Hong Kong Exchanges and Clearing Limited (HKEx) published its Consultation Conclusions on Ex-entitlement Trading and Shareholder Approval today (Friday).
HKEx received 45 responses from a group that comprised listed issuers, professional and industry associations, market practitioners and individuals. A majority of the respondents supported the view that shares should be traded ex-entitlement only after shareholder approval.
HKEx has amended the Listing Rules to:
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Prevent shares from trading ex-entitlement before shareholder approval;
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Require the record date to be set at least three business days after the date of shareholder approval (ie at least one cum-trading day will be provided);
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Require a minimum of one cum-trading day after the general meeting; and
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Apply the changes to all conditional entitlements that are subject to shareholder approval.
The Rule amendments will come into effect on 20 June 2011. As a transitional arrangement, the amendments do not apply to entitlements with timetables announced before the effective date of the Rule amendments.
"The Rule changes will help ensure a fair and orderly market and enhance investor protection,” said Mark Dickens, HKEx’s Head of Listing. “They also will align us with other leading markets and eliminate the risk in the market when shares go ex-entitlement before the entitlement is approved by shareholders.”
The Consultation Conclusions can be downloaded from the “News & Consultations – Market Consultations – Consultation Conclusions” section of the HKEx website.
The Rule amendments can be downloaded from the “Rules & Regulations – Rules and Guidance on Listing Matters –Amendments to Main Board Listing Rules” and the “Rules & Regulations – Rules and Guidance on Listing Matters –Amendments to GEM Listing Rules” sections of the HKEx website.
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