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The Stock Exchange of Hong Kong Limited ("Exchange") has published a consultation paper ("Consultation Paper") seeking market feedback on the proposed Listing Rules amendments to, among other things: (a) streamline the listing regime for overseas issuers which are incorporated outside of Mainland China (PRC) and Hong Kong ("Overseas Issuers"), including those with a centre of gravity in Greater China; (b) allow Grandfathered Greater China Issuers and Non-Greater China Issuers (as defined below) to dual-primary list while retaining their existing noncompliant weighted voting right (WVR) structures and/or variable interest entity (VIE) structures; and (c) expand the secondary listing regime to welcome Overseas Issuers without any WVR structure in traditional sectors. The consultation will close on 31 May 2021.
Click here to access the Chinese version.
1. Shareholder protection standards
(i) a recognised jurisdiction, namely, Bermuda, the Cayman Islands and the PRC ("Recognised Jurisdiction(s)"). Issuers incorporated in these jurisdictions are regarding as meeting the Equivalence Requirement as long as they amend their constitutional document to comply with the applicable provisions of Appendix 13 to the Listing Rules to make up for the shortfalls in the shareholder protection standards of the relevant jurisdiction; or
(ii) an acceptable jurisdiction. Upon application by an Oversea Issuer and approval by the Exchange, a jurisdiction outside of the Recognised Jurisdictions providing the key shareholder protection standards and meeting the regulatory co-operation requirement ("Regulatory Co-operation Requirement") set out under the JPS will be regarded as an acceptable jurisdiction ("Acceptable Jurisdiction(s)"). There are currently 28 Acceptable Jurisdictions.
2. Dual primary listing of Grandfathered Greater China Issuers and Non-Greater China Issuers with Non-compliant WVR and/ or VIE Structures
3. Co-existence of two secondary listing regimes
(a) the compliance record requirement changed from “five years” to “five full financial years”; and
(b) the minimum expected market capitalisation requirement changed from USD 400 million to HKD 3 billion.
4. Secondary listing requirements for Overseas Issuers with a centre of gravity in Greater China
(a) HKD 3 billion if it has a track record of good regulatory compliance of at least five full financial years on a Qualifying Exchange; or
(b) HKD 10 billion if it has a track record of good regulatory compliance of at least two full financial years on a Qualifying Exchange.
5. Delisting of a secondary listed issuer from the overseas exchange of primary listing
For further information and to discuss what this development might mean for you, please get in touch with our lawyers set out under the "Contact Information" or your usual Baker McKenzie contact.
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