THE STOCK EXCHANGE OF HONG KONG LIMITED
(A wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited)

Amendments to Main Board Listing Rules in Respect of Structured Products

The Stock Exchange of Hong Kong Limited (the Exchange), a wholly owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx), announces amendments to the Listing Rules in respect of expiry announcements for structured products. The changes take effect immediately.

At present issuers of structured products are required to publish a notice in respect of the expiry of each structured product they have listed on the Exchange.  The Exchange has amended Rule 15A.82 to provide that:

• No such notice is required in respect of cash-settled structured products with an automatic exercise option expiring on their normal expiry date or maturity date.
  
  
• The notice in respect of the expiry or maturity of a structured product arising as a consequence of a mandatory call event (a knockout) shall be published on the day the call event occurs. 

“Expiry notices were originally required as a means of reminding investors to check whether to exercise a warrant before it expired.  However, as all cash-settled structured products are required to include an automatic exercise option, if they are in the money on expiry, investors will be automatically paid out without having to take any action.  Consequently, there is little need to advertise the upcoming expiry.  For physically-settled structured products, the requirement for issuers to publish an announcement about such expiries remains, as it is necessary for holders of these products to submit an exercise notice to the issuers,” said Richard Williams, HKEx’s Head of Listing. “As for the requirement that issuers publish announcements concerning knockouts, the move codifies our existing practice,” he noted, explaining the changes.

The revised Listing Rules are available for viewing on HKEx’s website.

Investors may also obtain details about upcoming expiries of structured products by using HKEx’s Derivative Warrant Resource Centre (DWRC) at http://www.hkex.com.hk/eng/prod/secprod/dwrc/dw.htm.