ANNOUNCEMENT

ISSUANCE LIMITS FOR DERIVATIVE WARRANTS

The Main Board Listing Rules impose a limit, often referred to as quota, on the number of shares of companies listed on the Exchange that may be subject to derivative warrant issuance. Currently the extent to which the quota for a particular stock has been utilised is measured by reference to the size of derivative warrant issues over that stock. With immediate effect, the extent to which the quota for a particular stock has been utilised will be measured by reference to the number of derivative warrants over that stock that are held by the public.

 

The Main Board Listing Rules impose a limit on the number of shares of companies listed on the Exchange that may be subject to derivative warrant issuance. This limit (the lower of 20% of a company's issued shares or 30% of the public float) is often referred to as quota.The extent to which the available quota for a particular stock has been utilised is measured by reference to the size of derivative warrant issues over that stock. With immediate effect, by means of a general modification of Listing Rule 15A.34, the Exchange will measure the extent to which the quota for a particular stock has been utilised by reference to the number of derivative warrants over that stock that are held by the public. The current quota limits will remain unchanged and the utilisation of quota will be measured on a weekly basis.

If 50% of the quota for a particular stock is utilised (as calculated above) then issues of derivative warrants over that stock will be prohibited until the utilisation level falls to below 45%. If the utilisation level increases to 75% then monitoring will be performed on a daily basis. If the utilisation level increases to 90% the Exchange will ask issuers to take steps to reduce the utilisation level.

The Securities and Futures Commission has granted its consent under Listing Rule 2.04 for the modification of such relevant requirements in the Listing Rules.