On 24 April 2018, The Stock Exchange of Hong Kong Limited (the “Exchange”) published the consultation conclusions and announced the new rules to: (a) permit listings of companies with weighted voting right (“WVR”) structures; (b) establish a new concessionary secondary listing route for Greater China and international companies that wish to secondary list in Hong Kong; and (c) permit listings of biotech companies that do not meet any of the Main Board financial eligibility tests.
The new rules broadly follow the proposals set out in the consultation paper published in February 2018 (see our client alert of 5 March 2018), with a few amendments to reflect comments from consultation respondents on certain details. The new rules have come into effect on 30 April 2018, from which date companies seeking to list under the new rules may submit formal listing applications to the Exchange.
This client alert gives you a quick summary of the key points of the new Chapter 19C of the Main Board Listing Rules (as supplemented by the Exchange’s Guidance Letter HKEX-GL94-18) which sets out additional requirements and modifications to existing rules for the new concessionary secondary listing route for issuers (“Qualifying Issuers”) primary listed on the New York Stock Exchange LLC, Nasdaq Stock Market or the Main Market of the London Stock Exchange plc (and belonging to the UK Financial Conduct Authority’s “Premium Listing” segment) (each a “Qualifying Exchange”).
Suitability criteria and other conditions / qualifications for the new concessionary secondary listing route
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Different requirements / concessions depending on whether the Qualifying Issuer has a centre of gravity in Greater China and whether it was primary listed on a Qualifying Exchange on or before 15 December 2017
See below a table summarising the application of requirements and concessions for three types of Qualifying Issuers: (a) Greater China issuers that were primary listed on a Qualifying Exchange on or before 15 December 2017 (“Grandfathered Greater China Issuers”); (b) those that were primary listed on a Qualifying Exchange afterwards (“Non-Grandfathered Greater China Issuers”); and (c) non-Greater China issuers:
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Applicability of the Codes on Takeovers and Mergers and Share Buy-backs (the “Codes”)
The Codes have been amended with effect from 30 April 2018 to reflect that a Grandfathered Greater China Issuer with a secondary listing on the Exchange will not normally be regarded as a public company in Hong Kong under the Codes and therefore the Codes do not apply to it, but where the bulk of trading in its migrates to Hong Kong such that it would be treated as having a dual-primary listing in Hong Kong, the Codes will apply to it.
An applicant applying for secondary listing under Chapter 19C at the time of filing its listing application may make a confidential filing of its Application Proof.