Hong Kong Capital Markets Update – Issue 2, March 2023

On 24 February 2023, the Stock Exchange of Hong Kong Limited (the “Exchange”) published a consultation paper (“Consultation”) on rule amendments following recent updates and changes to Chinese Mainland regulations and other proposed rule amendments relating to PRC issuers. The deadline for submissions is 24 March 2023.

Following the implementation of New Regulations, consequential amendments will be made to Chapter 9, Chapter 19A and Appendix 13D of the Main Board Listing Rules (and the equivalent GEM Listing Rules). The Exchange considers these consequential amendments would not compromise protection of H shareholders of PRC issuers.

In this Consultation, the Exchange proposed the following consequential listing rule amendments and other proposed listing rule amendments including:

1. Remove the class meeting and related requirements for issuance and repurchase of shares by PRC issuers;
2. Remove the requirements for disputes involving H shareholders to be resolved through arbitration;
3. Remove the requirements for PRC issuers’ articles of association to include the Mandatory Provisions and other ancillary provisions; 
4. Amend the documentary requirements for new listing applications to reflect Chinese Mainland’s new filing requirements for overseas listings of Chinese Mainland companies;
5. Allow the limits on general mandate for new share issuance and scheme mandate for share schemes to be calculated with reference to a PRC issuer’s total issued shares (instead of each of domestic and H shares);
6. Remove the requirements for directors, officers and supervisors of PRC issuers to provide undertakings to the issuers and their shareholders to comply with the PRC Company Law and the articles of association; 
7. Align minor requirements on compliance advisers for PRC issuers with those for all issuers; and
8. Remove certain requirements for PRC issuers relating to (i) online display or physical inspection of documents and (ii) disclosure in listing documents of new applicants.