Hong Kong Stock Exchange consults on paperless IPO and online display of documents

On 24 July 2020, The Stock Exchange of Hong Kong Limited (Exchange) published a consultation paper seeking public feedback on proposals to introduce a paperless listing and subscription regime, online display of documents and a reduction of the types of documents on display.

Fully paperless IPO regime

The Exchange proposes to amend the Listing Rules to require all new listing documents to be published solely in an electronic format, and new listing subscriptions to be made through online electronic channels only, except for those issuers adopting Mixed Media Offer.

For equity / collective investment scheme public offerings, prospective public subscribers would only have the option to apply through the following electronic channels: (i) eIPO service provider’s online platform, or (ii) CCASS EIPO service.

There would be no change of the existing subscription channels for preferential offerings (such as employee offerings and assured entitlements offerings to qualified shareholders), nor the well-established channels of subscription for public offering of debt securities or investments in structured products listed under Chapter 15A of the Main Board Listing Rules.

Documents to be displayed online

The Exchange also proposes to replace the current Listing Rule requirement that issuers display various documents for physical inspection with the requirement for issuers to publish these documents online for the same period of time as they are currently required to make them available for physical inspection.

Issuers would be required to publish these documents on both the Exchange’s website and on the issuer’s website.

Reduction of documents on display for notifiable transactions and connected transactions

With respect to notifiable transactions and connected transactions, the Exchange proposes that the relevant documents on display should be limited to the contracts and expert reports relating to the subject transactions, and accordingly it proposes to remove the current requirements to display:

• other material contracts (not being contracts entered into in the ordinary course of business) entered into by the issuer within the last two years and certain directors’ service contracts as they are not directly related to the transactions that are the subject of the circulars; and
• issuers’ constitutional documents, audited accounts and previously published transaction circulars as these documents are already published and available on the Exchange’s website and the issuers’ websites.

Other paperless initiatives

The Exchange also plans to implement a number of paperless initiatives, including the introduction of e-Forms, an online-only rule book and the promotion of electronic communication with the Exchange.

Consultation period will end on 24 September 2020.