Hong Kong – HKEX Consultation Paper Introduces, Amongst Other Proposals, Minor Amendments To Listing Rules.
Impacting Chapter 37 listed debt securities
On 16 August 2024, the Hong Kong Stock Exchange (the “HKEX”) published a Consultation Paper for proposals to (i) further expand the “Paperless Listing Regime” in relation to equity securities and (ii) introduce minor amendments to the Main Board Listing Rules (the “Listing Rules”) which will impact Chapter 37 listed debt securities.
While the Consultation Paper focusses primarily on the expansion of the Paperless Regime as it applies to equity securities, HKEX has also proposed certain minor amendments to the Listing Rules in the Consultation Paper, some of which will be relevant to issuers of Chapter 37 listed debt securities (“Chapter 37 issuers”). For more information on the expansion of the Paperless Regime, please refer to our separate client alert.
This bulletin focusses on the proposed minor amendments to the Listing Rules as they apply to Chapter 37 issuers, which are largely clarificatory in nature and a number of which are in line with the existing approach already adopted by HKEX in relation to its interpretation and application of the relevant Listing Rules. Below is a summary of the proposed amendments.
The consultation is open for comments until 18 October 2024.
Publication of certain prescribed announcements during trading hours
Listing Rule 2.07C(4)(a) currently prohibits the publication of announcements during trading hours, except for certain prescribed announcements which may be published during trading hours (i.e. outside of the usual publication windows). HKEX is proposing to amend LR2.07C(4)(a) to allow the following types of announcements to be published by issuers of Chapter 37 listed debt securities (“Chapter 37 issuers”) during trading hours:
- any announcement pursuant to LR37.46A in response to enquiries from HKEX concerning unusual movements in the price or trading volume of an issuer’s listed debt securities, the possible development of a false market in its listed debt securities, or any other matter;
- any announcement pursuant to LR37.47(b) which is necessary to avoid a false market in the issuer’s listed debt securities; and
- any announcement pursuant to LR37.48(b) relating to public disclosure which the issuer has made on another stock exchange about its listed debt securities.
Use of audited interim accounts for eligibility assessment
Listing Rule 37.06 currently requires an applicant to have produced audited accounts for two years made up to a date that is at most 15 months before the intended date of the listing document.
This “15 month” rule may have the effect of creating a blackout period for issuers (during which their annual accounts have become “stale” for the purposes of eligibility for listing debt securities under Chapter 37). In order to minimise the impact of this blackout period and enhance flexibility for issuers by extending the potential window before an issuer’s financial statements become “stale”, HKEX is proposing to amend LR37.06 so that issuers may submit audited interim accounts as part of their eligibility assessment. Below is a hypothetical illustration showing the practical impact of the proposed change. While this is a welcome development from HKEX, it should be noted that the proposed amendment would only apply to interim accounts that have been audited, and not interim accounts that have been reviewed (which would be the case for a number of issuers).
| Audited accounts submitted by the issuer | Blackout window begins on… | |
| Current position | Annual accounts for the year ended 31 December 2022 Annual accounts for the year ended 31 December 2023 | 1 April 2025 |
| Position following implementation of the proposed change to LR37.06 | Annual accounts for the year ended 31 December 2022 Annual accounts for the year ended 31 December 2023 Interim accounts for the six months ended 30 June 2024 | 1 October 2025 |
Notification requirement in relation to any proposal to amend certain bond documents
Listing Rule 37.49(b) currently requires a Chapter 37 issuer to notify HKEX in advance of any proposal to amend the trust deed. HKEX proposes to amend LR37.49(b) to clarify its expectation that such notification requirement includes any document securing or constituting the debt securities – in practice, this would seem to include documents such as trust deeds, fiscal agency agreements and any security documents.
Other minor amendments
In addition to the above, HKEX proposes to make other minor amendments to the following listing rules:
- Listing Rule 37.53 – to clarify HKEX’s expectation that this Listing Rule requires the provision of annual and interim financial statements by issuers and/or guarantors of Chapter 37 listed debt securities;
- Listing Rule 37.41 – to clarify that a debt programme approved by HKEX is valid for issuing and listing debt securities for one year after the date of the listing document; and
- Definition of “supranational” – to clarify the definition for supranationals (which are exempt from certain eligibility requirements under Chapter 37) by cross referring to a list of multilateral agencies set out in the Securities and Futures Ordinance (Cap. 571), together with any other entities which HKEX may specify from time to time.
For further information, please contact:
William Liu, Partner, Linklaters
william.liu@linklaters.com
