Consultation Paper by the Stock Exchange of Hong Kong on the Proposed Listing Regime for SPACs
ISSUING AUTHORITY:
The Stock Exchange of Hong Kong (“Exchange”)
DATE OF PUBLICATION:
September 17, 2021
On September 17, 2021, the Exchange published a consultation paper which aims to solicit market feedback on proposals to create a listing regime for special purpose acquisition companies (“SPACs”) in Hong Kong. A SPAC is a shell corporation that first lists on the stock exchange and then acquires a business (“De-SPAC”) within a pre-defined time period after listing.
A summary of the consultation paper’s key proposals is set out below :
SPAC formation and listing –
● The subscription and trading of SPAC’s securities before De-SPAC are restricted to professional investors.
● SPAC promoters must meet suitability and eligibility requirements and include at least one Type 6 and/or Type 9 institution licensed by the Securities and Futures Commission.
● The funds expected to be raised by a SPAC from its initial offering must be at least HK$1 billion.
De-SPAC Transaction (i.e. the business combination between a SPAC and the De-SPAC Target that results in listing of a Successor Company) –
● The company that is acquired by a SPAC (“De-SPAC Target”) must have a fair market value of at least 80% of funds raised by the SPAC from its initial offering.
● The terms of a De-SPAC Transaction must include independent third-party investment that constitutes at least 15-25% of the expected market capitalisation of the company following the completion of acquiring the De-SPAC Target by a SPAC (“Successor Company”).
● A Successor Company must meet the usual listing requirements, including minimum market capitalisation requirements and financial eligibility tests.
Liquidation and de-listing –
● If a SPAC fails to announce a De-SPAC Transaction within 24 months of the date of the SPAC’s initial listing, or complete the De-SPAC Transaction within 36 months of the date of the SPAC’s initial listing, the SPAC must return the funds it raised to its shareholders, liquidate and de-list.
The deadline for responses to the consultation paper is October 31, 2021.
Reference:
Consultation Paper on Special Purpose Acquisition Companies
Launch of the Cross-boundary Wealth Management Connect Scheme in the Guangdong-Hong Kong-Macao Greater Bay Area
ISSUING AUTHORITY:
Hong Kong Monetary Authority (“HKMA”)
DATE OF COMMENCEMENT:
September 10, 2021
On September 10, 2021, the Cross-boundary Wealth Management Connect Scheme (“WMC Scheme”) was officially launched, allowing eligible Mainland, Hong Kong and Macao residents in the Guangdong-Hong Kong-Macao Greater Bay Area (“GBA”) to invest in wealth management products distributed by designated banks through a closed-loop funds flow channel established among the respective banking systems. The HKMA has promulgated the implementation details for the WMC Scheme, providing supervisory guidance for the Hong Kong banking industry.
The WMC Scheme consists of the Southbound Route and the Northbound Route. The Southbound Route refers to eligible residents in Mainland GBA cities investing in wealth management products distributed by banks in Hong Kong and Macao via designated channels, while the Northbound Route refers to eligible residents in Hong Kong and Macao investing in onshore wealth management products distributed by Mainland banks via designated channels
For the initial stage, eligible wealth management products under the Southbound Route will include deposits, low to medium-risk and non-complex bonds and Hong Kong domiciled funds authorised by the Securities and Futures Commission.
The WMC Scheme is subject to quota restriction. At the initial stage, the Northbound and Southbound Routes will each be subject to an aggregate quota of RMB 150 billion and an individual investor quota of RMB 1 million.
The WMC Scheme will create more business opportunities for the financial industry in the GBA and facilitate cross-border investment, thereby providing more choices of wealth management products for residents of the GBA. It will also further facilitate cross-boundary funds flows and use of Renminbi.
Reference:
Court Rules and Commencement Notice in relation to the Mainland Judgments in Matrimonial and Family Cases (Reciprocal Recognition and Enforcement) Ordinance Gazetted
ISSUING AUTHORITY:
Government of the Hong Kong Special Administration Region (“HKSAR”)
DATE OF GAZETTAL:
August 27, 2021
EFFECTIVE DATE:
February 15, 2022
On August 27, 2021, the Mainland Judgments in Matrimonial and Family Cases (Reciprocal Recognition and Enforcement) Rules (“Rules”) and the Mainland Judgments in Matrimonial and Family Cases (Reciprocal Recognition and Enforcement) Ordinance (Commencement) Notice (“Commencement Notice”), which aim to complement and effect the operation of the Mainland Judgments in Matrimonial and Family Cases (Reciprocal Recognition and Enforcement) Ordinance (Cao. 639) (“Ordinance”), were gazetted.
The Ordinance, which seeks to implement the “Arrangement on Reciprocal Recognition and Enforcement of Civil Judgments in Matrimonial and Family Cases by the Courts of the Mainland and of the HKSAR" (“Arrangement”) in Hong Kong, establishes mechanisms in Hong Kong in respect of the registration of specified orders in Mainland judgments given in matrimonial or family cases, the recognition of Mainland divorce certificates and the application for certified copies of and the issuance of relevant certificates for Hong Kong judgments given in matrimonial or family cases. The Ordinance will come into operation on February 15, 2022.
To complement the operation of the mechanisms established under the Ordinance, the Rules were made, provisions of which cover matters including the practice and procedure relating to applications under the Ordinance and the execution of registered orders, and the fees payable under the Ordinance.
It is trusted that the implementation of the Ordinance and the Arrangement will benefit parties to cross-boundary marriages, families and children. By providing a more expeditious and cost-effective mechanism for reciprocal recognition and enforcement of judgments given in matrimonial and family cases between Hong Kong and Mainland, the need for re-litigation of the same disputes in both Hong Kong and Mainland can be reduced, thereby saving parties’ time and costs and better safeguarding their rights.
References:
Mainland Judgments in Matrimonial and Family Cases (Reciprocal Recognition and Enforcement) Rules
In 2013, Stevenson, Wong & Co. entered into an association with AllBright Law Offices. Stevenson, Wong & Co. is a forward-looking, dynamic law firm with offices in Hong Kong and has been providing clients with effective legal services and solutions since 1978.
Website: www.sw-hk.com E-mail: info@sw-hk.com
Follow us - WeChat: swc_hk / Linkedin: Stevenson, Wong & Co. / Twitter: swcohk
