On 31 March 2021, The Stock Exchange of Hong Kong Limited (Exchange) published a consultation paper seeking public feedback on its proposals to enhance and streamline the existing listing regime for overseas issuers, including proposals to:
Consultation period will end on 31 May 2021.
The key proposals are summarised below:
Shareholder protection standards
The Rules Governing the Listing of Securities on the Exchange (Listing Rules) require an overseas issuer to demonstrate that its jurisdiction provides shareholder protection standards at least equivalent to those of Hong Kong.
Issuers incorporated in Bermuda, the Cayman Islands and the PRC (together, Recognised Jurisdictions) are regarded as meeting this requirement as long as they amend their constitutional documents in accordance with the respective parts in Appendix 13 to the Listing Rules to make up for the shortfalls in the shareholder protection standards of the relevant jurisdiction.
Other than the Recognised Jurisdictions, the Exchange has accepted 28 jurisdictions as an issuer’s place of incorporation eligible for listing in Hong Kong (Acceptable Jurisdictions) as they meet the shareholder protection standards set out in the joint policy statement regarding the listing of overseas companies first published jointly by the Exchange and the Securities and Futures Commission in 2007 (last amended on 30 April 2018) (JPS).
In addition, all issuers (except for Grandfathered Greater China Issuers and Non-Greater China Issuers) must ensure that their constitutional documents conform with the provisions set out in Appendix 3 to the Listing Rules, which contain additional shareholder protection standards that the Exchange considers necessary.
The Exchange proposes to streamline the shareholder protection standards that issuers are required to provide into one common set of 14 core shareholder protection standards (Core Standards) for all issuers. Accordingly, the concepts of “Recognised Jurisdictions” and “Acceptable Jurisdictions” will be removed.
The Core Standards will cover the most fundamental shareholders’ rights relating to the notice and conduct of shareholders’ meetings, approval of important matters, members’ right to requisition a meeting, remove directors, vote, speak and appoint proxies/corporate representatives, auditors, appointment of directors to fill casual vacancies and inspection of shareholders’ register, etc. which are based on standards set out in the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) or already required under the Listing Rules.
Dual primary listing
Grandfathered Greater China Issuers and Non-Greater China Issuers with WVR structures not in compliance with Chapter 8A of the Listing Rules and/or VIE structures not in compliance with HKEX Listing Decision LD43-3 (Non-compliant WVR and/or VIE structures) cannot retain such structures while applying for dual primary listing directly.
Grandfathered Greater China Issuers and Non-Greater China Issuers with Non-compliant WVR and/or VIE Structures may apply directly for a dual primary listing while retaining the Non-compliant WVR and/or VIE Structures, as long as they meet the eligibility and suitability requirements of Chapter 19C of the Listing Rules for issuers with a WVR structure.
These issuers would need to have a track record of good regulatory compliance, of at least two full financial years on a Qualifying Exchange, and meet the higher minimum market capitalisation requirements applicable to an applicant with WVR. They would also be required to meet all other initial and ongoing requirements applicable to a primary listing (e.g. notifiable and connected transactions) as well as complying with the requirements that they are already subject to, under the laws and rules of their overseas primary listing jurisdiction.
|Less restrictive requirements for Greater China Issuers seeking a secondary listing on the Exchange
|Greater China Issuers without WVR structure seeking a secondary listing must: – demonstrate that they are “Innovative Companies” ; and – have a minimum market capitalisation at listing of HK$40 billion (or HK$10 billion with revenue of HK$1 billion in the most recent audited financial year)
|Greater China Issuers without WVR structure seeking a secondary listing: – are no longer required to be “Innovative Companies”; and – have the option of meeting a minimum market capitalisation at listing of either (i) HK$3 billion (if the issuer has a track record of good regulatory compliance of at least five full financial years on a Qualifying Exchange); or (ii) HK$10 billion (if the issuer has a track record of good regulatory compliance of at least two full financial years on a Qualifying Exchange)
|Codification and consolidation of requirements
|There are currently two routes to secondary listing on the Exchange: – the JPS (only available to overseas issuers that do not have a centre of gravity in Greater China); and – Chapter 19C of the Listing Rules
|Codification and consolidation of requirements of the two routes into Chapter 19C of the Listing Rules
|Waivers of general effect granted by the Exchange to issuers seeking a secondary listing on the Exchange (where no waiver application is required) set out in the JPS or exceptions to the Listing Rules as set out in Chapter 19C of the Listing Rules (Automatic Waivers)
|Eligibility requirements for Automatic Waivers under the JPS: – listing on a Recognised Stock Exchange – five years’ good compliance record – minimum expected market capitalisation of US$400 million (approximately HK$3.1 billion) (For Greater China issuers only) if the majority of trading in a Greater China Issuer’s listed shares migrates to the Exchange’s markets on a permanent basis, the Exchange will regard the issuer as having a dual primary listing and consequently the Automatic Waivers will no longer apply to such issuer (Trading Migration Requirement)
|Codification of eligibility requirements for Automatic Waivers under the JPS with minor modifications: – the compliance record requirement changed from “five years” to “five full financial years” – the minimum expected market capitalisation requirement changed to HK$3 billion All secondary listed issuers are subject to the Trading Migration Requirement
|De-listing from the stock exchange on which the secondary listed issuer is primary listed
|The Listing Rules are silent on: – the application of Automatic Waivers; or – whether a Grandfathered Greater China Issuer or a Non-Greater China Issuer can retain its Non-compliant WVR and/or VIE Structures, if the issuer de-lists from the overseas exchange on which it was primary listed
|An issuer will be regarded as having a primary listing on the Exchange upon its de-listing from the stock exchange on which it is primary listed The Exchange may, on a case by case basis, exercise its discretion to grant a time-relief waiver, suspend trading of the issuer’s shares or impose other measures as it considers necessary for the protection of investors and the maintenance of an orderly market A Grandfathered Greater China Issuer or a Non-Greater China Issuer is allowed to retain its Non-compliant WVR and/or VIE Structures (subsisting at the time of its secondary listing in Hong Kong) if it de-lists from the Qualifying Exchange on which it is primary listed
 “Overseas issuers” includes issuers which are not incorporated or otherwise established in Hong Kong or the People’s Republic of China (PRC).
 “Qualifying Exchange” means the New York Stock Exchange LLC, NASDAQ Stock Market or the Main Market of the London Stock Exchange plc (and belonging to the UK Financial Conduct Authority’s “Premium Listing” segment).
 “Innovative Company” is a company that the Exchange considers to have demonstrated the relevant characteristics set out in HKEX Guidance Letter GL94-18.
 “Recognised Stock Exchange” is the main market of a stock exchange the Exchange has recognised as being one where the shareholder protection standards are at least equivalent to those provided in Hong Kong as set out under the JPS. The Qualifying Exchanges are also Recognised Stock Exchanges.
除认可司法权区外，联交所已接纳28个司法权区（「获接纳司法权区」），由于该等司法权区提供了《有关海外公司上市的联合政策声明》（于 2007 年首次由联交所和证券及期货事务监察委员联合发布，及上一次修订日期为 2018 年 4 月 30 日）（《联合政策声明》）所载的股东保障标准，于该等司法权区注册成立的发行人可申请来香港上市。
有关的核心水平涵盖了大部分有关股东会议的通知及进行、批准重大事项、股东召开会议、罢免董事、投票、发言及委任投票代表／公司代表及核数师的权利、委任董事以填补临时空缺以及查看股东名册等的基本股东权利，并以香港法例第 622 章《公司条例》所载的标准为基础或已包括在《上市规则》内。
采用不符合《上市规则》第八A 章相关规定的不同投票权架构及／或不符合香港交易所上市决策 LD43-3 相关规定的可变利益实体结构（「不合規的不同投票权架构及／或可变利益实体结构」）的获豁免的大中华发行人及非大中华发行人不能保留相关架构而同时直接申请双重主要上市。
|无不同投票权架构的大中华发行人寻求第二上市时必须：- 证明其为「创新产业公司」；及-于上市时市值至少达 400 亿港元（或至少100亿港元而最近一个经审计会计年度的收益至少 10 亿港元）
|无不同投票权架构的大中华发行人寻求第二上市时：- 毋须证明其为「创新产业公司」；及-可选择上市时其市值至少达(i) 30亿港元（若有关发行人于合资格交易所有五个完整会计年度的良好监管合规纪录）或(ii) 100 亿港元（若有关发行人于合资格交易所有两个完整会计年度的良好监管合规纪录）
|目前发行人可透过两种途径在联交所作第二上市：- 《联合政策声明》（只限业务并非以大中华为重心的海外发行人）；及-《上市规则》第十九C 章
|《联合政策声明》所载联交所向寻求在联交所作第二上市的公司所授予的一般效力豁免（公司毋须申请豁免）或根据《上市规则》第十九 C 章给予该等公司的豁免（「自动豁免」）
|《联合政策声明》自动豁免的资格规定：- 在认可证券交易所上市- 五年良好合规纪录- 预期市值达4 亿美元（约31 亿港元）或以上（仅就大中华发行人而言）若大中华发行人的上市股份交易已大部分永久转移到联交所市场，联交所即视该发行人犹如双重主要上市，故自动豁免亦立即不再适用于有关发行人（「交易转移规定」）
|《联合政策声明》自动豁免的资格规定稍加修改再编纳成规：- 将合规纪录规定由「五年」改为「五个完整会计年度」- 预期市值规定由至少4亿美元改为至少 30亿港元所有第二上市发行人都须符合交易转移规定
|《上市规则》并无明文规定，若第二上市发行人从主要上市的证券交易所除牌:- 有关自动豁免之应用；或- （就获豁免的大中华发行人或非大中华发行人而言）可否保留其不合规的不同投票权及／或可变利益实体结构
|发行人从其主要上市的证券交易所除牌后，将被视为在联交所具有主要上市地位 联交所可按个别情况行使酌情权，给予宽限期豁免、将发行人证券短暂停牌或采取其认为必要的其他措施，以保护投资者及维持有秩序的市场 获豁免的大中华发行人或非大中华发行人若从主要上市的合资格交易所除牌，其可保留其（在来港第二上市时已存在的）不合规的不同投票权及／或可变利益实体结构