The Stock Exchange of Hong Kong Limited (SEHK), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx), today published an exposure paper with regard to its proposal to abolish the requirement for Main Board issuers to publish paid announcements in the newspapers and related matters.

The exposure paper describes the proposals and sets out draft amendments to the Main Board and Growth Enterprise Market (GEM) Listing Rules that would implement the proposals.  HKEx seeks market views on three specific aspects by 13 January 2006.

Background

Main Board issuers are currently required under the Main Board Listing Rules to publish announcements by way of a paid announcement in at least one English-language and one Chinese-language gazetted newspaper. Since May 2001, they have also been required to submit electronic copies of announcements for parallel publication on the HKEx website. For GEM issuers, however, publication on the GEM website has been the sole means of news dissemination (in addition to the publication on the issuer's own website) for the purposes of the GEM Listing Rules since the board was established in November 1999.

It is and has been HKEx's intention to revise the current mechanisms for information dissemination by Main Board issuers and to align the Main Board practice with the GEM practice. This will result in the abolition of the requirement for issuers to publish paid announcements in newspapers. The abolition of the requirement for paid announcements in newspapers will also be a move towards the international practice.

Proposals

HKEx considers that, as an interim measure to facilitate an orderly transition to a purely web-based news dissemination regime, Main Board issuers should be required to publish a short-form announcement in the newspapers, instead of the full version of the announcement which will be posted on the HKEx website and the issuer's own website. If the issuer does not have its own website, it must publish the full announcement in the newspapers as is currently the case.

The proposals, including the proposed operational model, are described in detail in the exposure paper. Areas covered include the proposed mandatory use of the Electronic Submission System by Main Board and GEM issuers for submission of electronic copies of documents for publication on the HKEx and GEM websites respectively and new submission deadlines and the proposed suspension policy during the transitional period.

The proposals should be beneficial to issuers. In fact, it should result in the lowering of the cost for a Main Board issuer of maintaining its listing on SEHK. Furthermore, an issuer will retain the flexibility to publish announcements in the newspapers if it so wishes, in addition to publication of the announcements on the HKEx website and the issuer's own website.

HKEx believes that the abolition of the requirement to publish paid announcements in newspapers and the introduction of other, news dissemination-related enhancements will benefit the market as a whole.

Exposure Paper

The purpose of the exposure paper is to seek market views:

1. on the detailed wording of the envisaged Listing Rule amendments with a view to removing ambiguities and providing clarity;
   
   
2. on whether the short-form announcement which, as an interim measure, HKEx proposes to require Main Board issuers to publish in the newspapers, should be a summary announcement or a notification (i.e. whether it should be a summary of the contents of the full announcement or whether it should merely serve to notify investors of the publication of an announcement on the HKEx website and issuer's website); and
   
   
3. on the appropriate duration of the interim measure.

The exposure paper can be downloaded from the HKEx website.  Copies are also available from our offices at 11/F, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong.