announcement") at the same time as it is released in other market(s).

FAQ Series 7, FAQ No. 69
LR reference: Main Board Rules 13.09(2), 13.10B / GEM Rules 17.10(2), 17.12
Released on 28/11/2008 (Updated on 2/1/2013)

Question:

What is the meaning of the term "such enquiry with respect to the issuer as may be reasonable in the circumstances"? What sort of enquiry is an issuer required to make in response to the Exchange's enquiries?

When will an issuer be expected to contact its controlling shareholders when they are not directors or officers of the issuer?

Answer:

The facts and circumstances giving rise to each enquiry are different. Therefore, what enquiry is reasonable depends on the circumstances, and there are no hard and fast rules. The test is one of reasonableness.

To facilitate compliance, it is crucial that an issuer implements and maintains adequate and effective internal control systems and procedures to ensure material information concerning the issuer and its business would be promptly identified, assessed and escalated to the Board for consideration and action from a Rule compliance perspective. This would require a timely and structured flow to the Board of information arising from the development or occurrence of events and circumstances so that the Board can decide whether disclosure is necessary.

An issuer is generally not expected to contact (a) its controlling shareholders when they are not directors or officers of the issuer, or (b) counterparties to a transaction, except if there is information available to the issuer suggesting that the subject matter of the enquiry is related to the controlling shareholders or the counterparties to a transaction. For example, the issuer is aware of its controlling shareholder's plan to dispose of its interest in the issuer, and there is an unusual increase in the trading volume of the issuer's shares. Another example is where there are press articles suggesting that the counterparty to a disclosed transaction may not be able to complete the transaction as a result of difficulties in obtaining financing.

FAQ Series 22, FAQ No. 3
LR reference: Main Board Rules 13.10(2); Paragraph 24(2) of Appendix 7C; Paragraph 26(2) of Appendix 7H / GEM Rules 17.11(2) and 31.05(2)
Released on 30/4/2013

Question:

An issuer has inside information which is exempted from disclosure under one or more of the safe harbours in the Inside Information Provisions. If there are market rumours which are unrelated to this information, but have resulted in unusual trading movements, does the issuer need to publish a standard announcement?

If the standard announcement states that there is no inside information that needs to be disclosed under the Inside Information Provisions, but the issuer subsequently discloses the information, say a month later, will this result in market uncertainty?

Answer:

Whether an announcement is required to be issued under these provisions depends on the facts and circumstances of the matter. It is only if and when requested by the Exchange that an announcement needs to be issued.

Information that is exempted from disclosure under the Inside Information Provisions does not fall within the term "any inside information that needs to be disclosed under Part XIVA of the Securities and Futures Ordinance" contained in the standard announcement. Therefore, a standard announcement issued under those circumstances will not be inaccurate.

To avoid market uncertainty arising from the subsequent disclosure of the inside information previously exempted from disclosure, the issuer can clarify in the disclosure announcement that the information was exempted from disclosure when the standard announcement was issued.

FAQ Series 22, FAQ No. 4
LR reference: Main Board Rules 13.10(2), Paragraph 24(2) of Appendix 7C, Paragraph 26(2) of Appendix 7H / GEM Rules 17.11(2) and 31.05(2)
Released on 30/4/2013

Question:

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

Answer:

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

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

Question:

Clarify what should be included in the numerator for the calculation of the asset test of the relevant advance?

Answer:

The numerator should be the total advances (not the interest earned) plus any monetary advantage accruing to the entity or affiliated company.

FAQ Series 1, FAQ No. 22
LR reference: Main Board Rules 13.13, 13.14, 13.16 / GEM Rules 17.15, 17.16, 17.18
Released on 30/3/2004 (updated in February 2020)

Question:

When is the general disclosure obligation under Main Board Rule 13.14(GEM Rule 17.16) triggered for advances to an entity or affiliated company that have already been announced in accordance with Main Board Rule 13.13(GEM Rule 17.15)?

Answer:

Where there is any further increase in the advance previously announced in accordance with Main Board Rule 13.13 (GEM Rule 17.15), the issuer has to make a new announcement under Main Board Rule 13.14 (GEM Rule 17.16) if:

•   the increased balance has exceeded the 8% threshold for the asset ratio; and
•   the increase since the last announcement was made exceeds the 3% threshold for the asset ratio.

FAQ Series 1, FAQ No. 25
LR reference: Main Board Rules 13.13, 13.14 / GEM Rules 17.15, 17.16
Released on 30/3/2004 (updated in February 2020)

Question:

Company A's controlling shareholder deposited the share certificate of his shares in Company A to a third party, or where he uses his interest in Company A's shares, for the purpose of securing Company A's performance of an obligation.

Does any of the above scenarios constitute "pledging of shares" under the Listing Rules warranting an announcement under MB Rule 13.17 (GEM Rule 17.19)?

Answer:

Yes. MB Rule 13.17 (GEM Rule 17.19) applies to any arrangement, in any form and however the arrangement is named, where Company A's controlling shareholder effectively uses all or part of his interest in Company A's shares to, directly or indirectly, secure Company A's debts, or to secure guarantees or other support of Company A's obligations.

FAQ Series N/A, FAQ No. 029-2018
LR reference: Main Board Rules 13.17 / GEM Rules 17.19
Released on 11/5/2018

Question:

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

Answer:

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

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

Question:

Where can an issuer find the templates of the various Monthly Returns and Next Day Disclosure Returns, and how to submit them?

Answer:

Templates of the various Monthly Returns and Next Day Disclosure Returns in MS Word format can be downloaded from the ESS website. The completed form, in either PDF or MS Word format, should then be submitted via ESS as an attachment.

FAQ Series 8, FAQ No. 19
LR reference: Main Board Rules 13.25A, 13.25B / GEM Rules 17.27A, 17.27B
Released on 28/11/2008 (Updated in February 2020)

Question:

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

Answer:

Yes.

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

Question:

Can a listed issuer submit its Monthly Returns or Next Day Disclosure Returns by means other than ESS, such as email, fax or mail?

Answer:

No.

FAQ Series 8, FAQ No. 21
LR reference: Main Board Rules 13.25A, 13.25B / GEM Rules 17.27A, 17.27B
Released on 28/11/2008

Question:

The issuer publishes a Next Day Disclosure Return upon a repurchase or redemption of shares in January. The repurchased or redeemed shares are cancelled in February. Must the issuer publish a Next Day Disclosure Return upon cancellation of the shares?

Answer:

No. On a share repurchase or redemption, the issuer must submit and publish a Next Day Disclosure Return by "not later than 30 minutes before the earlier of the commencement of the morning trading session or any pre-opening session" (i.e. by 8:30 a.m.) on the business day after the repurchase or redemption, even if the shares have not yet been cancelled. It is not necessary to publish another Next Day Disclosure Return when the shares are cancelled.

However, the opening balance of the subsequent Next Day Disclosure Return will be the closing balance of the last Next Day Disclosure Return or Monthly Return (whichever is later) and any cancellation of shares since then should be included in the opening balance of the subsequent Next Day Disclosure Return as separate lines (together with the date(s) of cancellation). These cancelled shares should also be taken into account in arriving at the closing balance of that subsequent Next Day Disclosure Return.

FAQ Series 8, FAQ No. 24
LR reference: Main Board Rules 13.25A(2)(a)(vii) / GEM Rules 17.27A(2)(a)(vii)
Released on 28/11/2008 (Updated on 11/3/2011)

Question:

Is section I of the Monthly Return (Movement in Authorised Share Capital) applicable to PRC issuers which do not have authorised share capital? Are PRC issuers required to disclose movements in domestic shares/ A shares in section II of their Monthly Return (Movements in Issued Share Capital)?

Answer:

No. Section I of the Monthly Return is not applicable to PRC issuers which do not have authorised share capital.

Yes. PRC issuers are required to disclose in section II of the Monthly Return the movements in their H shares as well as any other classes of shares (e.g. domestic shares and A shares).

FAQ Series 8, FAQ No. 26
LR reference: Main Board Rules 13.25B / GEM Rules 17.27B
Released on 28/11/2008 (Updated in February 2020)

Question:

Will listed issuers still be required to submit the Monthly Returns each month even if there are no changes of the reported figures from the previous month?

Answer:

Yes.

FAQ Series 8, FAQ No. 27
LR reference: Main Board Rules 13.25B / GEM Rules 17.27B
Released on 28/11/2008

Question:

A listed issuer proposes to enter into an agreement with an independent third party under which the independent third party will provide advisory services to the issuer and the consideration will be satisfied by issuing new shares of the issuer to the third party. Is such issue subject to the disclosure requirements under Main Board Rule 13.28 / GEM Rule 17.30?

Answer:

The requirements under Main Board Rule 13.28 / GEM Rule 17.30 only apply to an issue of securities for cash.

In the circumstances described, if the proposed issue of new shares constitutes inside information which requires disclosure under the Inside Information Provisions, the listed issuer must also simultaneously announce the information under Main Board Rule 13.09(2)(a) / GEM Rule 17.10(2)(a).

FAQ Series 7, FAQ No. 70
LR reference: Main Board Rules 13.28 / GEM Rules 17.30
Released on 28/11/2008 (Updated on 2/1/2013)

Question:

A listed issuer proposes a placing of warrants, which carry rights to subscribe new shares in the listed issuer, for cash consideration under a specific mandate. The listed issuer will issue an announcement for such proposed placing pursuant to Main Board Rule 13.28 / GEM Rule 17.30. How should the listed issuer comply with the disclosure obligation under Main Board Rule 13.28 / GEM Rule 17.30?

Answer:

The disclosure obligation under Main Board Rule 13.28 / GEM Rule 17.30 arises at the time when the listed issuer agrees to issue securities for cash. As such, the listed issuer should issue an announcement as soon as it enters into the agreement for placing the warrants. The Rule does not apply upon exercise of the subscription rights of the warrants by the warrant holders. However, the listed issuer is reminded of the disclosure obligations under Main Board Rules 13.25A, 13.25B and 13.25C / GEM Rules 17.27A, 17.27B and 17.27C.

FAQ Series 8, FAQ No. 29
LR reference: Main Board Rules 13.28; see also: 13.25A, 13.25B, 13.25C / GEM Rules 17.30; see also: 17.27A, 17.27B, 17.27C
Released on 28/11/2008 (Updated in February 2020)

Question:

How should issuers whose shares have no nominal value comply with the disclosure requirements for nominal values under the Rules?

Answer:

These issuers should disclose in the relevant announcements or annual reports that their shares have no nominal value.

FAQ Series 26, FAQ No. 1
LR reference: Main Board Rules 13.28(2), App 16 (para 11(3)) / GEM Rules 17.30(2), 18.32(3)
Released on 21/2/2014

Question:

A listed issuer proposes a placing of new shares for cash consideration using its general mandate.

What "details of the general mandate" is the issuer required to disclose in the announcement under Main Board Rule 13.28(12) (GEM Rule 17.30(12))?

Answer:

It should disclose the date of the general meeting approving the general mandate; and information that demonstrates the general mandate is sufficient to cover the number of new shares to be issued under the placing, such as: (i) the number of shares that the listed issuer is authorised to allot or issue under such general mandate; and (ii) the unutilised portion of the general mandate immediately prior to the proposed placing.

FAQ Series 8, FAQ No. 30
LR reference: Main Board Rules 13.28(12) / GEM Rules 17.30(12)
Released on 28/11/2008 (Updated in February 2020)

Question:

If a listed issuer proposes to place new shares under a general mandate at a discount of 20% or more to the benchmarked price, can it satisfy Main Board Rule 13.29 (GEM Rule 17.30A) by incorporating the information required in its announcement published pursuant to Main Board Rule 13.28 (GEM Rule 17.30)?

Answer:

Yes, or alternatively it may issue a separate announcement to disclose the information required under Main Board Rule 13.28 (GEM Rule 17.30). In either case, the required information must be announced within the timeframe prescribed under Main Board Rule 13.29 (GEM Rule 17.30A).

The listed issuer is reminded that, under Main Board Rule 13.36(5) (GEM Rule 17.42B), it cannot issue new shares for cash under a general mandate at a discount of 20% or more to the benchmarked price set out in Main Board Rule 13.36(5) (GEM Rule 17.42B) unless it can satisfy the Exchange that it is in a serious financial position or there are exceptional circumstances. In the present case, the listed issuer must obtain the Exchange's consent before it enters into the proposed placing and publishes the relevant announcement.

FAQ Series 8, FAQ No. 31
LR reference: Main Board Rules 13.29 / GEM Rules 17.30A
Released on 28/11/2008

Question:

In the case of an H-share issuer whose domestic shares are quoted on NEEQ, will the Exchange count any domestic shares held by public shareholders as part of the issuer’s public float under Rules 8.08 and 13.32?

Answer:

No. In this case, only listed H-shares held by members of the public are counted towards the issuer’s public float under the Rules.

For the avoidance of doubt, when calculating the percentage of public float, the total number of issued shares of the issuer (i.e. denominator) refers to all classes of shares in issue including H shares and domestic shares.

FAQ Series N/A, FAQ No. 068-2019
LR reference: Main Board Rules 8.0813.32 / GEM Rule 11.23(7)
Released on 30/09/2019

Question:

A listed issuer proposes a rights issue of shares which will be fully underwritten by its controlling shareholder. Based on the size of the proposed rights issue, it is possible that if no qualifying shareholders take up their entitlement of rights shares, the controlling shareholder's interest in the listed issuer would increase to the extent that the public float of the listed issuer would fall below the minimum percentage required under the Listing Rules. 

Will the listed issuer be permitted to proceed with the rights issue?

Answer:

It is the responsibility of the listed issuer to ensure compliance with its continuing obligations under the Listing Rules from time to time, particularly when it proposes any corporate actions.

In the circumstances described, the listed issuer must demonstrate to the Exchange's satisfaction that there are adequate arrangements in place to ensure that the proposed rights issue, if it proceeds, would not result in a breach of the public float requirement set out in the Listing Rules. An example of an acceptable arrangement would be for a conditional placing agreement to be entered into by the controlling shareholder to place down a sufficient amount of its shares in the listed issuer to independent third parties in order to maintain the public float at or above the minimum prescribed percentage set out in the Listing Rules.

FAQ Series 7, FAQ No. 71
LR reference: Main Board Rules 13.32(1) / GEM Rules 11.23(7)
Released on 28/11/2008

Question:

Company I proposes to acquire a property from one of its directors, which constitutes a discloseable and connected transaction. The consideration for the proposed acquisition will be settled by issuing new shares of Company I to the vendor.

No shareholder is required to abstain from voting if Company I were to convene a general meeting for the approval of the proposed acquisition. Company I has obtained the written approval of the transaction from its parent company holding 60% interest in Company I.

Will the Exchange grant a waiver to Company I from convening a general meeting to approve the connected transaction pursuant to Main Board Rule 14A.37 / GEM Rule 20.35? Can Company I issue the consideration shares using the existing general mandate?

Answer:

As Company I is able to meet all the conditions set out in Main Board Rule 14A.37 / GEM Rule 20.35, a waiver from convening a general meeting to approve the proposed acquisition would normally be granted to Company I for the purpose of connected transaction rules.

On the basis that Company I has obtained independent shareholder approval for the proposed acquisition, and the method of settling the consideration was clearly disclosed and not subject to amendment, Company I would be permitted to issue the consideration shares to the vendor pursuant to a general mandate according to Note 1 to Main Board Rule 13.36(2)(b) / the Note to GEM Rule 17.41(2).

FAQ Series 7, FAQ No. 53
LR reference: Main Board Rules 14A.37, 13.36 / GEM Rules 20.35, 17.39, 17.41
Released on 28/11/2008 (Updated on 1/7/2014)

Question:

When Eligible SEHK Issuers and Other Connect Issuers propose pre-emptive issues (including rights issues, open offers, bonus issues and scrip dividend schemes) or distributions in specie to shareholders, should they offer or distribute entitlement securities to Mainland investors holding the issuers' securities through Shanghai and Shenzhen Connect ("Southbound Shareholders")?

Answer:

Yes.

FAQ Series 29, FAQ No. 1
LR reference: Main Board Rules 13.36
Released on 14/11/2014 (Updated on 13/07/2018)

Question:

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

Answer:

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

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

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

Question:

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

Answer:

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

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

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

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

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

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

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

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

Question:

Is an overseas legal opinion is required in the event that a proposed bonus issue of issue of warrants will exclude overseas shareholders?

Answer:

No. Note 1 to Main Board Rule 13.36(2)(a)(GEM Rule 17.41(1) only requires the issuer make enquiry regarding the legal restrictions under the laws of the relevant jurisdiction. It is up to the issuer to decide whether or not it should obtain a legal opinion to support its analysis of the Rules.

FAQ Series 1, FAQ No. 28
LR reference: Main Board Rules 13.36(2)(a) / GEM Rules 17.41(1)
Released on 30/3/2004 (Updated in February 2020)

Question:

A listed issuer proposes a bonus issue of warrants to its existing shareholders on a pro-rata basis.

Main Board Rule 13.36(2)(a) / GEM Rule 17.41(1) provides that no shareholders' approval is required for an offer of securities to shareholders on a pro-rata basis. Can the listed issuer apply this rule in respect of its proposed bonus issue of warrants?

Answer:

The circumstances described involves issue of warrants and the listed issuer must also comply with Main Board Rule 15.02 / GEM Rule 21.02 which requires that all warrants must be approved by shareholders in general meeting unless they are issued by the directors under the authority of a general mandate granted to them by shareholders in accordance with Main Board Rule 13.36(2)/ GEM Rule 17.41(2).

Accordingly, the listed issuer must have sufficient headroom under its general mandate to issue the bonus warrants, and if not shareholders' approval in a general meeting will be required.

FAQ Series 7, FAQ No. 65
LR reference: Main Board Rules 15.02, 13.36(2)(a) / GEM Rules 21.02, 17.41(1)
Released on 28/11/2008

Question:

Are there new PRC requirements for Eligible SEHK Issuers and Other Connect Issuers to offer or distribute securities to Southbound Shareholders in the above corporate actions?

Answer:

(a) Rights issues and open offers

Yes. The China Securities and Regulatory Commission (CSRC) has issued the Announcement [2016] No. 21 "Filing Requirements for Hong Kong Listed Issuers Making Rights Issues to Mainland Shareholders through Mainland-Hong Kong Stock Connect". The document sets out the requirements for Eligible SEHK Issuers and Other Connect Issuers offering securities to their Southbound Shareholders in rights issues / open offers (see also question 3 below).

Issuers should also note that under Shanghai and Shenzhen Connect, China Securities Depository and Clearing Corporation Limited (ChinaClear) will provide nominee services for Southbound Shareholders to (i) sell their nil-paid rights on SEHK; and/or (ii) subscribe for their entitlement securities under the rights issues / open offers in accordance with relevant laws and regulations. However, it will not support excess applications by Southbound Shareholders through Shanghai and Shenzhen Connect1.

Note 1: See Article 23 of ChinaClear's Implementing Rules for Registration, Depository and Clearing Services under the Mainland-Hong Kong Stock Connect (ChinaClear Stock Connect Implementing Rules) 中國證券登記結算有限責任公司《內地與香港股票市場交易互聯互通機制登記、存管、結算業務實施細則》
(b) Bonus issues, scrip dividend schemes and distributions in specie

No rules or guidance has been published by the CSRC.

FAQ Series 29, FAQ No. 2
LR reference: Main Board Rules Chapter 7, 13.36(2)(a) Note 1
Released on 14/11/2014 (Updated on 13/07/2018)

Question:

Is there any limit on the number of refreshments of the general mandate during a year? How is the "one year" determined — from refreshment of the general mandate or with reference to annual general meetings?

Answer:

No. There is no limit on the number of refreshments of the general mandate by Main Board and GEM issuers during a year. However, independent shareholders' approval is required for the second and subsequent refreshments during the year.

The period of "one year" is a rolling one year period normally determined with reference to annual general meetings when a new mandate for the year is obtained.

FAQ Series 1, FAQ No. 30
LR reference: Main Board Rules 13.36(2)(b) / GEM Rules 17.41(2)
Released on 30/3/2004

Question:

A listed issuer proposes a resolution to seek shareholders' approval for a bonus issue of shares to its existing shareholders pursuant to its articles of association at the forthcoming annual general meeting.

Can the listed issuer take into account such bonus issue when determining the maximum number of shares that are allowed to be issued under a new general mandate proposed at the same general meeting?

Answer:

No, because the bonus shares are not yet issued at the time when the listed issuer seeks shareholders' approval for the new general mandate. Pursuant to Main Board Rule 13.36(2)(b) / GEM Rule 17.41(2), the maximum number of shares that may be issued under the general mandate is "(i) 20% of the number of issued shares of the issuer as at the date of the resolution granting the general mandate... plus the number of such securities repurchased by the issuer itself since the granting of the general mandate (up to a maximum number equivalent to 10% of the number of issued shares of the issuer as at the date of the resolution granting the repurchase mandate)...".

FAQ Series 7, FAQ No. 61
LR reference: Main Board Rules 13.36(2)(b) / GEM Rules 17.41(2)
Released on 28/11/2008 (Updated April 2015)

Question:

Mr. A is a director of Listco. Under his director service contract, he may be entitled to receive share awards to be granted under Listco's share award scheme.

Can Listco apply the directors' service contract exemption under Rule 14A.95 if the share awards are granted to Mr. A in form of new shares of Listco?

Answer:

No. Transactions or arrangements involving issuance of new shares by a listed issuer to its connected persons are exempt from the connected transaction Rules only if they fall under the circumstances described in Rule 14A.92. Therefore, the grant of share awards in form of new shares to Mr. A will be subject to the announcement, reporting and shareholder approval requirements under Chapter 14A.

FAQ Series 28, FAQ No. 20
LR reference: Main Board Rules 14A.95, Note 1 to 13.36(2)(b) / GEM Rules 20.93, Note to 17.41(2)
Released on 21/3/2014

Question:

Company A is the substantial shareholder of a subsidiary of Listco. It is a connected person of Listco at the subsidiary level.

Listco proposes to place new shares for cash to Company A. Can Listco apply the exemption for transactions with connected persons at the subsidiary level under Rule 14A.101 to exempt the proposed placing from the independent shareholder approval requirement under Chapter 14A?

Answer:

No. Transactions or arrangements involving issuance of new shares by a listed issuer to its connected persons are exempt from the connected transaction Rules only if they fall under the circumstances described in Rule 14A.92. As Company A is a connected person of Listco, the issue of new shares of Listco to it will be subject to the announcement, reporting and shareholder approval requirements under Chapter 14A.

FAQ Series 28, FAQ No. 21B
LR reference: Main Board Rules 14A.92, 14A.101, Note 1 to 13.36(2)(b) / GEM Rules 20.90, 20.99, Note to 17.41(2)
Released on 29/5/2015

Question:

Listco proposes to issue new shares to Mr. A as the consideration for an acquisition of assets from Mr. A.

Mr. A is a director of certain insignificant subsidiaries of Listco. If Mr. A meets the conditions for the significant subsidiary exemption under Rule 14A.09 at the time of the proposed transaction, is the transaction subject to the connected transaction requirements under Chapter 14A?

Answer:

As Mr. A is not a connected person of Listco, the proposed transaction is not a connected transaction under Chapter 14A.

FAQ Series 28, FAQ No. 21C
LR reference: Main Board Rules 14A.09, Note 1 to 13.36(2)(b) / GEM Rules 20.08, Note to 17.41(2)
Released on 29/5/2015

Question:

When a listed issuer refreshes the General Property Acquisition Mandate at a general meeting, does the controlling shareholder have to abstain from voting as in the case of refreshing a general mandate under Main Board Rule 13.36(4)(a) (GEM Rule 17.42A)?

Answer:

No. Main Board Rule 13.36(4)(a) (GEM Rule 17.42A) is not applicable to the refreshment of the General Property Acquisition Mandate.

FAQ Series 8, FAQ No. 32
LR reference: Main Board Rules 13.36(4)(a) / GEM Rules 17.42A
Released on 28/11/2008

Question:

Please explain the top-up arrangement under refreshment of general mandate.

Answer:

An issuer wishing to top-up the unused portion of their previous general mandate, based on the enlarged issued share capital, needs only to obtain shareholders' approval. They can top up to the number of shares so that, in percentage terms, the unused part of the general mandate before and after the pre-emptive issue of securities is the same.

Example:

Existing issued share capital : 100,000 shares

General mandate before placing: 20,000 shares (20%)

Placing of shares under the general mandate: 5,000 shares

Issued share capital after placing: 105,000 shares

Unused general mandate: 15,000 shares (15% of 100,000 shares)

New shares issued under a 1 for 2 rights issue: 52,500 shares

Issued share capital after right issue: 157,500 shares

Shareholders' approval will be required to top-up the general mandate from 15,000 to 23,625 shares (15% of 157,500 shares). Independent shareholders' approval will be required for an additional mandate for 7,875 shares (i.e. 5% of 157,500 shares).

FAQ Series 1, FAQ No. 31
LR reference: Main Board Rules 13.36(4)(e) / GEM Rules 17.42A(5)
Released on 30/3/2004

Question:

A listed issuer proposes to enter into an agreement with one of its creditors under which the listed issuer agree to issue new shares for the repayment of a loan due to the creditor.

The listed issuer intends to issue the new shares under a general mandate. Is such issue subject to the restriction on pricing of the new shares to be issued under general mandate set out Main Board Rule 13.36(5) / GEM Rule 17.42B?

Answer:

Yes. The proposal is in substance an issue of new shares for cash consideration. The listed issuer must ensure that the issue price of such new shares complies with the requirement of Main Board Rule 13.36(5) / GEM Rule 17.42B before it enters into the agreement.

FAQ Series 7, FAQ No. 63
LR reference: Main Board Rules 13.36(5) / GEM Rules 17.42B
Released on 28/11/2008

Question:

A listed issuer, whose shares are already listed on the Exchange, proposes to raise funds through placing of warrants that allow subscription of new shares of the issuer. As the warrants represent a new class of equity securities of the listed issuer, how should the listed issuer comply with the pricing requirement under Main Board Rule 13.36(5) / GEM Rule 17.42B in respect of such placing of securities for cash?

Answer:

The listed issuer should demonstrate that the issue price of the warrants and the subscription price payable upon exercise of the warrants in aggregate would not represent a discount of 20% or more to the benchmarked price of the shares set out in Main Board Rule 13.36(5) / GEM Rule 17.42B.

FAQ Series 7, FAQ No. 64
LR reference: Main Board Rules 13.36(5) / GEM Rules 17.42B
Released on 28/11/2008

Question:

Are there any examples of procedural and administrative matters?

Answer:

Procedural and administrative matters include, for example, adjourning a meeting by resolution to:

(a) ensure orderly conduct of the meeting. (e.g. if the meeting facilities to house the number of members attending has become inadequate); or
(b) maintain the orderliness of the meeting, e.g. if it becomes impossible to ascertain the views of the members, or there is disorder or threat of disorder from members or if there is a disturbance caused by members or the uninvited public; or
(c) respond to an emergency such as a fire, a serious accident or hoisting of tropical cyclone warning signal No. 8 during a meeting; or
(d) announce results at the end of the annual general meeting.

FAQ Series 17, FAQ No. 14
LR reference: Main Board Rules Note to Rule 13.39(4) / GEM Rules Note to Rule 17.47(4)
Released on 19/12/2011

Question:

Should the independent board committee established under Main Board Rules 13.39(6)(a) and 14A.41/ GEM Rules 17.47(6)(a) and 20.39 comprise all independent non-executive directors of the listed issuer?

Answer:

The independent board committee should comprise all independent non-executive directors of the listed issuer, who have no material interest in the relevant transaction.

FAQ Series 7, FAQ No. 42
LR reference: Main Board Rules 13.39(6)(a) and (c), 14A.41 / GEM Rules 17.47(6)(a) and (c), 20.39
Released on 28/11/2008 (Updated on 1/7/2014)

Question:

What is the procedure regarding the notification of board meetings?

Answer:

Issuers are required to inform HKEx and publish an announcement through the e-Submission System at least seven clear business days in advance of the date fixed for any board meeting at which the declaration, recommendation or payment of a dividend is expected to be decided or at which any announcement of the profits or losses for any year, half-year or other period is to be approved for publication. The announcement does not require publication in the newspapers. It must be published on the HKEx website and on the issuer's own website.

FAQ Series 3, FAQ No. 12
LR reference: Main Board Rules 13.43 / GEM Rules 17.48
Released on 22/3/2007 (Updated on 7/3/2011)

Question:

A listed company has published an announcement on the board meeting date to approve its annual results 7 clear business days before the board meeting.

If the listed company subsequently decides to postpone the board meeting to a later date, is it required to give another 7-day notice?

Answer:

Subject to its articles of association, the listed company does not need to give another 7-day notice. However, it should, as soon as practicable, announce the postponement of board meeting and the revised board meeting date.

FAQ Series 17, FAQ No. 14A (Previously published in FAQ Series 9 No.25)
LR reference: Main Board Rules 13.43 / GEM Rules 17.48
Released on 14/12/2009 (Updated on 28/12/2018)

Question:

If a director is a shareholder of the issuer, should the director abstain from voting when the board considers dividend payments?

Answer:

No.  In cases where a director’s interest is the same as all shareholders (e.g. approving dividend payments), then the director does not need to abstain from voting.

FAQ Series 17, FAQ No. 15
LR reference: Main Board Rules 13.44 / GEM Rules 17.48A
Released on 19/12/2011 (Last updated on 01/01/2022)

Question:

If a director has a material interest in a board resolution approving a transaction concerning another company, but does not have any beneficial interest in the shares of that company, should the director abstain from voting on the relevant resolution?

Answer:

Yes. As long as the director has a material interest in the transaction, the director should abstain from voting, even if the director has no beneficial interest in the shares of the other company.

FAQ Series 17, FAQ No. 15A
LR reference: Main Board Rules 13.44 / GEM Rules 17.48A
Released on 19/12/2011 (Last updated on 01/01/2022)

Question:

Is it acceptable for an issuer to simply comply with this Rule without amending its memorandum and articles of association (to remove the exception for a director voting on a resolution in which the individual has a less than 5% interest) (note) until further substantial changes are required to be made to the documents?

Note: this exception was provided in paragraph 3 of Note 1 to the old Appendix 3 (that was in force before 31 December 2021), which was subsequently repealed on 1 January 2022.

Answer:

Yes, an issuer does not need to amend its constitutional document as a result of this Rule amendment. However, to comply with Main Rule 13.44 (GEM Rule 17.48A), the issuer is reminded that a director might have a material interest in a transaction with a company even if he was interested in less than 5% of that company’s issued shares or voting rights.

FAQ Series 17, FAQ No. 15B
LR reference: Main Board Rules 13.44 / GEM Rules 17.48A
Released on 19/12/2011 (Updated on 01/01/2022)

Question:

How soon after a Board Meeting is held to approve preliminary announcements of financial results and/or dividends do the results have to be published?

Answer:

Under Listing Rules MB 13.45/ GEM 17.49, an issuer must publish any preliminary results announcement immediately after approval by the Board. Preliminary results that have been approved at a board meeting in the morning of a business day should be submitted for publication via the e-Submission System during the lunchtime publication window between 12.00 noon and 12.30 p.m. on a normal business day, or between 12.30 p.m. and 11.00 p.m. on the eves of Christmas, New Year and the Lunar New Year when there is no afternoon session.

Where the listed issuer expects that it would not be in a position to publish the preliminary results announcement during the lunchtime publication window on a normal business day, it should consider holding the board meeting in the afternoon so that the preliminary results announcement may be published after 4.30 p.m. on that business day, or failing that, between 6.00 a.m. and 8.30 a.m. on the following business day at the latest.

The directors have the direct responsibility to ensure that the information is kept strictly confidential until it is announced.

FAQ Series 3, FAQ No. 72
LR reference: Main Board Rules 13.45 / GEM Rules 17.49
Released on 22/3/2007 (Updated on 25/7/2016)

Question:

How soon after the holding of the board meeting approving preliminary results can a press conference be held?

Answer:

Under the Listing Rules, the release of information by way of a formal announcement via the HKEx website is regarded as the formal channel of communication with the investing public. Listed issuers should manage the release of their financial results in accordance with these principles and requirements. Under Note 1 to Listing Rules MB 13.45/ GEM 17.49, issuers' directors have the direct responsibility to ensure that the information is kept strictly confidential until it is announced. The preliminary results announcement needs first to have been published on the HKEx website before a press conference / analyst meeting can be held and one has to allow reasonable time from the time of submission for the announcement to be uploaded and published on the HKEx website. The listed issuer should also have proper procedures in place to ensure that this is the case.

Listed issuers should take all reasonable steps to keep the preliminary results confidential before it is announced. What would amount to all reasonable steps would depend on the particular circumstances prevailing. As general guidance we recommend that listed issuers take steps, including but not limited to the following:

•   measures to ensure the timely delivery of the announcement to HKEx upon market close and immediately after the board meeting;
•   planned timetable that would allow reasonable processing time for HKEx to upload the announcement prior to press conference/analyst meetings; and
•   measures that would safeguard the accuracy and content of the announcement (including virus free soft copies files).

Preliminary results announcements must be published, without delay, during time periods permitted on a business day by Listing Rules MB 2.07C(4)(a) and GEM 16.18(3)(a).

FAQ Series 3, FAQ No. 73
LR reference: Main Board Rules 13.45 / GEM Rules 17.49
Released on 22/03/2007 (Updated on 01/05/2015)

Question:

After 4.30 p.m. on a normal business day, can a press conference be held even though the preliminary results announcement has not yet been published?

Answer:

No. Note 1 to Listing Rule MB 13.45/ GEM 17.49 sets out specific requirements for listed issuers after board meetings for approval of results and dividends:

"...The directors are reminded that it is their direct responsibility to ensure that such information is kept strictly confidential until it is announced."

Under the Listing Rules, the release of information by way of a formal announcement via the HKEx website is regarded as the formal channel of communication with the investing public. Listed issuers should manage the release of their financial results in accordance with these principles and requirements. Listed issuers should therefore release formal announcements before the dissemination of financial results at the press conference / analyst meeting.

FAQ Series 3, FAQ No. 76
LR reference: Main Board Rules 13.45 / GEM Rules 17.49
Released on 22/3/2007 (Updated on 25/7/2016)

Question:

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

Answer:

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

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

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

Question:

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

Answer:

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

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

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

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

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

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

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

Question:

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

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

Answer:

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

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

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

Question:

A listed issuer proposes to seek shareholders' approval for certain amendments to its articles of association.

Main Board Rule 13.51(1) / GEM Rule 17.50(1) requires the listed issuer to submit a confirmation from its legal advisers that the proposed amendments comply with the requirements of the Exchange Listing Rules and the laws of the place where it is incorporated or otherwise established.

The Rule also requires the listed issuer to confirm that there is nothing unusual about the proposed amendments for a company listed in Hong Kong. Is the listed issuer required to obtain a legal opinion in this regard?

Answer:

With respect to the listed issuer's confirmation that there is nothing unusual about the proposed amendments to its articles of association, it is up to the listed issuer to decide whether an enquiry with its legal advisers needs to be made to assist the directors to determine whether there is anything unusual about the proposed amendments to the articles of association. In assessing the question of what is unusual, the directors should have regard to whether the proposed amendments are customary or a common feature of the articles of association of companies listed in Hong Kong.

FAQ Series 8, FAQ No. 35
LR reference: Main Board Rules 13.51(1) / GEM Rules 17.50(1)
Released on 28/11/2008

Question:

Under Main Board Rule 13.51(1)/ GEM Rule 17.50(1), an issuer proposing to amend its articles of association must submit to the Exchange a letter to the issuer from its legal advisers confirming that the proposed amendments comply with the Listing Rules and the laws of the place of incorporation of the issuer.

Listco will amend its articles of association and proposes the following arrangements:

•   Can Listco appoint one legal adviser to opine on the compliance with Listing Rules and another legal adviser to opine on the compliance with the laws of the place of incorporation of the issuer?
•   Can the confirmation letter be issued by Listco's in-house legal counsel?

Answer:

Yes. The arrangements are acceptable as long as Listco considers the persons have the professional qualifications and experience to provide the confirmation letter.

FAQ Series 9, FAQ No. 24
LR reference: Main Board Rules 13.51(1) / GEM Rules 17.50(1)
Released on 14/12/2009

Question:

According to the circulars issued by the State Council of the PRC and the China Securities Regulatory Commission on 22 and 25 October 2019, the notice period for general meetings of PRC issuers (and other related matters) shall be governed by the Company Law of the PRC, but not the Special Regulations on the Overseas Offering and Listing of Shares by Joint Stock Limited Companies issued by the State Council (the Regulations). This will shorten the notice period for general meetings from 45 days to 20 days for annual general meetings and 15 days for special general meetings. The circular also advised PRC issuers to amend their articles of association accordingly.

Under Appendix 13D to the Main Board Rules / Appendix 11C to the GEM Rules, a PRC issuer’s articles of association must include the Mandatory Provisions issued by PRC regulatory authorities. A PRC issuer asks whether its articles of association, as amended, would continue to comply with the requirement of Appendix 13D / Appendix 11C.

Answer:

Yes. Under Main Board Rule 19A.53 / GEM Rule 25.40 a PRC issuer shall observe and comply with the Company Law, the Regulations and the PRC issuer’s articles of association. The PRC issuer would be in compliance with the Rules.

The issuer is also reminded that under Main Board Rule 13.51(1) / GEM Rule 17.50(1) it must, at the same time as it dispatches a circular to shareholders on the proposed amendments, submit to the Exchange a confirmation from its legal adviser that the amendments to the articles of association conform to the Listing Rule requirements and the PRC laws and regulation.

FAQ No. 070-2019
LR reference: Main Board Rules 13.51(1), 19A.53, Paragraph (a) of Section 1 of Appendix 13D / GEM Rules 17.50(1), 25.40, Paragraph (a) of Section 1 of Appendix 11C
Released on 8/11/2019

Question:

Is a director of a listed issuer required to sign a new declaration and undertaking form if he is or is proposed to be re-designated from an executive director to a non-executive director, or vice- versa?

Answer:

No.

However, in accordance with Main Board Rule 13.51(2) or GEM Rule 17.50(2), an issuer must inform the Exchange of the re-designation of a director immediately after such re-designation takes effect, and the issuer must simultaneously make arrangements to ensure that an announcement of the re-designation of the director is published in accordance with Main Board Rule 2.07C (Chapter 16 of the GEM Rules) as soon as practicable.

FAQ Series 8, FAQ No. 36
LR reference: Main Board Rules 13.51(2), Form B/H in Appendix 5 / GEM Rules 17.50(2), Form A/B in Appendix 6
Released on 28/11/2008 (Updated in February 2020)

Question:

How should the directors / supervisors of an issuer seeking to transfer from GEM to the Main Board complete paragraph 2 of Part 1 of Form B/H/I in Appendix 5?

Answer:

Directors and supervisors of Eligible Issuers under paragraph 8 of Appendix 28 of the Main Board Rules should state in the forms that their personal details have been set out in the announcement.

GEM transfer applicants that are not Eligible Issuers under paragraph 8 of Appendix 28 of the Main Board Rules are considered new listing applicants and their directors and supervisors should state in the forms that their personal details have been set out in the listing document.

FAQ Series 8, FAQ No. 59
LR reference: Main Board Rules Form B/H/I in Appendix 5, Appendix 28 paragraph 10, 13.51(2)
Released on 28/11/2008 (Updated in February 2020)

Question:

In the case of the resignation, retirement or removal of a director, supervisor or chief executive, will an issuer also be required to make the disclosures set out in (a) to (x) of Main Board Rule 13.51(2)/GEM Rule 17.50(2)?

Answer:

No, it is not intended that when a director, supervisor or chief executive resigns, retires or is removed that the announcement should contain the items listed under (a) to (x) of Main Board Rule 13.51(2)/GEM Rule 17.50(2).

FAQ Series 17, FAQ No. 16
LR reference: Main Board Rules 13.51(2) / GEM Rules 17.50(2)
Released on 19/12/2011

Question:

Please clarify what "professional qualification" under Main Board Rule 13.51(2)(c)/GEM Rule 17.50(2)(c) refers to.

Answer:

It refers to a qualification in respect of a professional discipline, for example law, accounting, engineering, architecture, surveying or medicine. It also includes any professional title and membership of a professional body.

FAQ Series 8, FAQ No. 37
LR reference: Main Board Rules 13.51(2)(c) / GEM Rules 17.50(2) (c)
Released on 28/11/2008 (Updated in February 2020)

Question:

If there is no information to be disclosed pursuant to the requirements under certain paragraphs, say (h) to (w), in Main Board Rule 13.51(2)/GEM Rule 17.50(2), is a negative statement required for each sub-paragraph including a recital of the language of the sub-paragraph in full or, alternatively, is it acceptable for the negative statement to be made by quoting the rule reference without a detailed description of each of the requirements therein?

Answer:

Subject to the comment below, compliance with the requirements of Main Board Rule 13.51(2)/GEM Rule 17.50(2), could be achieved by either approach. We think the alternative offers a more elegant and focused form of disclosure. Under either approach separate disclosure should always be made pursuant to Main Board Rule 13.51(2)(w) /GEM Rule 17.50(2)(w) to confirm, in the announcement, whether or not there are any other matters that need to be brought to the attention of holders of securities of the listed issuer.

FAQ Series 2, FAQ No. 2
LR reference: Main Board Rules 13.51(2)(x) / GEM Rules 17.50(2)(x)
Released on 6/6/2006 (Updated on 30/9/2009)

Question:

Can issuers publish on their websites the procedures for director election in a single language (i.e. English or Chinese only)?

Answer:

No, they must be published in both English and Chinese.

FAQ Series 17, FAQ No. 17
LR reference: Main Board Rules 13.51D / GEM Rules 17.50C
Released on 19/12/2011

Question:

If the procedures for shareholders to propose a person for election as a director are set out in an issuer’s constitutional documents (which are already required to be published on its website and the Exchange’s website), does the issuer need to separately publish these procedures on its website?

Answer:

We would expect the issuer to publish the procedures separately on its website. This is because the constitutional documents are usually very lengthy and investors may find it difficult to locate the procedures (especially if they are unaware that these procedures are set out in the constitutional documents. Also, publishing the procedures on the issuer’s website should not be onerous and would enhance the procedures’ transparency.

FAQ Series 17, FAQ No. 17A  (Previously published in FAQ Series 21 No.6)
LR reference: Main Board Rules 13.51D / GEM Rules 17.50C
Released on 27/3/2013 (Updated on 28/12/2018)

Question:

Will the submissions for publication I make through the e-Submission System be vetted by HKEx prior to publication?

Answer:

No. If an announcement requires pre-vetting by the Listing Division, an issuer must not submit that announcement for publication until clearance, by way of the usual indication that the Exchange has "no further comments", has been obtained.

If an issuer wishes to submit an announcement or document for vetting the issuer should log onto the e-Submission System as a "Listing Related Matter" user. The announcement or document can then be submitted to HKEx's Listing Division and vetted if necessary. Announcements or documents submitted as a "Listing Related Matter" user are not published by the e-Submission System.

It is the issuer's responsibility to decide whether an announcement or document should be submitted for publication or submitted for vetting through the e-Submission System. An issuer can consult HKEx's published "Guide on pre-vetting requirements and selection of headline categories for announcements" (http://www.hkex.com.hk/eng/rulesreg/listrules/guidref/guide_pre_vetting_req.htm) for guidance on this matter.

FAQ Series 3, FAQ No. 170
LR reference: Main Board Rules 13.52, 13.52A, 13.52B / GEM Rules 17.53, 17.53A, 17.53B
Released on 22/3/2007 (Updated on 7/3/2011)

Question:

Will the Exchange review announcements submitted by a listed issuer before publication that are not subject to the pre-vetting requirement under Main Board Rule 13.52(2) (GEM Rule 17.53(2))?

Answer:

No, the Exchange will not pre-vet such announcement unless in exceptional circumstances. An issuer is encouraged to consult the Exchange on any Rule compliance issues in relation to the announcement and/or the subject matter before it publishes the announcement.

FAQ Series 8, FAQ No. 38
LR reference: Main Board Rules 13.52(2) / GEM Rules 17.53(2)
Released on 28/11/2008 (Updated in February 2020)

Question:

Where a listed issuer publishes an announcement under the Rules that is not subject to the pre-vetting requirement under Main Board Rule 13.52(2) (GEM Rule 17.53(2)), will the Exchange require the listed issuer to submit any documents (for example Listing Rule compliance checklists) for the purpose of post-vetting the announcement?

Answer:

If the announcement is made in respect of a share / discloseable transaction required under Main Board Rules 14.34 and 14.35 (GEM Rules 19.34 and 19.35), the listed issuer must complete the "Size Tests Checklist" and submit it to the Listing Division not later than the publication of the announcement.

The Exchange may require the listed issuer to submit information and/or documents in respect of an announcement published by the issuer to demonstrate its compliance with the Rules. In such cases, the Exchange will inform the listed issuer of the specific information and/or documents required. A checklist for disclosure requirements applicable to a particular type of announcement may need to be submitted by the listed issuer upon request by the Exchange in individual cases.

FAQ Series 8, FAQ No. 39
LR reference: Main Board Rules 13.52(2) / GEM Rules 17.53(2)
Released on 28/11/2008

Question:

Under what circumstances will the Exchange exercise the right under Main Board Rule 13.52A (GEM Rule 17.53A) to request review of announcements, circulars or other documents before their publication?

Answer:

The Exchange will only exercise this power in exceptional circumstances. This is generally the case where the Exchange has an interest in reviewing certain disclosure in a listed issuer's announcement, for example the Exchange has required the listed issuer to make certain specific disclosure in its announcement and such disclosure is necessary to ensure a fair, orderly and efficient market. In such cases, the Exchange will communicate to the listed issuer its direction to review the announcement prior to publication and the reasons for its decision.

FAQ Series 8, FAQ No. 40
LR reference: Main Board Rules 13.52A / GEM Rules 17.53A
Released on 28/11/2008)

Question:

When an A+H issuer proposes a corporate action (e.g. distribution of dividends or other entitlements), does it need to disclose the timetables for both A and H shareholders in the same announcement?

Answer:

Yes. The issuers should ensure clear communications to all shareholders if they propose different timetables (e.g. ex-entitlement date, record date and payment date) for their distributions to shareholders in the two markets.

FAQ Series 29, FAQ No. 7
LR reference: Main Board Rules 13.52B
Released on 14/11/2014

Question:

How could an issuer send hard copies of its corporate communicates to investors whose shares are held in the Central Clearing and Settlement System ("CCASS") either directly or indirectly through a broker or custodian ("CCASS Investors"), as such shares were held in the name of HKSCC Nominees Limited and the names of CCASS Investors do not appear on the issuer’s register of members?

Answer:

An issuer can post on its website a notification of the publication of corporate communication together with a request form. A CCASS investor who wishes to receive a hard copy of the corporate communication, would need to complete and return the request form to the share registrar or other agent of the issuer. The issuer can then send the CCASS investor a hard copy.

Issuers should have in place an arrangement to track the preference of CCASS Investors to ensure, on a best efforts basis, that CCASS Investors who have previously indicated their preferences to receive hard copies of corporate communications do not have to complete and return a request form for every corporate communication, unless they ceased to be shareholders of the issuer.

FAQ Series 8, FAQ No. 40A
LR reference: Main Board Rules 13.56 / GEM Rules 17.60
Released on 31/12/2009 (Updated in February 2020)

Question:
 
(a)   Practice Note 8 to the Main Board Rules (or GEM Rules 17.79 and 17.80) sets out the emergency share registration arrangements during a typhoon or a black rainstorm warning. What are the emergency share registration arrangements upon the announcement by the Government of the Hong Kong Special Administrative Region on “extreme conditions” caused by super typhoons (“Extreme Conditions”) (see Note)?
 
(b)   In the case of a rights issue, Main Board Rule 13.66 (or GEM Rule 17.78) states that if trading on the Exchange is interrupted due to a typhoon or a black rainstorm warning, the book-close date will be automatically postponed, where necessary, to provide at least two trading days (during neither of which trading is interrupted) for cum-rights trading during the notice period. Does this arrangement apply if trading on the Exchange is interrupted due to Extreme Conditions?
 
Note: According to the revised “Code of Practice in Times of Typhoons and Rainstorms” issued by the Labour Department in June 2019, the Government of the Hong Kong Special Administrative Region may issue an announcement on “extreme conditions” in the event of, for example, serious disruption of public transport services, extensive flooding, major landslides or large-scale power outage after super typhoons. When “extreme conditions” are in force (i.e. the two-hour period after cancellation of Typhoon Warning Signal No. 8), the Government will review the situation and further advise the public by the end of the two-hour period whether “extreme conditions” will be extended or cancelled.
 
Answer:
 
(a)   The emergency share registration arrangements in the event of Extreme Conditions shall be the same as those applicable to Typhoon Warning Signal No. 8 or above currently set out in the Rules.
 
(b)   Yes. Where the book-close date is postponed in the circumstances described, the issuer must publish an announcement on the revised timetable.
 
FAQ Series N/A, FAQ No. 058-2019
LR reference: Main Board Rules 13.66, Practice Note 8/ GEM Rules 17.78, 17.79, 17.80
Released on 30/08/2019
 

Question:

A director has a service contract without a fixed term which is terminable by either party by giving notice of 6 months. Is shareholders approval necessary as the contract may be for a term that may exceed 3 years?

Answer:

The purpose of the rule is to ensure that the issuer is not unduly burdened by service contracts that are for an inordinate length or which require heavy compensation or lengthy notice for early termination. Such contingent liabilities may be significant, in which case, shareholders' approval must be obtained for these service contracts. In this case, we consider that there is no significant commitment on the issuer as there is no specific term and only six months notice is required. Therefore, the contract does not need to be approved by shareholders.

FAQ Series 1, FAQ No. 33
LR reference: Main Board Rules 13.68 / GEM Rules 17.90
Released on 30/3/2004

Question:

Is shareholders' approval required for a director's service contract with a fixed term of 3 years, but requiring a notice of 6 months before termination after the fixed term? The contract does not mention the compensation for early termination of the fixed term. It expressly states however that, if the contract is terminated when the remaining term is more than 1 year, a compensation in dollars for the remaining term will be needed. Will this contract require shareholders' approval?

Answer:

Yes, shareholders' approval is required because the service contract is of a fixed term of 3 years and a notice of 6 months is required for termination after the fixed term and accordingly, the service contract may endure for more than 3 years.

In addition, the service contract will be subject to shareholders' approval because it expressly provides for a scenario where more than 1 year's remuneration will be payable in order to terminate the contract.

FAQ Series 1, FAQ No. 34
LR reference: Main Board Rules 13.68 / GEM Rules 17.90
Released on 30/3/2004

Question:

Is an "employment contract" with a director the same as a director's "service contract"? Should it be treated as a notifiable transaction?

Answer:

Yes. We would expect an "employment contract" with a director to contain the terms upon which he is to provide his services to issuer, and subject to the same disclosure and shareholders’ approval requirements as for service contracts.

Directors' employment contracts are not subject to the requirements of notifiable transactions.

FAQ Series 1, FAQ No. 35
LR reference: Main Board Rules 13.68 / GEM Rules 17.90
Released on 30/3/2004 (Updated in February 2020)

Question:

What are the disclosure requirements for the announcement or supplementary circular an issuer is required to publish if, after the despatch of the notice of a general meeting, it received a shareholder’s notice to propose a person for election as a director at the general meeting in respect of the nomination?

Answer:

The issuer must publish details of the candidate as required under Main Board Rule 13.51(2)(GEM Rule 17.50(2)) in an announcement or supplementary circular.

Further, the issuer must give shareholders at least seven days to consider the relevant information disclosed in such an announcement or supplementary circular prior to the date of the meeting of the election. The issuer must also assess whether it is necessary to adjourn the meeting of the election to give shareholders a longer period of at least 10 business days to consider the relevant information disclosed in the announcement or supplementary circular.

FAQ Series 1, FAQ No. 36
LR reference: Main Board Rules 13.70 / GEM Rules 17.46B
Released on 30/3/2004 (Last updated in January 2022)

Question:

Can issuers accept a notice to propose a person for election as a director earlier than the day after the despatch of the notice of the general meeting appointed for the election?

Answer:

Yes. Provided that such is permitted under the issuer’s articles of association or equivalent document and the applicable law.

FAQ Series 1, FAQ No. 69
LR reference: Main Board Rules 13.70 / GEM Rules 17.46B
Released on 30/3/2004 (Last updated in January 2022)

Question:

A shareholder proposes a person for election as a director at the forthcoming AGM after the listed company has issued the AGM notice. The listed company will issue a supplemental notice for the nomination of the director. Is it required to comply with the reasonable notice period under Appendix 3, paragraph 14(2) for the despatch of this supplemental notice?

Answer:

For nomination of directors in the circumstances described, Main Board Rule 13.70/ GEM Rule 17.46B specifically require the issuer to give shareholders at least seven days to consider the relevant information disclosed in such an announcement or supplementary circular prior to the date of the meeting of the election. Also, the issuer must assess whether it is necessary to adjourn the general meeting to give shareholders a longer period of at least 10 business days to consider the information disclosed in the supplemental notice. It would normally be acceptable for the listed company to issue the supplemental notice 10 business days before the AGM or the adjourned AGM.

FAQ Series 17, FAQ No. 26C (Previously published in FAQ Series 9 No.27)
LR reference: Main Board Rules 13.70, Appendix 3, paragraph 14(2) / GEM Rules 17.46B, Appendix 3, paragraph 14(2)
Released on 14/12/2009 (Updated on 01/01/2022)

Question:

Must an issuer disclose the biographical details of directors to be elected at a general meeting in the notice or another circular, if such information is already disclosed in the annual report and the election is to be proposed at an Annual General Meeting ("AGM")?

Answer:

No. It is not necessary to send another circular if details are included in the annual report provided that the annual report is the accompanying circular, and the notice has made clear reference to the annual report such that there is no doubt as to where the information can be found and to which director reference is being made.

However, for appointments at times other than at the AGM, reference to the annual report is not acceptable. This is because (i) certain shareholders as at the date when relevant disclosure is made may not have been so when the circular or notice of AGM was sent: and (ii) there may have been changes in the information previously published which will need to be updated.

FAQ Series 1, FAQ No. 37
LR reference: Main Board Rules 13.74 / GEM Rules 17.46A
Released on 30/3/2004 (Updated in February 2020)

Question:

Is an issuer required to seek shareholder approval for the appointment of a new auditor if the existing auditor resigns before the end of their term of office? 

Answer:

Shareholder approval is not required for the appointment of an auditor to fill a casual vacancy during the year. However, the issuer must seek shareholder approval for the formal appointment of the auditor at the next AGM.

FAQ Series 17, FAQ No. 18
LR reference: Main Board Rules 13.88, Appendix 3, paragraph 17 / GEM Rules 17.100, Appendix 3, paragraph 17
Released on 19/12/2011 (Last updated on 01/01/2022)

Question:

Can issuers publish their constitutional documents in a single language (i.e. English or Chinese only)?

Answer:

No, the constitutional documents must be published in both English and Chinese.

FAQ Series 17, FAQ No. 19
LR reference: Main Board Rules 13.90 / GEM Rules 17.102
Released on 19/12/2011

Question:

If we translate our constitutional document, would both languages be of equal effect?

Answer:

For translation of constitutional documents, you should specify which of the two languages (Chinese or English) prevail in case of discrepancies or inconsistencies.

FAQ Series 17, FAQ No. 19A
LR reference: Main Board Rules 13.90 / GEM Rules 17.102
Released on 19/12/2011

Question:

Do issuers have to publish their constitutional documents by way of an announcement? Which announcement headline(s) should they use?

Answer:

Issuers do not need to publish their constitutional documents by way of an announcement. They may select the current Tier One Headline Category — Constitutional Documents when submitting their documents for publication on the HKEXnews website.

FAQ Series 17, FAQ No. 19B
LR reference: Main Board Rules 13.90 / GEM Rules 17.102
Released on 19/12/2011

Question:

If an issuer has amended its constitutional documents (memorandum and articles of association, bye-laws or other equivalent constitutional document) many times over the years since its incorporation, is it required to post to the Exchange website its documents incorporating all the previous amendments?

Answer:

The issuer is required to publish a consolidated version of its constitutional document which has incorporated all the changes. This may be a conformed copy or a consolidated version not formally adopted by shareholders at a general meeting. However, if the issuer does so, the front page of its published constitutional document should include a statement that it is a conformed copy or a consolidated version not formally adopted by shareholders at a general meeting.

FAQ Series 17, FAQ No. 19C
LR reference: Main Board Rules 13.90 / GEM Rules 17.102
Released on 19/12/2011

Question:

An issuer is incorporated in Bermuda and in order to publish a consolidated version of the constitutional document, the issuer needs to obtain shareholder and court approval and register the consolidated constitutional document with the Bermuda Companies Registry, is it required to post to the Exchange website its consolidated constitutional document with the Bermuda Companies Registry?

Answer:

See response to Question 19C above.

FAQ Series 17, FAQ No. 19D
LR reference: Main Board Rules 13.90 / GEM Rules 17.102
Released on 19/12/2011 (Updated on 28/12/2018)

Question:

Will the Exchange be providing training on board diversity?

Answer:

Yes, the Exchange has provided a series of training on board diversity.

In March 2017, we launched a Director Training Webcast entitled “Duties of Directors and the Role and Functions of Board Diversity Policy” in which one of the topics is on board committees and board diversity.

In December 2018, we released a Directors’ ETraining webcast entitled “INEDs’ Role in Corporate Governance” which covered the board diversity topic.

In May 2021, we launched a webinar entitled “Creating Value with Board Diversity” with practitioners sharing their insights on the importance of a diverse boardroom and practical ways for achieving diversity.

In December 2021, we published the Guide which sets out guidance on board diversity policies, including gender diversity.

FAQ Series 17, FAQ No. 19F
LR reference: Main Board Rules 13.92 / GEM Rules 17.104
Released on 28/12/2018 (Updated on 01/01/2022)

Question:

Effective from 1 January 2022, the Exchange will not consider diversity to be achieved for a single gender board. What happens if an issuer already has directors of both genders on board on or after 1 January 2022 but subsequently fails to meet the requirement set out in the Rule, e.g. a particular director resigns?

Answer:

For an issuer who already has directors of both genders on board on or after 1 January 2022, if the issuer subsequently at any time has failed to meet any of the other requirements in the Rule, it must immediately publish an announcement containing the relevant details and reasons. The issuer must appoint appropriate members to the board to meet the requirement(s) within three months after failing to meet such requirement(s). The issuer may select the current headline category “Miscellaneous – Other – Corporate Governance Related Matter” when submitting the announcement for publication on the HKEXnews website.

FAQ Series 17, FAQ No. 19F(1)
LR reference: Main Board Rules 13.92 / GEM Rules 17.104
Released on 01/01/2022

Question:

Is it a Rule breach for issuers with single gender board on 1 January 2022?

Answer:

As mentioned in the Consultation Conclusions on Review of Corporate Governance Code & Related Listing Rules, and Housekeeping Rule Amendments, issuers with single gender board on 1 January 2022 will have a 3-year transitional period (as provided under the note to the Rule) to appoint at least a director of a different gender, while those who have made a commitment in the listing document with objectives set for implementing gender diversity should appoint at least a director of a different gender in accordance with such commitment.

After these issuers appointed a director of a different gender on or after 1 January 2022, and if they subsequently fail to meet the Rule requirement (e.g. a particular director resigns), they should follow the arrangement set out in FAQ No. 19F(1) above.

FAQ Series 17, FAQ No. 19F(2)
LR reference: Main Board Rules 13.92 and Note to 13.92 / GEM Rules 17.104 and Note to 17.104
Released on 01/01/2022

Question:

How will Hong Kong-incorporated issuers satisfy the Rules regarding disclosure of their memorandum and articles of association?

Answer:

For Hong Kong-incorporated issuers, reference to "memorandum and articles of association" in the Rules will be deemed to refer to their articles of association because under the New CO, provisions of the memorandum of association will be automatically deemed to be regarded as provisions of the issuer's articles of association.

FAQ Series 26, FAQ No. 17
LR reference: Main Board Rules 13.90 / GEM Rules 17.102
Released on 21/2/2014

Question:

Will Hong Kong-incorporated issuers need to amend and reprint their articles of association in order to incorporate the contents of their memorandum of association for the purposes of the Exchange's disclosure requirements?

Answer:

No.

FAQ Series 26, FAQ No. 18
LR reference: Main Board Rules 13.90 / GEM Rules 17.102
Released on 21/2/2014

Question:

Can an issuer adopt other guidelines instead of the ESG Reporting Guide ("ESG Guide")? Where an issuer adopts alternative reporting guidance or international standards with comparable provisions to the ESG Guide, is it required to give any explanation/reconciliation in relation to the ESG Guide?

Answer:

The ESG Guide sets out minimum parameters for reporting with a view to facilitating issuers' disclosure and communication with investors and other stakeholders. The issuer's board may consider adopting international standards or guidelines that are relevant to the issuer's industry or sector, such as the Global Reporting Initiative's Sustainability Reporting Standards, CDP's Climate Change Questionnaire and Water Security Questionnaire, Recommendations of the Financial Stability Board's Task Force on Climate-related Financial Disclosures, the Sustainability Accounting Standards Board's SASB Materiality Map®, the International Organization for Standardization’s Guidance on Social Responsibility, and the Corporate Sustainability Assessment for inclusion in the Dow Jones Sustainability Indices.

To avoid duplication, adopting international reporting standards or guidelines that contain comparable provisions to the ESG Guide should be sufficient compliance with the ESG Guide without the need for further explanation. However, issuers that report on international standards or guidelines should make clear which "comply or explain" provisions and recommended disclosures of the ESG Guide they are reporting on.

FAQ Series 18, FAQ No. 2
LR reference: Main Board Rules 13.91, Appendix 27 / GEM Rules 17.103, Appendix 20
Released on 31/8/2012 (Updated on 28/02/2020)

Question:

Whilst paragraph 5 of the ESG Guide states that the ESG Guide is organised into two ESG subject areas: Environmental and Social, and corporate governance is addressed separately in the Corporate Governance Code, the term "ESG" is defined in Main Board Rule 13.91(1) (GEM Rule 17.103(1)) as “environmental, social and governance”. Please clarify whether Main Board Rule 13.91(1) (GEM Rule 17.103(1)) and the ESG Guide cover corporate governance.

Answer:

Under the Listing Rules, the Exchange requires issuers to disclose environmental and social matters in ESG reports in accordance with the ESG Guide, and to disclose matters in relation to corporate governance in corporate governance reports in accordance with the Corporate Governance Code.

Issuers may however publish a combined corporate governance and ESG report if appropriate.

FAQ Series 18, FAQ No. 22
LR reference: Main Board Rules 13.91, Appendix 27 / GEM Rules 17.103, Appendix 20
Released on 28/02/2020

Question:

An issuer is required to issue an announcement on any proposed amendment to its memorandum or articles association. Is an issuer required to publish further announcements regarding adoption of such proposed amendments?

Answer:

No. However, issuers are encouraged to do so to promote transparency.

FAQ Series 1, FAQ No. 67
LR reference: Main Board Rule 13.51(1) / GEM Rule 17.50(1)
Released on 30/3/2004 (Updated in February 2020)