Market Consultation on
Chapter 17 (Share Schemes) of the Exchange Listing Rules
The Exchange has considered the comments from market participants on the existing requirements of share schemes and the relevant proposal in the consultation paper in May 1999 and proposes to relax certain major requirements and introduce additional disclosure requirements in Chapter 17 of the Exchange Listing Rules.
As the new proposal includes certain fundamental changes from the proposal in the May 1999 consultation paper, the Exchange is conducting a further consultation to seek the market's views on the new proposal.
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The Stock Exchange of Hong Kong issued a consultation paper in May 1999 in relation to the 1998/1999 review of certain chapters of the Exchange Listing Rules. With regard to the proposed new Chapter 17 which sets out the requirements for share schemes, a number of respondents commented that the proposed requirements would be overly restrictive and should be further relaxed in order to allow listed issuers more flexibility in the operation of share schemes. In view of this, the Exchange proposed to relax the requirements of Chapter 17 further and sought the views of certain parties (including those who responded to the May 1999 consultation paper) on the further relaxed requirements.
The proposed further relaxation of certain major requirements of Chapter 17 and the introduction of additional disclosure requirements include the definition of participants of share schemes, procedures for approval of shareholders of mandates for granting options, revised limits on options granted under share schemes and options granted to an individual participant, new requirements for the granting of options to connected persons, and disclosure of the fair value of options granted in the interim and annual reports.
In view of the proposed further relaxation of certain major requirements of Chapter 17 and the introduction of additional disclosure requirements in the new proposal, the Exchange is now conducting a further market consultation.
Copies of the consultation paper will be despatched to listed issuers and advisers. Additional copies are available from the Exchange at 11th floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong. This consultation paper is also available for viewing at the Exchange's website at http://www.sehk.com.hk.
Views of interested parties should be conveyed to the Exchange on or before June 7, 2000. Following the consultation, the Exchange will revise the relevant provisions of the Exchange Listing Rules.
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