Following PRC regulation amendments announced by the China Securities Regulatory Commission (the “CSRC”) in February 2023, the Stock Exchange of Hong Kong Limited (the “Exchange“) has issued consultation paper in February 2023.
On 21 July 2023, the Exchange published consultation conclusions on Listing Rules amendments following PRC regulation updates and other proposed rules amendments for PRC issuers. The Exchange has adopted all the proposals outlined in the consultation paper with minor modifications.
The Exchange amended the Listing Rules following the consultation conclusions. Such amendments took effect on 1 August 2023, and have the following effect:
I. Rule amendments in response to the PRC regulation updates
- Remove the class meeting requirements for the issuance and repurchase of shares by PRC issuers;
- Remove the requirements of using arbitration to resolve H shareholders disputes;
- Remove the requirements for PRC issuers’ articles of association to include the Mandatory Provisions and other ancillary provisions (which require PRC issuers to (i) deem holders of domestic shares and H shares as different classes of shareholders; and (ii) use arbitration to resolve disputes involving H shareholders); and
- Amend the documentary requirements for new listing applications to reflect the PRC’s new filing regime for all direct and indirect overseas listings by Mainland-based companies.
II. Other rule amendments
- Set the limits on (a) general mandate for issuance of new shares at 20% of the total issued shares of a PRC issuer; and (b) scheme mandate for share schemes in each case, at 10% of the total issued shares of a PRC issuer (instead of referencing to each of domestic shares and H shares);
- Remove the requirements for directors, officers and supervisors of PRC issuers to provide undertakings to the issuers and their shareholders to comply with the PRC Company Law and the articles of association;
- Align minor requirements on compliance advisers under Chapter 19A (for PRC issuers) with those in Chapter 3A (for all issuers); and
- Remove certain requirements in Chapter 19A relating to (a) online display or physical inspection of documents and (b) disclosure in listing documents of new applicants.
Please note that a PRC issuer must still comply with its existing articles of association until the amendments to such articles of association (reflecting the above) become effective. In this regard, PRC issuers should still obtain approvals from domestic shareholders and H shareholders at separate class meetings to amend their articles of association.