Hong Kong Exchanges and Clearing Limited (HKEx) has issued this statement in response to media enquiries regarding precautionary measures adopted by Prudential plc (Stock Code: 2378) for its listing by introduction on The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of HKEx, on 25 May 2010.
The precautionary measures are designed to facilitate a reasonable supply of shares and information to investors in order to mitigate any price volatility upon Prudential’s listing on the Exchange. Both the Exchange and the Securities and Futures Commission were consulted on the development of these measures.
Despite the precautionary measures, there is no guarantee that an undue demand/supply imbalance and price volatility can be totally prevented. Investors are reminded to read the listing documents, prospectuses and regulatory announcements in full before making any investment decisions about newly listed securities. If investors have any doubts or want to make reference to trading in other relevant markets, they should consult their brokers or professional advisers.
Highlights of Prudential’s precautionary measures include:
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Batch Removal Process: A batch removal process has been introduced for the removal of Prudential shares registered in the UK to Hong Kong by 25 May 2010 when the listing by introduction will become effective.
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Expedited Removal Process: From 20 May 2010 until 28 June 2010 there will be an Expedited Removal Process* under which it will be possible for a UK shareholder to remove his shareholding to Prudential’s Hong Kong share register and collect the share certificates by 9:00 am (Hong Kong time) from the Hong Kong register on the date falling one London business day plus one Hong Kong business day after the date on which the shareholder has duly submitted a request for removal of his shares and has completed all necessary formalities. The shareholder can then deposit the certificates to CCASS, HKEx’s Central Clearing and Settlement System for securities, for settlement of trades on the Exchange.
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The Expedited Removal Process does not cover the period between 3:00 pm (London time) on 1 June 2010 to 8:00 am (London time) on 8 June 2010 in the UK and from 4:30 pm (Hong Kong time) on 1 June 2010 to 9:30 am (Hong Kong time) on 8 June 2010 in Hong Kong during which removal of Prudential shares between share registers will be frozen in connection with Prudential’s rights issue. The Expedited Removal Process is also subject to applicable conditions and arrangements.
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Details of the conditions and arrangements of the Expedited Removal Service are in the Listing Document.
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Liquidity Arrangement: Three Designated Dealers will conduct stock trading activities on the Exchange from 25 May 2010 to 28 June 2010 with a view to providing liquidity to meet demand for Prudential shares. The Designated Dealers will enter into stock borrowing arrangements with existing shareholders and remove borrowed shares from Prudential’s UK share register to its Hong Kong share register.
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In order to facilitate the liquidity arrangements during this period, the Exchange has granted specific short-selling regulation exemptions to permit the three Designated Dealers to conduct covered short-selling of Prudential shares, input short selling orders during the Pre-opening Session and the Continuous Trading Session, and effect short sales of Prudential shares below the best current ask price. For market transparency, the Designated Dealers will set up designated broker identity numbers solely for these liquidity activities.
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Information to Investors: Prior to its listing by introduction, Prudential and the Designated Dealers will be cooperating to inform the investor community in the UK and Hong Kong of the processes for removing Prudential shares registered in the UK to the Hong Kong register and to inform the investor community in Hong Kong of the liquidity arrangements. Amongst other things, an announcement will be issued in Hong Kong on the next following Hong Kong business day disclosing Prudential shares’ closing price in the UK on each of the three London business days prior to the Hong Kong listing. Other communications, such as briefings and display of relevant historical information on the Prudential website, have been planned by the issuer. |
While the precautionary measures adopted by Prudential are a useful reference for future listing by introduction applications, they are not the only acceptable measures. Arrangements for each listing by introduction application will be based on its circumstances, such as the applicant’s shareholding structure and availability of arbitrage opportunities between Hong Kong and any other market(s) where the issuer is listed, and the relevance of precautionary measures.
Ends