Introduction

On 16 December 2022, the Stock Exchange of Hong Kong Limited (the Exchange) published a Consultation Paper to seek views on its proposals to expand the paperless listing regime. The key proposals included the following:

• to reduce the number of documents required to be submitted to the Exchange and to mandate document submission to the Exchange by electronic means;
• to mandate electronic dissemination of corporate communications by listed issuers to securities holders after listing; and
• other amendments to the Rules Governing the Listing of Securities on the Exchange (Listing Rules).

On 30 June 2023, the Exchange published the consultation conclusions on its proposals. The Exchange has adopted all of the proposals outlined in the Consultation Paper with some minor modifications.

Streamlining the document submission process

Reducing submission documents

The Exchange will adopt the proposal to remove submission of documents that are unnecessary to the Exchange’s regulatory objectives, as they merely reiterate or overlap with the existing requirements under the Listing Rules or guidance materials, with no additional value for the Exchange’s assessment of listing applications or the regulation of listed issuers. Examples include Forms M105 (Basic qualifications for new listing), M106 (Basic requirements for contents of listing document), M107 (Property valuation) and M108 (Accountants’ report).

The removal of the submission documents will not change the level of due diligence required of a sponsor under the Listing Rules and the Code of Conduct for Persons Licensed or Registered with the Securities and Futures Commission (the Code of Conduct), which set out the requirements relating to, among others, sponsor due diligence and record-keeping. In particular, sponsors are expected to have obtained the relevant documentary proof as part of their due diligence and to reasonably satisfy themselves of the accuracy and completeness of all information provided to the Exchange during the listing application process.

Codifying undertakings, confirmations and declarations

The obligations contained in undertakings, confirmations or declarations regarding compliance by directors, sponsors and certain other professionals will be codified into the Listing Rules and the guidance materials, and submission of those documents will no longer be required. Examples include DU Form, Form M110 (Confirmation and undertaking with regard to biographical information of directors and supervisors and/or information in the Application Proof), a Sponsor’s Undertaking and Statement of Independence, and a Sponsor’s Declaration. The adoption of the proposal would not affect the existing obligations of the directors and the relevant intermediaries.

Removing unnecessary signature or certification requirements

Signature and certification requirements for certain documents will be removed if the purpose of such requirements is only to evidence the sponsor’s approval of the content, or to certify that the submission is a true copy of the original document. Examples include Form M111, e-Form M112 and e-Form M201. Despite the removal of the signature and certification requirements, issuers are required under the Listing Rules to ensure the accuracy and completeness of documents submitted or published, and sponsors are required under the Listing Rules (as well as the Code of Conduct) to reasonably satisfy themselves of the accuracy and completeness of all information provided to the Exchange.

Mandating submission by electronic means

Electronic means will be mandated to be the only mode of submission to the Exchange, unless otherwise specified in the Listing Rules or required by the Exchange. The Exchange will establish the Issuer Platform as a designated channel for two-way communication between the Listing Division and new applicants/listed issuers for this purpose. Requirements for the submission of multiple copies of certain documents in hard copy will be replaced with a requirement for the submission of one electronic copy of those documents.

Digitisation of the Exchange’s authorisation of prospectus registration

The Exchange will explore further with the Companies Registry in respect of the digitisation of the prospectus authorisation and registration processes with a view to mandating:

• issuers or their advisers to electronically submit to the Exchange for authorisation: (i) copies of the prospectus signed by the directors or their authorised agents with their digital signatures; and (ii) copies of the accompanying documents certified as true copies with digital signatures of the issuer’s solicitors; and
• the Certificate of Authorisation and the Authorised Prospectus Documents to be signed or certified by the Exchange with its digital signatures, such that the documents can be electronically provided to the issuer for its onward electronic submission to the Companies Registry for registration.

Electronic dissemination of corporate communications by listed issuers

Corporate communications to the securities holders will be mandated to be disseminated electronically to the extent permitted by the applicable laws and regulations and the constitutional documents of the issuers.

For Actionable Corporate Communications (i.e. any corporate communication that seeks instructions from the issuer’s securities holders on how they wish to exercise their rights or make an election as the issuer’s securities holders), the listed issuers will be required to send them to securities holders individually and in electronic form if functional electronic contact details have been provided.

Effective date and transitional arrangements

A majority of the amended Listing Rules will come into effect on 31 December 2023.

In respect of the amended Listing Rules that mandate electronic dissemination of corporate communications, existing listed issuers and listing applicants seeking to list on the Exchange should ascertain whether their constitutional documents contain any provision that may prohibit them from disseminating corporate communications to their securities holders electronically in accordance with the relevant Listing Rules.

For issuers listed before 31 December 2023, transitional arrangements apply if it is necessary for them to amend their constitutional documents to facilitate electronic dissemination of corporate communications in accordance with the amended Listing Rules:

• issuers that are not prohibited by applicable laws and regulations from complying with the relevant amended Listing Rules will have until their first annual general meeting following 31 December 2023 to make necessary amendments (if any) to their constitutional documents to allow such dissemination; and
• issuers that are unable to comply with the requirements set out in the amended Listing Rules due to any restriction under any applicable laws and regulations would have until their first annual general meeting following the date on which the relevant restrictions are removed from the applicable laws and regulations to make the necessary amendment to their constitutional documents to facilitate their compliance with the relevant Listing Rules.

Listing applicants that are to be listed on the Exchange on or after 31 December 2023 will be required to comply with the amended Listing Rules upon listing to the extent permitted under their applicable laws and regulations.