On 4 May 2018, The Stock Exchange of Hong Kong Limited (Exchange) released its conclusions from responses to its Consultation Paper on Capital Raisings by Listed Issuers published in September 2017 proposing Listing Rule changes to address potential abuses related to large scale deeply discounted capital raising activities and specific issues concerning other capital raising and share issuance transactions (see our previous client alert of 27 September 2017).

The Exchange noted strong support for its proposals and decided to implement them with minor modifications. The Listing Rule amendments will become effective on 3 July 2018.

The table below summarises the key changes to the Listing Rules:

Click here to view the table.


Upon the Listing Rules amendments becoming effective on 3 July 2018, listed issuers should carefully structure their capital raising activities, and in particular, they should bear in mind the 25% threshold when determining the price discount and offer ratio.

Issuers should consult the Exchange before they announce rights issues, open offers or specific mandate placings that may trigger the 25% threshold. Issuers should also note that the Exchange may exercise its discretion to withhold approval for, or impose additional requirements on, any rights issue, open offer or specific mandate placing that does not trigger the 25% threshold if in the opinion of the Exchange, such issue is, having regard to its terms, inconsistent with the general principles of the listing.