On 24 March 2023, The Stock Exchange of Hong Kong Limited (the “Exchange“) published the consultation conclusions (the “Consultation Conclusions”) on the listing regime for Specialist Technology Companies on the Main Board of the Exchange under the new Chapter 18C of the Main Board Listing Rules.  The new Chapter 18C, together with the guidance letter on Specialist Technology Companies (GL115-23) (the “Guidance Letter”), came into effect on 31 March 2023.

For more information, please refer to our article.

In the recent case of Chen Wencan and Another v. Secretary For Justice and Another[1], the Court of First Instance (CFI) has dismissed a judicial review application against the Securities and Futures Commission (SFC) relating to restriction notices issued in an ongoing investigation into a suspected “ramp-and-dump” scheme. The Applicants contended that the restriction notices issued by the SFC under sections 204(1)(a) and 205(1) of the Securities and Futures Ordinance (SFO) to freeze their assets in various trading accounts held with certain licensed corporations on the basis of section 207(e) of the SFO was unconstitutional as it (i) was not prescribed by law and (i) was a disproportionate interference with their property rights.

The CFI noted in this judicial review that similar issues had been dealt with earlier in the case of Tam Sze Leung and Others v Secretary for Justice and Another[2]. The CFI is not persuaded that there are any significant differences raised by the Applicants which point to any reason why a different view should be taken. The below is the summary of the court’s reasoning in Tam Sze Leung:

• Whilst the court agreed that the relevant administrative intervention powers granted to the SFC are highly intrusive to the individual’s property rights under articles 6 and 105 of the Basic Law, the court came to the overall conclusion that sections 204 and 205 when invoked on the basis of section 207(e) of the SFO satisfy the “prescribed by law” requirement as there is (i) sufficient clarity as to the scope and manner to exercise these powers and (ii) sufficient legislative safeguards (e.g. review mechanism in the Securities and Futures Appeals Tribunal and judicial review) to prevent abuses.
• The restriction or limitation from the exercise of powers under sections 204 and 205 is on balance no more than is necessary to accomplish the legitimate aim of the protection of investors and the public interest and strikes a reasonable balance between the societal benefits of the encroachment and inroads made with the constitutionally protected rights of the individual and does not result in an unacceptably harsh burden on the individual.

To conclude, albeit restriction notices are (i) issued against the licensed corporation (as the subject of the restriction) which is not accused of any wrongdoing and (ii) highly intrusive to the individual’s property rights, the recent judgment reaffirms the SFC statutory powers to issue restriction notices, in allowing the SFC to serve the important function of protecting the investors and the public interest.

[1] [2023] HKCFI 796; See https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=151339&currpage=T.

[2] [2022] HKCFI 2330; See https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=147488&currpage=T.

On 1 June 2023, the new regulatory regime for virtual asset trading platform (“VATP“) operators will come into effect, whereby all operators of centralised VATPs carrying on business in Hong Kong or actively marketing their services to Hong Kong investors need to be licensed by the Securities and Futures Commission (the “SFC“) under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) (the “New AMLO Regime“).  To prepare for this upcoming New AMLO Regime, the SFC consulted the public on its proposed regulatory requirements for VATP operators.

For more information, please refer to our article.

MinterEllison has collaborated with the Fresh Fish Traders’ School’s (FFTS) once again by sponsoring a Chinese New Year Card Design Competition. The winning design had been used as our greeting card for clients. This is one the ways MinterEllison gives back to the community, and the participating students have received supermarket and book vouchers as a token of appreciation.

Our Partner Katherine U, Associate Thomas Sham along with other Community Investment Committee members attended the awards ceremony held at FFTS on 31 March 2023. We are very pleased to be able to meet and present the prizes to the talented students in person after two years since the pandemic started.

The Immigration (Advance Passenger Information) Regulation (“Regulation“) made under section 6A of the Immigration Ordinance (Cap. 115) has been gazetted on 24 March 2023 and has been tabled at the Legislative Council for negative vetting on March 29, which seeks to provide legal backing for implementation of the Advance Passenger Information (“API“) system in Hong Kong, requiring airlines to provide travellers’ personal data to the Immigration Department (“ImmD“) in Hong Kong before the flights arrive in Hong Kong (thus will not affect the flights departing from Hong Kong).

By way of background, in 2018, under the updated Convention on International Civil Aviation (“CICA“) implemented by the International Civil Aviation Organization (“ICAO“) which is applicable to Hong Kong, each Contracting State is required to establish the API system, i.e. an electronic communications system whereby personal data of travellers (i.e. API data such as the traveller’s name, date of birth, nationality and travel document information) and their respective aircraft information (such as the scheduled date and time of departure and flight number of the aircraft) are collected and transmitted by the airline concerned to the border control agency prior to/after flight departure, so that the border control agency can immediately conduct a risk assessment of border security for issuing boarding directions in respect of the travellers.

The aim of this Regulation is to enable Hong Kong as an international aviation hub to meet the requirement and recommendations of the ICAO, as well as to facilitate the ImmD to further enhance its passenger clearance and enforcement capabilities to prevent undesirables, including potential non-refoulement claimants, from boarding flights heading to Hong Kong.

The Regulation (except for the parts relating to offences, penalty and defence) is set to be rolled out by phases alongside the roll-out of the API system in the third quarter of 2024.