Background

On 5 June 2020, The Stock Exchange of Hong Kong Limited (the “Exchange”) published two listing decisions¹ (collectively, the “Listing Decisions”) to provide guidance on the reasons that the Exchange rejected certain listing applications. In 2019, the Exchange rejected 18 listing applications (comprising 6% of the total listing applications in 2019) and returned 4 listing applications (as compared to nil for 2018). It was acknowledged that the percentage of listing applications rejected remains stable.

In this newsletter, we will provide (1) a summary on the reasons for rejection and return of listing applications; and (2) an outline of certain requirements on financial information to be submitted together with the listing application so as to constitute a substantially complete listing application.

Rejected Listing Applications

Rejected listing applicants failed to meet the requirements of the Exchange in the vetting process in terms of suitability and eligibility. In particular, a higher level of scrutiny is placed on the applicant’s commercial rationale in order to evaluate whether the applicant has a genuine need for funding. Where the Exchange has reason to believe that the applicant is listing for a purpose other than the development of its underlying business or assets, or that the company’s scale no longer justifies the costs or purposes associated with a public listing, it may lead to rejection of its listing application.

Please refer to the table below for a summary of the Exchange’s reasons of rejection of listing applications:

Returned Listing Applications

Furthermore, in the event where a listing applicant submits a listing application which the Exchange decides is not substantially complete, the Exchange will suspend the vetting process and return all submitted documents to the sponsor. Insufficient financial information included in accountants’ reports and/or profit forecast memorandum submitted for a listing application would likely lead to the return of the listing application.

Applicable Rules and Guidance

An applicant is required to submit a listing application form, an application proof and all other relevant documents, and the information therein must be substantially complete, except in relation to information that by its nature can only be finalised and incorporated at a later date². Additionally, the accountants’ report submitted together with the listing application must include consolidated results for each of the three financial years (two financial years for GEM applicants) immediately preceding the issue of the listing document³, and such latest financial period reported on by the reporting accountants must not have ended more than six months before the date of issue of the listing document⁴.

HKEX Guidance Letter HKEX-GL25-11 provides that the Exchange may grant waivers from strict compliance with the aforementioned rules provided that the applicant will list on the Main Board within three months (or will list on GEM within two months) after the latest financial year end. HKEX Guidance Letter HKEX-GL56-13 provides the conditions and examples of when the Exchange will accept an application proof with an accountants’ report covering a period shorter than as required under the Main Board Listing Rules or GEM Listing Rules.

In determining whether the financial information included in an application proof is substantially complete, the Exchange would take into account the applicant’s proposed listing date to determine the relevant track record period (“TRP”) for which the accountants’ report should be included in the application proof of the prospectus.

Financial Information Requirements

The Exchange highlighted the following examples:

(1) if a Main Board applicant’s most recent financial year ends on 31 December 2019 and its proposed listing date is on or after 1 April 2020, the accountants’ report to be included in the final prospectus should at least cover the three financial years ended 31 December 2019⁵.

For the purposes of the application proof, under HKEX Guidance Letter HKEX-GL56-13:

(a) if the applicant files its application before the most recent financial year end (i.e. end of December 2019), the application will be returned for not being substantially complete as the Exchange has insufficient basis / information to assess the listing application as the applicant had yet to have completed the last full financial year of its TRP (i.e. the year ended 31 December 2019); but

(b) if the applicant files its application between 1 January 2020 and 29 February 2020, the applicant can include an accountants’ report with a shorter period (i.e. the two financial years ended 31 December 2018 and nine months ended 30 September 2019) in the application proof. However, the applicant must submit a complete accountants’ report for the three financial years ended 31 December 2019 at a later stage for the Exchange’s vetting.

(2) if a Main Board applicant in the above example (i.e. with its most recent financial year which ends on 31 December 2019) intends to list on or before 31 March 2020 instead and the applicant is eligible to apply for a waiver from Rule 4.04(1) of the Main Board Listing Rules, the accountant’s report to be included in the application proof should at least cover the three financial years ended 31 December 2018 and six months ended 30 June 2019.

Profit Forecast Memorandum

Pursuant to Rule 9.11(10)(b) of the Main Board Listing Rules (or Rule 12.22(14b) of the GEM Listing Rules), where the application proof does not contain a profit forecast, a final or advanced draft of the profit forecast memorandum covering the period up to the forthcoming financial year end date after the date of listing (taking the proposed date of listing as indicated by the applicant) must be submitted together with the listing application.

Examples of Listing Applications Returned by The Exchange

Conclusion

The Exchange will reject listing applications on the basis of suitability and eligibility. Where the applicant could not demonstrate sufficient commercial rationale for listing and failed to justify genuine funding needs, or show sufficient support for valuation, or its director(s), substantial shareholder(s) or controlling shareholder(s) appeared to be unsuitable, it may lead to the Exchange rejecting its listing application on grounds of suitability. On the other hand, if the applicant failed to meet the minimum profit requirement (after excluding non-ordinary course income), it may lead to the Exchange rejecting its listing application on grounds of eligibility.

The Exchange will return cases that are not substantially complete. Applications that were submitted with (1) material information omitted in the application proof; or (2) contained insufficient financial information for the respective track record period required under the relevant Listing Rules will be returned.

Please contact our Hank Lo or Rodney Teoh for any further enquiries or information.

This newsletter is for information purposes only. Its content does not constitute legal advice and should not be treated as such. Stevenson, Wong & Co. will not be liable to you in respect of any special, indirect or consequential loss or damage.

¹ HKEX-LD126-2020 and HKEX-LD127-2020
² Rule 9.03(3) of the Main Board Listing Rules (or Rule 12.09(1) of the GEM Listing Rules) and Rule 9.10A(1) of the Main Board Listing Rules (or Rule 12.22 and 12.23 of the GEM Listing Rules)
³ Rule 4.04(1) of the Main Board Listing Rules (or Rule 7.03(1) and 11.10 of the GEM Listing Rules), Paragraph 27 of Part I and Paragraph 31 of Part II of the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance
⁴ Rule 8.06 of the Main Board Listing Rules (or Rule 11.11 of the GEM Listing Rules)
⁵ Rule 4.04(1) of the Main Board Listing Rules (or Rule 7.03(1) and 11.10 of the GEM Listing Rules)

Stevenson, Wong & Co. are proud to be one of the participating law firms in the STEP Work Experience Programme 2020 aimed at giving law students a glimpse of what private client practice is about.

From the left: Partner Ms. Sherlynn Chan, Partner Ms. Catherine Por, Intern Mr. Rodney Fung, Intern Ms. Janis Ling, Intern Ms. Scarlett Ng, Paralegal Ms. Priscilla Teh and Associate Ms. Claire Sit

Scarlett Ng, a 3rd year student at the University of Hong Kong and Janis Ling, a 2nd year student at Chinese University of Hong Kong completed their two-week programme last Friday. They prepared a group presentation on ‘same sex spouses and civil partners’ covering the legal framework in Hong Kong and various overseas jurisdictions. They also gave individual presentations on a private client law topic of their choice, e.g. family law, charities and mental health/capacity law.

“This is an immersive experience into SW private client practice. Not only did I discover the broad range of matters related to private client law, but also the required skill set for working in this area. The interactions with members of the firm were particularly valuable experience.” – Scarlett

“I have gained more understanding on how private client work is like in reality…In short, I am very thankful to work in this firm because you really show care and support…A lot of contents and effort have been put in our programme.” – Janis

Rodney Fung, a 3rd year student at the University of Birmingham, who has just completed his internship at our firm also shared: “…The internship programme is meticulously well thought out and I have learnt a lot about private client practice from conversations with practitioners and trainees as well as doing a group project on same sex marriage and producing a case note. I have also found the court visits to be especially fruitful.”

We look forward to welcoming two more batches of interns this summer for our firm’s summer internship programme!

For more information about STEP Work Experience programme, please contact Ms. Sherlynn Chan.

For more information about our internship programme, please contact Ms. Catherine Por, Ms. Lai Lam, Ms. Sherlynn Chan, Mr. Rodney Teoh and Ms. Milly Hung.

Our partner, Catherine Por, has been named one of the leading female lawyers in Hong Kong in Benchmark Asia Pacific’s Top 100 Women in Litigation 2020.

The 1st edition of Top 100 Women in Litigation aims to pay tribute to leading female litigators across Asia- Pacific who have earned their place by participating in the most notable litigation matters in recent years.

The extensive research process involves months of investigation into litigators’ professional activities as well as client feedback surveys and one-on-one interviews which has culminated in the selection of the most distinguished women in the world of litigation.

Catherine heads the Private Client Practice in the firm. She specializes in all aspects of family law disputes, and has extensive experience in complex financial claims, intervener proceedings, financial claims under Part IIA of the Matrimonial Proceedings and Property Ordinance (Chapter 192), Child Abduction cases, relocation of children cases, claims under the Guardianship of Minors Ordinance (Chapter 13), custody cases, pre-nuptial and post-nuptial agreements, contentious and non-contentious trust cases, contentious estate matters; cross border issues and enforcement proceedings. She has on a number of occasions provided expert legal opinions on Hong Kong Family Law.

Catherine is also an Accredited General and Family Mediator, Fellow of the Chartered Institute of Arbitrators and is a Notary Public and Civil Celebrant of Marriages.

About Benchmark Litigation

Benchmark litigation positions itself as the definitive guide to the world’s leading litigation firms and lawyers and is currently the only publication on the market that focuses exclusively on litigation work.

For more information, please contact Ms. Catherine Por.

(中文) 2020年6月22日，本所合伙人，诉讼及争议解决部和银行及金融部主管徐凯怡律师受邀，出席并担任“廊仲线上- 仲裁实务公开课” 的特邀嘉宾。

本次公开课由廊坊仲裁委员会主办，并由河北省律师协会、中国仲裁法学研究会、中国人民大学国际仲裁研究所、中国政法大学仲裁研究院、对外经济贸易大学法学院、河北经贸大学法学院及廊坊师范学院共同协办。

本次课程由上海锦天城（北京）律师事务所高级合伙人彭立松律师担任主讲嘉宾，并邀得中国政法大学国际法学院教授宋连斌先生、廊坊仲裁委员会业务处副处长李非女士以及本所合伙人、诉讼及争议解决部和银行及金融部主管徐凯怡律师担任特邀嘉宾。

本所合伙人、诉讼及争议解决部和银行及金融部主管徐凯怡律师

在两小时的课程当中，徐律师与各位嘉宾通过网络连线分别就仲裁程序的综述、仲裁程序的推进与管理、仲裁庭的事前准备及特殊事项的处理等题目进行深入的解释及讨论。徐律师作为特邀嘉宾，与观众们分享了她在香港仲裁案件中的实务操作和实战经验。

上海锦天城（北京）律师事务所高级合伙人彭立松律师

左起: 廊坊仲裁委员会业务处副处长李非女士及本课程主持，河北听韬律师事务所创始合伙人张凯律师

若阁下想了解更多详情，请联络本所合伙人徐凯怡律师 (heidi.chui@sw-hk.com)。

(中文) 2020年6月6日，本所合伙人、诉讼及争议解决部门主管徐凯怡律师再度受邀担任北京大学法学院“模拟仲裁”课程客席讲师，为北大法学院本科及硕士学生线上讲授模拟仲裁课程，并分享仲裁经验。

本次“模拟仲裁”课程由香港律师会和北京大学法学院共同合作举办，旨在让学生们学习和掌握国际仲裁的知识及实务。徐律师去年亦为此课程担任客席讲师，今年的课程因疫情原因而转为线上授课，但亦无阻学生们的积极参与。

如阁下有任何查询或想了解更多详情，请联络本所徐凯怡律师，heidichui.office@sw-hk.com。

(中文) 随着大湾区的发展，粤港澳的往来日益频繁。粤港澳大湾区作为国家开放程度最高及经济活力最强的区域之一，市场及消费潜力不可限量，愈来愈多的港澳人士亦在大湾区生活。而大湾区城市更是港澳人士退休养老的宜居地之一。港澳人士于内地的医疗需求因此渐受关注。

根据国务院于2019年2月18日实施的《粤港澳大湾区发展规划纲要》，国家进一步支持港澳医疗卫生服务提供主体在珠三角九市以独资、合资或合作等方式设置医疗机构，鼓励港澳医务人员到珠三角九市开展学术交流及私人医师执业，发展区域医疗联合体和区域性医疗中心，以提供国际化高品质的医疗服务。

港澳服务提供者在大湾区设立医疗机构将会迎来巨大商机。据报道，目前已有超过27家港资医疗机构在大湾区开业，其中8家在深圳，以专科门诊为主。而横琴首家获批由澳门执业医生开设的诊所亦于2019年11月底正式营业。

港澳服务提供者在国内，特别是大湾区开设医疗机构比外国投资者拥有更多政策优势。本文将深入解读港澳服务提供者在大湾区开设医疗机构的政策和操作，以供有兴趣的人士参考。

港澳服务提供者可在内地设立独资医院及其他类型独资医疗机构

与外国投资者相比，港澳服务提供者在中国内地投资设立医疗机构（包括医院及其他类型的医疗机构）享有更优惠的政策。

尽管2019年版的《外商投资准入特别管理措施负面清单》仍然不允许外国投资者设立独资医疗机构（即只限中外合资、合作形式，外资股权或权益占比不超过70%），然而最早在2009年内地就已经允许香港、澳门服务提供者在广东省以独资形式设立门诊部（见《中外合资、合作医疗机构管理暂行办法的补充规定二》（卫生部、商务部令第61号））。直到2013年，国家卫生部及商务部发布《关于香港和澳门服务提供者在内地设立医疗机构有关问题的通知》（卫医政发[2012]72号），全面放开及允许香港和澳门服务提供者在内地以独资形式设置医疗机构。

依据上述政策，第一家港商独资的医院于2013年在深圳成立。

港澳医生可凭《内地医师资格证书》在内地行医

根据2009年4月15日实施的《香港和澳门特别行政区医师获得内地医师资格认定管理办法》（下称“《内地医师资格认定办法》”），香港及澳门永久性居民（下称“港澳永久居民”）更可以申请内地医师资格认证并在内地行医及设立私人诊所（设立诊所的条件见下文）。
根据1999年5月1日起实施的《执业医师法》，国内实行医师资格准入及医师执业许可制度。港澳永久居民获得内地医师资格，主要有以下第一及第二两种方式；此外，港澳永久居民还可以按照下述第三种方式申请在境内短期执业。具体如下：

1. 通过内地医师资格认定

根据《内地医师资格认定办法》，同时具备下列条件的港澳永久居民可向省级卫生健康管理部门申请内地医师资格认定（限临床、口腔及中医类别）：

• 2007年12月31日前已取得香港或澳门合法行医资格满5年；
• 具有香港或澳门专科医师资格证书；
• 在香港或澳门医疗机构中执业；及
• 符合《执业医师法》及其有关规定。

2. 通过境内医师资格考试

根据《执业医师法》，内地实行医师资格考试及医师执业注册制度。符合报考条件的港澳永久居民通过内地医师资格考试的，可以申请内地医师资格。

3. 申请短期执业

根据自2009年3月1日起施行的《香港、澳门特别行政区医师在内地短期行医管理规定》以及自2011年1月1日起施行《关于印发《香港和澳门特别行政区医疗专业技术人员在内地短期执业管理暂行规定》的通知》，港澳法定注册医疗卫生专业人员（包括医生、中医、牙医、药剂师、护士、助产士、医务化验师、职业治疗师、视光师、放射技师、物理治疗师、脊医）可在内地申请短期执业，有效期不超过3年。期满需要延期的，可以重新办理手续。需要注意的是，港澳医疗专业技术人员在内地短期执业，应由内地具有《医疗机构执业许可证》的医疗机构作为聘用单位。

大湾区城市的指定港资医疗机构将可使用已在香港注册的药物和仪器

大湾区地方政府非常欢迎香港的医疗机构到广东省办医院或者医疗机构，但其中两地的药物以及医疗器械的认证问题是阻碍香港医疗机构北上的一个很大的原因。这方面的政策近期已有突破。在2019年11月公布的惠港16项措施中，特别规定容许在大湾区内地城市的指定港资医疗机构里，使用已在香港注册的药物和常用的医疗仪器。

目前深圳已率先宣布将积极落实相关措施，未来在大湾区指定的一些医疗机构都有可能开放相关限制。

医疗机构的种类及法律实体选择

根据自2017年4月1日起实施的《医疗机构管理条例实施细则》（下称“《实施细则》”），内地医疗机构分为十三个类别，主要包括医院、妇幼保健院、门诊部及诊所等。 以下我们简单介绍港澳服务提供者于内地设立的常见医疗机构类别：医院、门诊部及诊所。

1. 医院

根据卫生部于1994年颁布的《医疗机构基本标准（试行）》的规定，凡以“医院”命名的医疗机构，住院床位总数应在20张以上。医院按规模划分为一级到三级。医院等级的划分有多项标准，而其中重要的一项为病床数。一级医院的病床数在20-99张，二级医院的病床数在100-499张，而三级医院的病床数为500张以上。

根据相关规定，港澳服务提供者于内地设立的医院必须具有法人资格，即医院在法律上应当以公司形式运营。

2. 门诊部和诊所

根据《医疗机构基本标准（试行）》及卫生部于2010年颁布的《诊所基本标准》，门诊部和诊所都是为患者提供门诊诊断和治疗的医疗机构，不设住院病床。门诊部的设置标准包括科室、医护人员人数、面积等。例如，综合门诊部至少应设有5个临床科室，至少应有5名医师和5名护士，房屋建筑面积不少于400平方米。而诊所至少应设有诊室、处置室、治疗室，至少有1名医师和1名护士，房屋建筑面积不少于40平方米。

国内法律对除医院外的医疗机构的组织形式并没有其他特别规定或限制，营办方可选择以公司、合伙企业、个人独资企业或个体工商户等形式经营其他医疗机构。一般而言，门诊部多以公司形式运营，而私人诊所倾向于以个体工商户的形式经营。

港澳服务提供者应当满足的要求和条件

根据《内地与香港关于建立更紧密经贸关系的安排》及《内地与澳门关于建立更紧密经贸关系的安排》（以下合称为“CEPA”）的规定，拟于境内设立医疗机构的港澳服务提供者可为港澳永久居民或者为根据香港或澳门法律设立的任何法律实体（包括公司、基金、合伙企业、合资企业、独资企业或者协会）。如为法律实体，需同时满足以下两个条件并取得符合服务提供者定义的相关证明：

1) 根据香港或澳门有关条例注册或登记设立，并取得有效商业登记证。法例如有规定，应取得提供该服务的牌照或许可。
2) 于香港或澳门从事实质性商业经营。具体包括：在香港或澳门提供服务的性质和范围应包含其拟在内地提供服务的性质和范围；在香港或澳门从事实质性商业经营3年及以上；营业期间依法缴纳利得税或其他税费；有相应的业务场所及雇佣员工50%以上不受居留限制。

港澳服务提供者投资设立医院的要求和条件

根据《香港和澳门服务提供者在内地设立独资医院管理暂行办法》（于2011年1月1日实施），香港和澳门服务提供者在内地设置独资医院的，拟设立的独资医院应当符合以下条件：

1)申请设立港澳独资医院的香港和澳门服务提供者应当是能够独立承担民事责任的法人，具有直接或间接从事医疗卫生投资与管理的经验；
2)拟设立的港澳独资医院必须是独立的法人；
3)三级医院投资总额不低于人民币5,000万元，二级医院投资总额不低于人民币2,000万元；
4)符合二级以上医院基本标准；
5)在老、少、边、穷地区设置的港澳独资医院，投资总额要求可以适当降低； 及
6)其他应当满足的条件。

此外，实践中不同城市的卫生健康部门对于设立医院的具体要求可能会存在一定差异。

港澳医生开设私人诊所的要求和条件

港澳医生在内地开办私人诊所没有设定投资门槛。根据《医疗机构管理条例实施细则》及CEPA的补充协议四，在城市设置诊所的个人，必须同时具备下列条件：

1)取得内地《医师资格证书》；
2)具有香港或澳门合法行医权；
3)在香港、澳门执照行医或在两地连续行医时间合计满5年；或者在内地从事同一专业临床工作连续5年以上；及
4)省、自治区、直辖市卫生健康管理部门规定的其他条件。

另外，诊所必须为该港澳医生独资经营，一名香港或澳门服务提供者在内地只能开设一家个体诊所，并担任该个体诊所的负责人。而且，香港、澳门服务提供者开办个体诊所，申请的诊疗科目应与其本人在内地和港澳的执业范围相符合。私人诊所成功登记后，港澳医生在开业经营前还应申请《医师执业证书》。

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