Market Turnover


Exchange Publishes Consultation Paper on Proposed Amendments to Listing Rules Relating to Treasury Shares and Guidance Letter on Issuers' Automatic Share Buy-back Programs

27 Oct 2023
  • Exchange seeks market feedback on proposals to introduce a new treasury share1 regime and welcomes responses by 27 December 2023
  • Exchange also issues guidance on issuers' automatic share buy-back programs2


The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Friday) published a consultation paper seeking market feedback on proposed rule amendments to introduce a new treasury share regime (Consultation Paper). The two-month consultation period will conclude on 27 December 2023.

The Exchange today also published a Guidance Letter HKEX-GL117-23 on a framework for granting waivers to allow issuers' automatic share buy-back programs conducted on the Exchange to continue throughout the Restricted Period3 (Guidance Letter).

HKEX Head of Listing, Katherine Ng, said: “HKEX is committed to supporting the continued vibrancy, attractiveness and quality of Hong Kong’s listed market. The proposed rule amendments and the Guidance Letter seek to give issuers greater flexibility in managing their capital structure through share buy-backs and resales of treasury shares, enhancing the market’s competitiveness and appeal to both issuers and investors. Proposals will include the introduction of appropriate safeguards to maintain a fair and orderly market in the trading of issuers’ shares, ensuring consistent and fair shareholder treatment.”    

Consultation on Proposed Treasury Share Regime

A summary of the key proposals in the Consultation Paper is set out below:

  • Requirement to cancel repurchased shares removed, so that issuers may hold repurchased shares in treasury subject to the laws of their places of incorporation4 and their constitutional documents;
  • Resale of treasury shares by an issuer governed in the same manner as the Listing Rules that currently apply to an issue of new shares;
  • Fair market maintained, mitigating the risk of stock market manipulation and insider dealing by:
    • imposing a 30-day moratorium period to restrict (i) a resale of treasury shares (whether on or off-market) after a share repurchase; and (ii) an on-Exchange share repurchase after an on-Exchange resale of treasury shares; and
    • prohibiting a resale of treasury shares on the Exchange during the Restricted Period or if it is knowingly made with a core connected person; and
  • Consequential rule amendments made as follows:
    • allowing new listing applicants to retain their treasury shares upon listing, with any resale of these shares subject to the same lock-up requirement as an issue of new shares;
    • requiring issuers (being holders of treasury shares) to abstain from voting on matters that require shareholders' approval under the Listing Rules;
    • excluding treasury shares from an issuer’s issued or voting shares under various parts of the Listing Rules (e.g. public float and size test calculations);
    • requiring an issuer to disclose in the explanatory statement its intention as to whether any shares to be repurchased will be cancelled or kept as treasury shares; and
    • clarifying that a resale of treasury shares by an issuer or its subsidiary includes resale of treasury shares through their agents or nominees.

The deadline for responding to the consultation paper is 27 December 2023. 

Interested parties are encouraged to respond to the consultation paper by completing and submitting the questionnaire.

Guidance Letter on Automatic Share Buy-back Programs

In addition to the proposed treasury share regime, the Exchange published a Guidance Letter setting out the framework for granting a waiver to allow an issuer to conduct an automatic share buy-back program on the Exchange and to continue the program throughout the Restricted Period. 

This is part of the Exchange’s ongoing efforts to provide guidance to the market on listing related matters. The new Guidance Letter highlights the criteria that the Exchange will apply when assessing an issuer’s share buy-back program and waiver application, including the issuer’s size and liquidity of its shares and the mechanisms in place to guard against trading with undisclosed inside information and potential price manipulation.   




  1. Share repurchased and held by an issuer in treasury, as authorised by the law of the issuer's place of incorporation and its articles of association or equivalent constitutional document.
  2. An automatic share buy-back program is a program established by an issuer for its share buy-backs before the issuer is in possession of undisclosed inside information and is lead-managed by a single broker which makes its trading decisions independently of the issuer, subject to pre-determined parameters.
  3. The Listing Rules prohibit an issuer from share repurchases on the Exchange while in possession of undisclosed inside information and during the one month prior to the release of financial results (the Restricted Period).
  4. While most of the issuers listed on the Exchange are incorporated in jurisdictions which allow holding of treasury shares, listed issuers incorporated in Hong Kong are still prohibited from holding treasury shares under the Companies Ordinance (Chapter 622 of Laws of Hong Kong) (Companies Ordinance). Subject to the outcome of the Consultation, the Exchange will work with the relevant parties to further consider the necessary amendments to the Companies Ordinance so that Hong Kong incorporated issuers could also benefit from the treasury share regime as the other issuers.



About HKEX

Hong Kong Exchanges and Clearing Limited (HKEX) is a publicly-traded company (HKEX Stock Code:388) and one of the world’s leading global exchange groups, offering a range of equity, derivative, commodity, fixed income and other financial markets, products and services, including the London Metal Exchange.

As a superconnector and gateway between East and West, HKEX facilitates the two-way flow of capital, ideas and dialogue between China and the rest of the world, through its pioneering Connect schemes, increasingly diversified product ecosystem and its deep, liquid and international markets.

HKEX is a purpose-led organisation which, across its business and through the work of HKEX Foundation, seeks to connect, promote and progress its markets and the communities it supports for the prosperity of all.





Updated 20 Dec 2023