The Securities and Futures Commission (SFC) and The Stock Exchange of Hong Kong Ltd. (SEHK), a wholly owned subsidiary of Hong Kong Exchanges and Clearing Ltd. (HKEx), today publish a joint consultation paper on the proposal to allow the issue of paper application forms for public offers which have electronic prospectuses available on certain prescribed websites (Note 1).
The proposal will allow paper application forms for public offers to be handed out at receiving banks without also having to hand out paper prospectuses if electronic prospectuses are available online and other requirements aimed at investor protection are satisfied (Note 2).
Investors may ask for paper prospectuses at specified branches of receiving banks.
SFC and SEHK have considered several factors when formulating the proposal. These include (i) the increased popularity of the Internet; (ii) the HKEx website as a primary source of issuer information; and (iii) the protection of the environment. The proposal is expected to reduce transaction costs.
Brian Ho, the SFC’s Executive Director of Corporate Finance, said: “Advance in technology and the rapid growth in the use and penetration of personal computers and the Internet in Hong Kong are encouraging innovation and creating opportunities.”
“The proposal, if implemented, will generate the flexibility and practicality that the market requires, and follows in the same policy direction as advocated in the HKEx’s electronic disclosure project. It should also enhance Hong Kong’s attraction as a competitive and efficient international financial centre,” Mr Ho added.
Richard Williams, HKEx’s Head of Listing, said, “Dedicated efforts have been made in recent years to upgrade the capacity and functions available on the HKEx website to support the electronic disclosure project initiative. The newly launched dedicated issuer website at www.hkexnews.hk is seen as a reliable Internet based document repository where prospectus or other issuer-related information can be viewed and downloaded for free. Riding along on this development and our focus on facilitating greater use of electronic communication, the proposal seeks to relax the requirements with respect to the medium for communicating prospectus information yet preserving the ability of all investors to obtain a physical prospectus if they so desire.”
SFC and HKEx invite comments on the proposal by 30 May 2008.
The Joint Consultation Paper is available on the SFC website at www.sfc.hk and the HKEx website at www.hkex.com.hk.
Ends
Notes to editor:
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Subject to negative vetting, it is intended that a class exemption from strict compliance with the requirement not to issue a paper application form unless it is issued with a paper prospectus (Accompaniment Requirement) as contemplated by s.38(3) or 342(3) of the Companies Ordinance be granted to companies that offer shares or debentures that are to be listed on SEHK.
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SFC also intends to grant waivers in respect of offers of interests in SFC-authorised CIS such that paper application forms can be supplied with electronic listing documents if specified conditions are satisfied. These conditions will follow the same spirit as those to the class exemption referred to above.
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a. |
prior disclosure is made via the electronic publication system of HKEx to inform the public that paper application forms will be issued without paper prospectuses;
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b. |
throughout the offer period:- |
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paper prospectuses are made available for collection at specified locations, free of charge, upon request. Specified locations include the depositary counter of HKSCC and designated branches of receiving banks; and
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the electronic prospectus is capable of being downloaded free of charge from the company’s website and the HKEx website (relevant websites);
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c. |
the contents of the electronic prospectus are identical to those of the paper prospectus except for differences permitted or required by SEHK; and
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d. |
both the paper application form and the electronic prospectus prominently state (i) that during the offer period, paper prospectuses are available for collection at specified locations free of charge upon request; and (ii) particulars of the specified locations.
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As a precautionary measure, if the electronic prospectus cannot be downloaded from the relevant websites for four consecutive hours or more, paper application forms must be issued with paper prospectuses until such time as the electronic prospectus becomes downloadable again from either website.
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| 4. |
SEHK intends to amend its Exchange Listing Rules in light of the introduction of the proposed class exemption.
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