We are delighted to announce that our firm and partners have been shortlisted as finalists in 8 categories at the ALB Hong Kong Law Awards 2023. We are honoured to be recognized for our dedication and expertise across various practice areas.
The ALB HK Law Awards is an annual event that recognizes and celebrates the outstanding achievements of law firms, in-house legal teams, and individual lawyers in Hong Kong and the region. The winners will be announced at the awards ceremony on 15 September 2023 at the JW Marriot.
To view the complete list of finalists, please click here.
On 11 August 2023, the China Securities Regulatory Commission (“CSRC“) and the Hong Kong Securities and Futures Commission (“SFC“) made a joint announcement on the introduction of block trading (manual trades) under the mutual stock market access arrangements between the Mainland and Hong Kong.
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Background
Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect (collectively, “Stock Connect”) launched in 2014 and 2016, respectively, have enabled investors from the Mainland and Hong Kong to trade shares listed on each other’s market. Such mutual market access has been facilitating the opening-up of China’s capital account and Renminbi internationalisation. In 2022, the scope of eligible stocks under Stock Connect was expanded to include exchange-traded funds (ETFs), international companies primarily listed in Hong Kong, and a larger number of Shanghai and Shenzhen-listed companies.
Nevertheless, block trading is currently not available to participants under the Stock Connect regime while offshore investors can only engage in block trading through the Qualified Foreign Investor (“QFI”) scheme. Since many Stock Connect participants do not have a QFI licence to access block trading, they could only execute a large-sized transaction by way of separate transactions, which could take long time to complete and lead to price slippage.
The new Stock Connect arrangement
The new arrangement introduces block trading to Stock Connect under which investors can execute large-sized transactions at privately negotiated prices, which in turn minimises the price impact brought by these transactions to the market via auto-matching. Under the new arrangement, offshore investors will be able to execute block trades on the Shanghai Stock Exchange and the Shenzhen Stock Exchange through the northbound trading link. Meanwhile, Mainland investors will be able to conduct manual block trades on The Stock Exchange of Hong Kong Limited through the southbound trading link.
The CSRC and the SFC will oversee the respective exchanges and clearing houses as they develop the operational and regulatory details required to launch the new block trading mechanism. Further implementation proposal and the official launch date of the new arrangement will be announced in due course, but it is confirmed that both northbound and southbound block trading will be introduced at the same time.
Analysis and takeaways
By including block trading as an additional trading mechanism under Stock Connect, the new arrangement could reduce the potential price impact to the market when large-sized transactions are executed. While from investors’ perspective, the new arrangement would likely enhance the price and execution certainty of large-sized transactions, which may further assist investors in better managing their asset allocation at lower costs.
It is anticipated that the new block trading facility under Stock Connect could further promote connectivity and integration between the Mainland and Hong Kong capital markets, thereby strengthening Hong Kong’s position as an international financial centre and offshore Renminbi hub which connects the Mainland and the world.
Please contact our Partner Mr. Rodney Teoh for any enquiries or further information.
This news update 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 arising from or in connection with any decision made, action or inaction taken in reliance on the information set out herein.
On 3 August 2023, our Partner Gordon Tsang was invited by Deloitte to be a guest speaker at the seminar titled “Deloitte Knowledge Sharing – Explore the IPO path for high-tech enterprises” held at the Hong Kong Science Park.
Our Partner Gordon Tsang (3rd from the left) …
The seminar featured speakers from HKEX and capital market professionals who provided valuable insights on new listings and the latest developments in the capital market. During the seminar, Mr. Tsang discussed listings on Hong Kong Stock Exchange and the challenges of the listing applicants.
Mr Jiang Peng, Senior Partner of our associated firm – AllBright Law Offices, shared his opinions regarding the common concerns for an A-shares review.
For more information, please contact our Partner Mr. Gordon Tsang.
We are delighted to announce that our firm has again been recognised by IFLR1000 Asia Pacific Guide 2023, a guide to the world’s leading financial and corporate law firms and lawyers in the following three practice areas: Capital Markets- Equity, Financial Services Regulatory and Retail Funds. In addition, two of our Partners have received recognition for their outstanding work in Hong Kong Capital Markets: Equity. Our Partner and Head of Corporate Finance, Hank Lo, has once again been named “Highly Regarded“, and Partner Gordon Tsang has been recognized as a “Rising Star Partner“.
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IFLR1000 evaluates law firms and lawyers based on transactional evidence and client feedback. The rankings recognize firms that have advised on some of the most complex and innovative transactions in their markets and received outstanding feedback from clients for their work.
About IFLR1000
The IFLR1000 is a leading international legal market guide focusing on financial and corporate law firms. Since 1990, IFLR1000 has published over 750 practice area rankings across 235 jurisdictions globally.
Please click here to see our rankings on IFLR1000.
Introduction
On 21 July 2023, The Stock Exchange of Hong Kong Limited (the “Exchange”) published the consultation conclusions (the “Conclusions”) on rule amendments following Mainland China regulation updates and other proposed rule amendments relating to the People’s Republic of China (the “PRC”) issuers. The Conclusions were issued in response to the consultation paper published by the Exchange on 24 February 2023 (see our news update on the consultation paper).
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Background
On 17 February 2023, the State Council of the PRC issued the “Decision of the State Council to Repeal Certain Administrative Regulations and Documents”, and the China Securities Regulatory Commission (“CSRC”) issued the “Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies” and related guidelines (“New Regulations on Overseas Listing”). The New Regulations on Overseas Listing came into effect on 31 March 2023, followed by the repeal of the Special Regulations1 and the Mandatory Provisions2 .
Under the New Regulations on Overseas Listing, PRC issuers shall formulate their articles of association with reference to the Guidelines for the Articles of Association of Listed Companies issued by the CSRC. The New Regulations on Overseas Listing no longer require PRC issuers to follow the previously implemented Mandatory Provisions to (i) deem holders of domestic shares and H shares (which are both ordinary shares) as different classes of shareholders, thereby removing the class meeting requirements applied to holders of domestic shares and H shares in certain circumstances; and (ii) use arbitration to resolve disputes involving H shareholders, thereby removing the arbitration requirements.
The New Regulations on Overseas Listing also introduced a new filing regime for all direct and indirect overseas listings and securities offerings by Mainland based companies.
The amendments to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“Listing Rules“) will come into effect on 1 August 2023, and are summarised in the table below:
Analysis and takeaways
The Exchange has made corresponding amendments to the Listing Rules to align with the regulatory rules in Mainland China, and ensure that the rules applicable to Chinese issuers are more consistent with other overseas companies.
PRC issuers must still adhere to their existing articles of association concerning class meetings and other provisions that were originally formulated based on the Mandatory Provisions until and unless they amend their articles of association to remove such provisions. In general, where PRC issuers voluntarily propose to amend their articles of association to remove the class meeting requirements, they should obtain approvals of domestic shareholders and H shareholders at separate class meetings based on their existing articles of association.
Please contact our Partner Mr. Rodney Teoh for any enquiries or further information.
This news update 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 arising from or in connection with any decision made, action or inaction taken in reliance on the information set out herein.
1The Special Regulations on the Overseas Offering and Listing of Shares by Joint Stock Limited Companies (國務院關於股份有限公司境外募集股份及上市的特別規定) issued by the State Council of the PRC on 4 August 1994, as amended, supplemented or otherwise modified from time to time. 2The Mandatory Provisions for Companies Listing Overseas set forth in Zheng Wei Fa (1994) No. 21 issued on 27 August 1994 by the State Council Securities Policy Committee and the State Commission for Restructuring the Economic System.
On 19 July 2023, our Partner and Head of the Dispute Resolution department, Ms Heidi Chui, was invited to attend the “Guangdong Province Foreign-related Legal Construction Work Conference and Forum on High-quality Development of Foreign-related Judicial Work (“the conference”)”. At the conference, Ms Chui was appointed as a Specially Invited Mediator from Hong Kong and Macao by the High People’s Court of Guangdong Province.
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(From the right) Dr Thomas So, Member of The National Committee of the Chinese People’s Political Consultative Conference and Past-President of the Law Society of Hong Kong; Mr CM Chan, President of the Law Society of Hong Kong; our Partner Ms Heidi Chui, Council Member of the Law Society of Hong Kong; and Mr Neville Cheng, Council Member of the Law Society of Hong Kong
As the first provincial-level work conference on foreign-related legal construction in Guangdong, the conference was attended by over 400 guests from various organizations and institutions. Ms. Chui was invited to attend the event as a Specially Invited Mediator from Hong Kong and Macao by the High People’s Court of Guangdong Province and received the appointment letter at the event.
The conference featured six forums in a “conference + parallel forum” format. Guests discussed various topics related to the rule of law, including foreign-related lawyers, arbitration, judicial work, talent cultivation, and enterprise service guarantee. The discussions promoted legal exchanges and cooperation between Guangdong, Hong Kong, and Macao and to build an international brand for legal services in the Greater Bay Area.
For more information, please contact our Partner Ms. Heidi Chui.
