Introduction

In the past few years, Hong Kong has seen a series of privatisations of listed companies, and a considerable amount of which have been carried out by way of scheme of arrangement. In this article, we will discuss the recent Hong Kong High Court judgement in Chong Hing Bank Limited (HCMP 968/2021, [2021] HKCFI 3091) (“Chong Hing”), which could draw potential implications for parties using court sanctioned schemes of arrangement to privatise Hong Kong listed companies or reductions of capital. Indeed, the way of dealing with concert parties’ votes on a privatisation scheme at a court-convened shareholder meeting may affect its validity. Furthermore, this High Court decision could affect the drafting of the scheme documents and notice of court meeting going forward.

Introduction

On 3 March 2022, the Financial Services Development Council (the “FSDC”) released a research report, recommending the Securities and Futures Commission (the “SFC”) and the Hong Kong Exchanges and Clearing Limited (the “HKEX”) to reform Hong Kong’s listing framework, with an objective to boost the competitiveness of Hong Kong as the leading Asian bourse and maximise the capital markets in Hong Kong.

Sorry, this entry is only available in 中文.

Sorry, this entry is only available in 中文.

1. The rising significance of digital assets and tokens in Hong Kong

Digital assets, cryptocurrencies and tokens have captured increasing attention in Hong Kong.  For instance, PwC Hong Kong has partnered up with the Sandbox in purchasing a virtual land in the Sandbox metaverse.  NFTs dominate the recent discussions in the blockchain ecosystem.  We also see massive development in the Hong Kong regulatory landscape – the Financial Services and the Treasury Bureau of Hong Kong (“FSTB”) published its consultation conclusion paper proposing a licence regime for virtual assets exchange (the “FSTB Conclusion Paper”) (see our news update here), the recent conclusion paper from the Hong Kong Monetary Authority (the “HKMA“)  focusing on payment-related stablecoins (see our news update here), and a couple of initiatives from the Hong Kong Securities and Futures Commission (“SFC”) on Virtual Assets Service Providers (“VASPs”) and Securities Token Offering (“STO”).  It is therefore important to discuss the different forms of digital assets and their regulatory implications in Hong Kong.

Background

On 19 November 2021, The Stock Exchange of Hong Kong Limited (the “Exchange”) published its consultation conclusions (the “Consultation Conclusions”) as to its proposal to enhance and streamline the listing regime for overseas issuers.  The amended Rules Governing the Listing of Securities on the Exchange (the “Listing Rules”) and the new guidance materials become effective from 1 January 2022.

The said proposals received large support from the public.  As such, the Exchange has concluded to adopt all the proposals outlined in its consultation paper on enhancing and streamlining the listing regime for overseas issuers on 31 March 2021 (the “Consultation Paper”) with minor modifications.  This article follows up with our news update in April 2021 on the Exchange’s Consultation Paper.  The capitalised terms used herein shall have the same meaning as defined in the Consultation Conclusions and Consultation Paper.  

In summary, the revised listing regime will be based on the following: