On 21 January 2011, the Stock Exchange published its Consultation Conclusions on proposals to amend the regime on Qualified Property Acquisitions (QPAs) in Chapter 14 of the Listing Rules. The amendments will come into effect on 1 February 2011. The key changes are:
- to extend QPAs to acquisitions by property developers of government land in the Mainland from a PRC governmental body through tender, auction or listing-for-sale governed by PRC law. Currently the QPA regime only applies to land or property development projects in Hong Kong acquired from Hong Kong Government entities through public auction or tender. Listed issuers may apply on a case-by-case basis for a waiver of the rules in respect of other land acquisitions in other jurisdictions. The revised Listing Rules set out factors which the Stock Exchange would consider in extending the QPA regime to other jurisdictions.
- to remove certain of the existing conditions to the QPA regime that have been impractical or burdensome in practice. For example, the requirement for an issuer to obtain an annual general mandate from shareholders before engaging in a QPA on a joint basis with a qualified connected person has been removed, as have the requirements with regard to the financing and profit distribution arrangements of joint ventures undertaking a QPA.
- to require disclosure of information relating to joint ventures formed for QPAs in the announcement and circular for the QPA. This is in addition to the current requirement that such information is contained in the annual report.
- to exempt QPAs from the requirement to produce a property valuation report.