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Exchange Publishes Chapter 37 Consultation Conclusions and Guidance on Disclosures in Listing Documents and Continuing Obligations under Chapter 37

Regulatory
21 Aug 2020

  • Proposals to enhance the Professional Debt Regime have received strong support
  • Exchange also publishes “Guidance on Disclosures in Listing Documents and Continuing Obligations under Chapter 37 – Debt Issues to Professional Investors Only” to promote disclosure consistency and quality of listing documents, and reminds issuers of their post-listing continuing obligations
  • Related Listing Rules amendments and the Guidance to take effect on 1 November 2020

 

The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Friday) published conclusions to its consultation on its proposals to review and enhance the Exchange’s listing regime for debt issues to professional investors only (Consultation Conclusions)1.

The Exchange also today published guidance (Guidance) on disclosures in listing documents and continuing obligations under Chapter 37 of the Listing Rules.

“We had a very supportive response to this consultation, and we are pleased to be announcing enhancements to the listing regime for Debt issues to professional investors only.  These enhancements seek to balance the need to safeguard investors whilst maintaining an effective and appropriate listing platform for the continued development of the bond market in Hong Kong.  We would like to thank all those who made submissions to the consultation,” said Bonnie Y Chan, HKEX’s Head of Listing.

Consultation Conclusions

The Exchange received 22 responses from a broad range of respondents.  The feedback indicated strong support for the consultation proposals to enhance the listing regime for debt issues to professional investors only (Professional Debt Regime).  The Exchange will implement the consultation proposals, with modifications, reflecting comments received.  The changes will be effective on 1 November 2020.

Key changes to the related Listing Rules include:

  • Raising the existing issuer’s minimum net assets requirement from $100 million to $1 billion;
  • Introducing a minimum issuance size of $100 million;
  • Requiring issuers to state explicitly in the listing document the intended investor market in Hong Kong are professional investors only;
  • Requiring publication of listing documents on the Exchange’s website on the listing date; and
  • Introducing other Rules amendments to enhance the regulatory oversight over issuers and guarantors’ in terms of their continuing obligations.

The Consultation Conclusions, respondents’ submissions, amendments to the Main Board Listing Rules and amendments to the GEM Listing Rules are available on the HKEX website.

Guidance

The “Guidance on Disclosures in Listing Documents and Continuing Obligations under Chapter 37 – Debt Issues to Professional Investors Only” provides guidance on disclosure in listing documents and continuing obligations under the Professional Debt Regime. It is not intended to be exhaustive nor prescriptive as to the level and types of disclosures to be included in a listing document. Issuers are reminded of their responsibility to ensure that their listing documents contain information that are customarily expected by investors for making an informed investment decision.

“We believe that the issuance of the Guidance will promote disclosure quality and consistency in the market, as well as remind issuers of their continuing obligations under the Professional Debt Regime,” said Ms Chan.

The Guidance consists of:

  • General guidance on disclosure that issuers should consider when preparing listing documents;
  • Specific guidance on disclosure in relation to particular types of debt securities with specific features; and
  • General guidance in relation to the continuing obligations under the Professional Debt Regime.

The Guidance is available on the HKEX website and will be effective on 1 November 2020.

 

Note 1: The consultation paper was published on 6 December 2019.  The consultation period ended on 7 February 2020.

 

 

About HKEX

Hong Kong Exchanges and Clearing Limited (HKEX) is one of the world’s major exchange groups, and operates a range of equity, commodity, fixed income and currency markets.  HKEX is the world’s leading IPO market and as Hong Kong’s only securities and derivatives exchange and sole operator of its clearing houses, it is uniquely placed to offer regional and international investors access to Asia’s most vibrant markets.

HKEX is also the global leader in metals trading, through its wholly owned subsidiaries, The London Metal Exchange (LME) and LME Clear Limited.  This commodity franchise was further enhanced with the launch of Qianhai Mercantile Exchange, in China, in 2018.

HKEX launched the pioneering Shanghai-Hong Kong Stock Connect programme in 2014, further expanded with the launch of Shenzhen Connect in 2016, and the launch of Bond Connect in 2017.

www.hkexgroup.com

 

Ends

Updated 21 Aug 2020