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Exchange Publishes Conclusions from its Consultation on Exempting Aircraft Leasing Activities from its Notifiable Transaction Rules

Regulatory
17 Aug 2018

  • Exchange to amend Listing Rules to exempt qualified aircraft leasing activities, which include aircraft leasing with aircraft operators and acquisitions/disposals of aircraft, from its notifiable transaction rules
  • The exemption will be available to listed issuers that are principally engaged in aircraft leasing, subject to certain criteria and conditions
  • The amendments will take effect on 15 October 2018

 

The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Friday) published its conclusions from responses to its Consultation Paper on Proposed Exemption for Aircraft Leasing Activities1 (Consultation Conclusions).

The Exchange received a total of 16 responses2 from listed issuers, other entities and individuals.  The feedback indicated strong support for the proposal to provide a general exemption for qualified aircraft leasing activities from its notifiable transaction rules.  Having considered the responses, the Exchange decided to adopt the proposals set out in the consultation paper with modifications to the scope of qualified aircraft leasing activities and the alternative disclosure required in announcements and financial reports.

Under the amended Listing Rules:

  • Qualified Aircraft Lessors are defined as listed issuers that are actively engaged in aircraft leasing with aircraft operators as their principal activities. The issuer must also satisfy the following qualification criteria: a) there is a clear disclosure of aircraft leasing as a current and continuing principal business activity in the issuer’s latest published annual report (or its initial public offering prospectus); b) aircraft leasing is reported as a separate and continuing segment (if not the only segment) in the latest published financial statements; and c) the issuer’s directors and senior management, taken together, have sufficient experience relevant to the aircraft leasing industry, and the individuals relied on must have a minimum of five years’ relevant industry experience.

  • Qualified Aircraft Leasing Activities include: a) acquisitions or disposals of aircraft; and b) finance leases or operating leases of aircraft with aircraft operators that are conducted in the ordinary and usual course of business of Qualified Aircraft Lessors.
     
  • Qualified Aircraft Leasing Activities are exempt from the specific disclosure and/or shareholders’ approval requirements normally applicable to notifiable transactions.Issuers are required to provide alternative disclosure by way of announcements and in their interim/annual reports.

The amendments to the Listing Rules will be effective on 15 October 2018.

“With these Rule amendments, we have sought to strike a balance between shareholder protection and allowing management with the required expertise to run the issuer’s business efficiently,” said David Graham, HKEX’s Head of Listing.

The Consultation Conclusions and copies of respondents’ submissions can be downloaded from the “News – Market Consultation” section of the HKEX website.

Amendments to the Main Board Listing Rules can be downloaded from the “Listing – Rules and Guidance – Listing Rules – Amendments to Main Board Listing Rules” section of the HKEX website.

Amendments to the GEM Listing Rules can be downloaded from the “Listing – Rules and Guidance – Listing Rules – Amendments to GEM Listing Rules” section of the HKEX website.

 

Note:

  1. The Consultation Paper was published on 17 November 2017.  The consultation period ended on 22 December 2017.

  2. Twenty submissions were received, of which four were identical in content to other submissions.  Submissions with identical content were counted as one response.

 

Ends

Updated 17 Aug 2018

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