The Stock Exchange of Hong Kong Limited (SEHK) has announced the publication of a consultation paper seeking feedback on its proposals to review SEHK’s listing regime for debt issues to professional investors only (the Professional Debt Regime).

The current Professional Debt Regime was introduced in 2011, with the aim of bringing Hong Kong in line with the requirements of comparable stock exchanges in relation to the listing of debt securities offered to professional investors only. SEHK adopted a “light-touch approach” under the Professional Debt Regime, which has no prescribed disclosure requirements, and vetting by SEHK is limited to the fulfilment of eligibility requirements and the inclusion of the prescribed disclaimer and certain statements.

In light of market developments in recent years, SEHK is putting forward a number of proposals for market consultation that seek to balance the need to safeguard investors while maintaining an effective and appropriate listing platform for the continued development of the bond market in Hong Kong.

Key proposals:

  • raising the existing issuer’s minimum net assets requirement from HK$100 million to HK$1 billion
  • introducing a minimum issuance size of HK$100 million
  • requiring issuers to state explicitly in the listing document that the intended investor market in Hong Kong is for professional investors only
  • requiring publication of listing documents on SEHK’s website on the listing date
  • allowing disclosure guidance on certain special features in Chapter 37 debt securities and other disclosure-related matters
  • introducing other rules amendments to enhance the regulatory oversight of issuers and guarantors in terms of their continuing obligations

The deadline for responding to the consultation paper is February 7, 2020.