Introduction

In July 2021, the Stock Exchange of Hong Kong Limited (the “Stock Exchange”) rolled out the paperless listing regime, requiring all listing documents in a new listing to be published solely in an electronic format and new listing subscriptions to be made through online electronic channels only. However, there are still a number of documents required to be submitted or disseminated in paper form during the listing application process and after listing.

In December 2022, with a view to expanding the paperless listing regime, the Stock Exchange published a consultation paper (the “Consultation Paper”) proposing the following major amendments to the Listing Rules:

1.       reducing the number of documents required to be submitted to the Stock Exchange and mandating submission by electronic means;

2.       mandating electronic dissemination of corporate communications to securities holders by listed issuers after listing; and

3.       restructuring the Appendices to the Listing Rules.

Reducing the number of documents required to be submitted
 to the Stock Exchange and mandating submission by electronic means

In the Consultation Paper, the Stock Exchange proposes to:

1.       remove the following types of submission documents:

a.       undertakings or confirmations to comply with requirements that are already set out in the Listing Rules or Guidance Materials (e.g. undertakings from compliance advisers);

b.       documents providing information that overlaps with existing or proposed disclosure requirements for listing documents, announcements or annual/ interim reports;

c.       copies of documents that are already required, or proposed to be required, to be published or displayed on the Stock Exchange’s website (e.g. listing documents, expert consent letters and expert opinions in respect of debt or structured products);

d.       documents evidencing the accuracy of information contained in other submissions (e.g. documents evidencing due incorporation of an issuer);

e.       documents evidencing the due authorisation of an issuer’s actions (e.g. various directors’ or shareholders’ resolutions of issuers);

f.        documents evidencing the performance of sponsor due diligence and other obligations; and

g.       documents which are otherwise no longer required;

2.       codify undertakings, confirmations, declarations and listing agreements;

3.       remove the directors’ undertaking form requirements after codifying the directors’ and supervisors’ obligations into the Listing Rules;

4.       include in the Form A1 a consolidated set of overarching obligations to be undertaken by new applicants and sponsors;

5.       consolidate the requirement for the personal particulars of directors or supervisor in the Personal Details Form;

6.       remove signature and certification requirements for:

a.       Form M111;

b.       e-Form M112;

c.       e-Form M201;

d.       a certified copy of the document issued by the China Securities Regulatory Commission or other PRC competent authority expressly approving the PRC issuer’s listing on the Stock Exchange; and

e.       a certified copy of the signed deposit agreement for listing of depositary receipts;

7.       mandate all submissions to be made via electronic means unless otherwise specified in the Listing Rules or required by the Stock Exchange; and

8.       remove any requirement for submission of multiple copies of the same document.

 

To facilitate electronic submission and two-way communication between the Listing Division and new applicants and listed issuers, the Stock Exchange plans to establish a new online platform which enables electronic signature.

The Stock Exchange will also explore the feasibility of digitalizing prospectus authorization and registration processes. The Stock Exchange considers mandating issuers or their advisers to electronically submit (1) copies of the prospectus signed by the directors or their authorized agents with their digital signatures and (2) copies of the accompanying documents certified as true copies with digital signatures of the issuer’s solicitors. The certificate of authorisation and the authorized prospectus documents will then be signed or certified by the Stock Exchange with their digital signatures so that such documents can be electronically provided to the issuer for its onward electronic submission to the Companies Registry for registration.

 

Mandating electronic dissemination of corporate communications
 to securities holders by listed issuer after listing

The second major proposal aims to reduce post-listing dissemination of corporate communications to securities holders in paper form. The Stock Exchange proposes to:

1.       mandate that listed issuers must disseminate corporate communications to their securities holders electronically to the extent permitted by the laws and regulations applicable to them and their constitutional documents;

2.       remove from the Listing Rules the provisions on mandatory arrangements a listed issuer must make to avail itself of the current consent mechanism for disseminating corporate communications electronically; and

3.       require issuers to specify on their website the manner in which corporate communications would be sent or otherwise made available to the holders of their securities.

 

The issuers must however send corporate communications in printed form to a securities holders upon request and disclose on its website the relevant arrangements for holders to make hardcopy requests.

In respect of corporate communications that seek instructions from securities holders on how they wish to exercise their rights, issuers must send them to securities holders individually and would not be able to satisfy the requirements by publishing the same on their website and the Stock Exchange’s website only.

Restructuring the Appendices to the Listing Rules

The Stock Exchange noted the difficulty for users to navigate the Appendices to the Listing Rules and proposes to:

1.       include the following documents as Listing Rules but not as Appendices to the Listing Rules:

a.       forms and declarations that contain significant provisions and/or mandatory

requirements, including Listing Application Forms, Formal Applications, Marketing Statements and declarations by the Issuer and Sponsor; and

b.       Listing Fees, Levies and Trading Fees on New Issues and Brokerage;

2.       reorganize by theme the appendices that set out significant provisions, mandatory requirements or fees;

3.       repeal appendices that are administrative in nature and display them separately under “Rules and Guidance” on the Stock Exchange’s website; and

4.       delete appendices which are superseded, repealed or unnecessary to be set out in the Listing Rules.

Other miscellaneous amendments

The Stock Exchange also proposes to remove the requirement for physical attendance by Listing Committee or Listing Review Committee members for satisfying the quorum requirements for those committee meetings.

Takeaway

The Stock Exchange’s current proposal signifies another major step for the Hong Kong listing regime to go paperless and digitalised in line with the global trend. It is hoped that these initiatives can improve the efficiency of the Hong Kong listing regime and enhance the administrative process of those potential listing applicants.

 

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Important: The law and procedure on this subject are very specialised and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.

Published by ONC Lawyers © 2023