Hong Kong Exchanges and Clearing Limited has recently published a consultation paper on proposed changes to the Main Board Listing Rules and the GEM Listing Rules regarding connected transactions.
The proposals comprise the following:
- Revisiting whether the definition of "connected person" should include a person connected at the issuer’s subsidiary level; or alternatively whether to provide an exemption for the person who is connected only by virtue of his relationship with an issuer's subsidiary whose size is "insignificant" to the issuer
- Revising the de minimis thresholds that trigger disclosure or shareholders' approval requirements for connected transactions
- Modifying or introducing certain exemptions for connected transactions that are revenue in nature in specific circumstances
- Revising the definition of "associate" to (i) exclude persons who may not be in positions to exercise significant influence over the issuer; and (ii) include a company in which a connected person's relative has a majority control
- Refining the circumstances in which an issuer’s non wholly-owned subsidiary should be regarded as a connected person
- Revising the definition of "connected person" to exclude (i) promoters for PRC (Mainland China) issuers; and (ii) "PRC Governmental Body" for non-PRC issuers (the current exemption only applies to PRC issuers)
- Modifying or clarifying the application of certain exemptions for connected transactions
- Removing the references to "management shareholder" in the GEM Listing Rules
For more information and to view the full text of the consultation paper, please click on the following hyperlink: http://www.hkex.com.hk/news/hkexnews/0910022news.htm.