On 6 November 2019, the Securities and Futures Commission (the “SFC”) issued a position paper entitled “Regulation of Virtual Asset Trading Platforms” (the “Position Paper”) along with an Appendix titled “Licensing Conditions and Terms and Conditions for Virtual Asset Trading Platform Operators” (the “Terms and Conditions”). The Position Paper introduced the SFC’s new regulatory framework of virtual asset trading platforms, emphasising on; (i) the licensing and supervisory regime in consistence with the IOSCO consultation report<[1] and (ii) a series of robust regulatory standards listed in details below. Background

The virtual asset market is continuously booming and evolving. With the booming market comes with more types of virtual asset investment products. Apart from initial coin offerings (ICOs), assets like “stablecoins”, Bitcoin futures, security token offerings (STOs), initial exchange offerings (IEOs) and other forms of derivatives have gained their entrance into the market. The new products, together with the part-taking of the largest accounting firms, renowned insurers and their brokers into virtual asset market, has attracted the close attention among global regulators.

Indeed, the SFC had released several announcements and circulars[2] on the topic to illustrate the relevant issues, followed with enhanced investor education and supervision.  The release of November 1 Statement has laid down the SFC’s regulatory stance and approach (See our  news update relating to “Further Development of Regulatory Approach towards Virtual Asset Portfolio Managers, Fund Distributors and Trading Platform Operators”).  The Position Paper now further elaborate the SFC’s new regulatory approach to virtual assets trading platforms. Essentially, the new approach allows eligible virtual asset trading platforms to be licensed by the SFC.  Licensed platforms will also be placed in the SFC Regulatory Sand Box[3] for a period of close and intensive supervision.

Licensing and Supervision Framework

In order to bring virtual asset trading platforms into the SFC’s regulatory oversight, the SFC introduced a new licensing regime covering centralised online trading platforms in Hong Kong that provide trading of at least one security token on its platform.  Such platform operators require a license for Type 1 (dealing in securities) and Type 7 (providing automated trading services, ATS) regulated activities. Subject to the Terms and Conditions and other licensing requirements, e.g. fit and proper criteria, a license may be granted to the qualified platform operators.

In terms of supervisory regime, when examining the license application of a platform operator, the SFC will consider the overall conduct of virtual assets trading business, particularly the compliance with expected regulatory standard. Once the platform operator is licensed, the SFC’s jurisdiction will take into account all relevant areas of operation, involving both security and non-security tokens trading occurring on or off its platform.

The said licensing and supervisory standards under the regulatory framework are kept consistent with international standards. They are also comparable to those which apply to licensed securities brokers and automated trading venues.

Licensing Conditions and Terms and Conditions

Once the SFC decides to grant a licence to the qualified centralised platforms operators, the following Terms and Conditions may be imposed. However, they are not exhaustive and the relevant Codes and Guidelines[4] shall also be referred to when conducting the relevant activities.

The six licensing conditions are as follows:-

1. The licensee must only provide services to professional investors[5].

2. The licensee must comply with the Terms and Conditions.

3. The licensee must obtain the SFC’s prior written approval for any plan or proposal to introduce or offer a new or incidental service, or activity, or to make a material change to an existing service or activity.

4. The licensee must obtain the SFC’s prior written approval for any plan or proposal to add any product to its trading platform.

5. The licensee must provide monthly reports to the SFC on its business activities in a format as prescribed by the SFC.[6]

6. The licensee must engage an independent professional firm acceptable to the SFC to conduct an annual review of its activities and operations and prepare a report confirming that it has complied with the licensing conditions and all relevant legal and regulatory requirements[7].

The Terms and Conditions mainly focuses on and seeks to address the key regulatory concerns related to the safe custody of assets, know-your-client requirements, anti-money laundering and counter-financing of terrorism, market manipulation, accounting

and auditing, risk management, conflicts of interest and the acceptance of virtual assets

for trading. The table below provides a summary of the key Terms and Conditions:

Way Forward

From the encouraging attitude of the Greater Bay Area initiative regarding the financial technology industry, the development of the PBOC’s DC / EP (Digital Currency/Electronic Payment), to the recent speech of the national leader on encouraging the development and application of blockchain technology, we are seeing favourable development in this industry sector.

In this connection, the new regulatory approach put forward in the Position Paper has enabled higher regulatory certainty for virtual assets trading platform.  Such move from the SFC will allow Hong Kong to further consolidate itself as an international financial hub, as well as enhancing its positioning in the fintech sector.

This article is co-authored by Hank Lo, Partner and Head of Corporate Finance, and Partner Rodney Teoh. 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.

On 8 July 2020, our firm’s partner, Ms. Sherlynn Chan, was invited by the Zonta Club of Victoria to give a talk on “How to Embrace the Dementia Tsunami in HK- a Legal Perspective”.

From the left: Our firm’s partner, Ms. Sherlynn Chan; President of Zonta Club of Victoria, Ms. Helen Chen; Past International Director of Zonta International, Ms. Winnie Teoh and Governor of District 17- Zonta International, Ms. Teresa Lin

In light of the ageing population and increased life expectancy, there will be a surge in the number of dementia cases, leading to a huge increase in demand for elderly goods and services. During the talk, Ms. Chan explained the common causes of mental incapacity and gave an overview of the Mental Health Ordinance (Cap. 136). She then shared some case studies of elderly financial abuse and introduced some planning tools available (such as Wills and Trusts, the Enduring Power of Attorney and Advance Directives) to those who are still mentally capable in order to “prevent, protect and prepare”.

About Zonta

Zonta International is a global organization of executives and professionals working together to advance the status of women worldwide through service and advocacy. Zonta International envisions a world in which women’s rights are recognized as human rights and every woman is able to achieve her full potential. Founded in 1919, there are nearly 33,000 members from more than 1,200 Zonta Clubs across 67 countries and geographical areas.

About Ms. Sherlynn Chan

Ms. Sherlynn Chan, Partner of our firm and the Chairman and founding member of MIP Care Resources Connect Ltd., specialises in private client work including contentious probate and family matters. She served as a Deputy District Judge in the Family Court in 2014 and is currently the Chairman of the Mental Health Law Committee of the Law Society of Hong Kong and Co-Chair of the Societies of Trusts and Estate Practitioners (STEP) HK’s Mental Health, Elderly and Capacity Law Sub-Committee.

She has been appointed by the High Court as Committee of the estate of mentally incapacitated persons and manages substantial assets on behalf of vulnerable clients.

Please contact Ms. Sherlynn Chan for more information or further enquiries.

(中文) 一．前言

在美股上市的中概股“回家”最近成为市场热话。其实早在2015-2016年间，包括完美世界（002624.SZ）、三六零(601360.SH)在内的多家互联网公司也曾掀起过回归A股潮。而港股则在近两年迎来了数只大型的回归中概股。2019年11月,中国飞鹤（06186.HK）在美股退市6年后重返资本市场，在香港联合交易所（下称“联交所”）上市当天市值670亿港币，成为港股历史上IPO时市值最大的乳品企业。同月，阿里巴巴（NYSE：BABA；09988.HK)在联交所成功第二上市（Secondary Listing），为中概股回归港股翻开了新的一页。随后，京东（NASDAQ：JD；09618.HK)及网易（NASDAQ：NTES；09999.HK)也在今年6月成功第二上市。毫无疑问，因瑞幸咖啡财务造假事件而引爆的中概股信心危机以及美国监管政策的收紧将促使更多中概股踏上回归之路。

目前，中概股回归A股市场须经历私有化、拆除VIE架构等一系列复杂的流程。相比之下，重返港股市场则简单得多。2018年联交所启动了25年以来的最大机制改革，通过三大举措吸引新经济公司和创新公司来港上市，包括：(1) 允许尚未盈利的生物科技公司在港上市；(2)开放了同股不同权的限制；以及(3)接纳业务重心在大中华地区的企业申请在港第二上市。联交所的这一系列改革，不仅为港股市场增添了活力，更为众多中概股的回归创造了便利的条件。

以下，我们将从美国与香港上市规则的角度介绍中概股回归港股可以选择的三大路径，以及每种路径的流程和要点。

二．路径一：美股退市后于港股上市

中概股先于美股私有化退市，再通过IPO途径在港股重新上市是其中一种主流选择。今年7月6日，于纳斯达克上市的新浪（NASDAQ：SINA）公告，其股份获董事长旗下的公司发出私有化邀约，成功后将从美股退市。而过去曾于美股私有化后再在港股上市的公司则包括同程艺龙（00780.HK）、中国飞鹤（06186.HK）等知名股份。

企业于美股退市后再于港股IPO，将涉及三个主要操作步骤：

第一步，美股市场完成私有化并退市；

第二步，港股上市前重组（例如拆除部分VIE架构）;

第三步，港股IPO。

第一步：美股私有化及退市的示例性流程

美股私有化的方式有多种，包括(1)一步式合并，(2)两步式合并，(3)反向股票分拆等。以下我们将分别介绍该三种方式的流程及要点。

（1） 一步式合并 (“One-step” Merger)

一步式合并的私有化示例流程如下：

如果交易结构为一步式合并，公司必须通过投票代理声明书寻求其股东的批准，投票代理声明书必须符合美国证券交易法案条例14A和附表14A的要求，并且还必须在美国证券交易委员会（下称“SEC”）备案。

（2） 两步式合并 (“Two-step” Merger)

两步式合并的私有化示例流程如下：

(3) 反向股票分拆（Reverse Split）

公司也可以采取缩股分拆的方式来将纪录股东数目降低至SEC要求的标准之下，从而停止其向SEC备案的要求。在缩股中，公司发行一股新股来交换一定数目的旧股，就不足一股的零星股份向非关联方持有人进行现金补偿，从而使这些零星股持有人将不再持有公司的任何股份。

第二步，港股上市前重组

企业私有化后，通常需要根据各种商业因素以及IPO目的地的监管要求对拟上市集团进行架构重组。在港股重新IPO所需要进行的架构重组相对简单，例如不需要进行拆除红筹架构的动作。然而值得注意的是，联交所对上市公司采用VIE架构有着比美国市场更严格的要求。根据联交所的指引信HKEX-GL77-14中的指引，拟上市申请人采用VIE架构必须遵循严格限定（Narrowly-tailored）原则。根据此原则，除非监管部门没有规定操作指引或政策不允许，VIE架构必须在外资持股比例限制范围内采用。如果相关业务不存在外资持股比例限制，则上市申请人不得采用VIE架构来经营没有外资持股比例限制的业务。

因此，从美股私有化后的集团除了从商业角度进行重组外，也可能需要将部分不受外资股权限制的业务由VIE控制更改为以股权控制，或将存在外资持股比例限制的业务在政策允许的范围内采用股权与VIE混合控制模式。

第三步，港股IPO

重组完成后或在重组过程中，企业已可开始启动港股的IPO流程。我们在此列出港股IPO的财务要求、流程及通常所需时间：

港股IPO示例流程：

三．路径二：保留美股上市地位，申请于港股双重主要上市

中概股回归港股的另一项选择是在港作双重主要上市(Dual Primary Listing)。双重主要上市是指同一家公司在两个证券交易所同时挂牌，且同时满足两地对上市公司的各项监管要求，目前在A股、港股同时挂牌的众多“A+H”公司就是典型的双重主要上市案例。2018年8月，百济神州（NASDAQ：BGNE；06160.HK）在港股成功发行新股并挂牌，实现在港股、美股双重主要上市。

美国上市公司在港申请双重主要上市（或第二上市）只需要董事会批准即可，并在挂牌后作披露。若同时发行新股融资，则需要向SEC报备招股书。公司在第二市场成功挂牌后发布新闻稿。

另外，联交所允许双重主要上市的公司在符合一定条件的前提下可以通过保密递表的方式申请港股上市,而无须公开披露招股书的申请版本。以百济神州（NASDAQ：BGNE；06160.HK）为例，公司最早于2017年7月20日才宣布公司已出席港交所聆讯。接着，于7月27日宣布进行招股，8月8日已成功完成IPO。

双重主要上市的优点是不需要为私有化准备大笔资金，而同时可以在两个市场进行融资。但是，双重主要上市也需要满足两个市场的监管要求，对企业来说无疑加大了合规成本。

值得留意的是，联交所并没有对双重主要上市的申请人施加任何额外的财务要求。企业只需要符合港股IPO的财务要求即可（财务要求见路径一）。

四．路径三：保留美股上市地位，申请于港股第二上市

中概股可选择的第三种回归方式是在港第二上市（Secondary Listing）。对联交所而言，第二上市意味着上市公司是以原上市市场为主要的股票交易场所并且仍主要接受原上市市场的监管，因此被允许在港股作第二上市的公司可自动豁免遵守联交所部分上市规则。

在2018年前，并没有中概股在港股作第二上市，这是因为联交所和香港证监会曾一度认为业务重心在大中华区的企业不适合在港第二上市。然而，在2018年4月联交所对上市规则进行革新后，主板上市规则中加入了第19C章 – 合资格发行人第二上市。2019年11月,阿里巴巴（NYSE：BABA；09988.HK)在联交所成功第二上市，为中概股回归港股翻开了新的一页。

新制度下，纽约证券交易所、纳斯达克或伦敦证券交易所主市场（并属于英国金融市场行为监管局“高级上市”分类）被视为“合资格交易所”。符合以下条件的，在合资格交易所作主要上市的企业允许在港作第二上市：

(1) 企业必须是创新产业公司；

(2) 在至少最近两个完整会计年度于合资格交易所上市的合规纪录良好；

(3) （对中概股而言）申请人于香港第二上市时的总市值不少于400亿港币，或上市时的总市值不少于100亿港币并且最近一个经审计会计年度的收益不少于 10 亿港币。

另外，如果有关中概股是于2017年12月15日或之前在合资格交易所作主要上市，则属于“获豁免的大中华发行人”，可以额外享受：

(1) 不必修改公司章程等组织章程文件（但仍须符合主要股东保障水平）；

(2) 可以保留企业而有的同股不同权架构，而不需要因应联交所对同股不同权公司的要求进行变更；

(3) 可以保留现有的VIE架构（即不需要对企业现有的VIE架构作上文路径二中所述的更改）。但须符合联交所VIE指引中的披露规定，并须向联交所提供中国法律意见，说明其可变利益实体结构符合中国法律、规则及法规；

(4) 《收购守则》可以不适用于这些公司（但如日后其股份的主要成交地转移到香港市场，令该公司被视作在香港双重主要上市，《收购守则》即告适用）。

显然，相较于双重主要上市，第二上市能大大减低企业在港股市场的合规成本。而且对于获豁免的大中华发行人来说，更加免除了因港美的监管规定不同而需要对企业现行架构实施各种变更的麻烦和成本。因此，第二上市对大型创新公司极具吸引力。

五．结语

正如香港交易所（00388.HK）行政总裁李小加在接受新华社访问时指出，香港市场面向全球投资者开放。过去很多企业选择赴美上市是因为香港的机制还未准备好。但今天的香港已经对上市制度进行了改革，拿掉了好企业上市的障碍和壁垒。中概股“回家”无疑将是大势所趋。

本文作者
本文由本所曾浩贤高级律师、商业法及企业融资部高级经理黄虹及美國欧洛律师事务所 (Ortoli | Rosenstadt LLP)- 亚洲业务部联合主席，叶梦艺律师共同合著。如有任何疑问或需要进一步的信息，请联系本所曾浩贤高级律师。
本新闻简讯仅供参考之用。其内容不构成亦不应被视为法律意见。史蒂文生黄律师事务所对于任何因根据或倚赖本文件所载资料所作决定，行动或不行动而引致的损失或损害，史蒂文生黄律师事务所概不负责。