ISSUING AUTHORITY:

The Stock Exchange of Hong Kong Limited (“Exchange”)

DATE OF PUBLICATION:

November 19, 2021

EFFECTIVE DATE:

January 1, 2022

On November 19, 2021, against the backdrop of a growing number of US-listed issuers with their centre of gravity in Greater China (“Greater China Issuers”) seeking “homecoming” secondary listings in Hong Kong, the Exchange published the conclusions to its consultation on its proposals to enhance and streamline the listing regime for overseas issuers.

The proposals to be adopted are summarised as follows:

1.      Dual-primary listings

“Grandfathered” Greater China Issuers and non-Greater China Issuers with non-compliant weighted voting rights (“WVR”) structures and/or variable interest entity (“VIE”) structures may apply directly for a dual primary listing in Hong Kong while maintaining the non-compliant WVR and/or VIE structures, as long as they meet certain eligibility and suitability requirements.

2.      Secondary listing requirements

Greater China Issuers without a WVR structure can secondary list without demonstrating they are an “innovative company” and with a lower minimum market capitalisation at listing than currently required.

3.      Shareholder protection standards

One common set of core shareholder protection standards, concerning the most fundamental shareholders’ rights relating to the notice and conduct of general meetings, members’ right to requisition a meeting, remove directors, vote and appoint proxies etc., will be applicable to all issuers, providing the same level of protection to all investors.

The amended listing regime will become effective from January 1, 2022.

Reference:

Consultation Conclusions on Listing Regime for Overseas Issuers

Launch of HKIAC Case Connect

ISSUING AUTHORITY:

Hong Kong International Arbitration Centre (“HKIAC”)

DATE OF LAUNCH:

November 1, 2021

On November 1, 2021, the HKIAC introduced HKIAC Case Connect, a one-of-a-kind online case management platform developed for the convenience and security of parties and tribunals. Through HKIAC Case Connect, parties and tribunals to ongoing and prospective arbitrations administered by HKIAC or of which HKIAC provides administrative support can access a range of user-friendly case management tools to better manage and conduct their arbitration cases online.

HKIAC Case Connect facilitates case management in the following ways:

● It serves as a repository to which all documents may be uploaded, including, for example, the applicable arbitration rules, the parties’ written pleadings, and the tribunals’ orders. Parties will receive notifications when files have been uploaded.

● The contact information of all participants in arbitration is centrally recorded.

● Parties and tribunals can communicate within HKIAC Case Connect, without the need for external email communication, or use it in conjunction with email communication.

● Users can track deadlines and dates on a case-specific calendar, which can be easily linked to Outlook. The progress of an arbitration can be traced with all activity in a case recorded centrally.

The ongoing Covid-19 pandemic has no doubt acted as a catalyst for the adoption of legal technology in the field of arbitration. HKIAC Case connect is seen to be another form of commitment to innovation by the HKIAC to help facilitate not only the transition from traditional physical hearings to remote hearings but also the resolution of parties’ disputes in an expeditious yet paperless and eco-friendlier manner.

Until the end of 2022, HKIAC Case Connect is provided free-of-charge.

Reference:

HKIAC Launches HKIAC Case Connect

Corporate Governance and ESG (Climate Disclosures) Guidance and Analysis of IPO Applicants’ Corporate Governance and ESG Practice Disclosure in 2020/2021 Published by the Hong Kong Stock Exchange

ISSUING AUTHORITY:

The Stock Exchange of Hong Kong Limited (“Exchange”)

DATE OF PUBLICATION:

November 5, 2021

On November 5, 2021, the Exchange published guidance to listed issuers on climate, as well as an analysis of IPO applicants’ corporate governance and environmental, social and governance (ESG) practice disclosure in 2020/2021.

1.      Guidance on Climate Disclosures

●  Making progress towards mandating climate-related disclosures aligned with the Task Force on Climate-related Financial Disclosures (“TCFD“) framework by 2025 across relevant sectors, the Exchange’s ESG reporting requirements have incorporated certain key recommendations of TCFD including, for example, requiring board’s oversight of ESG matters, targets for certain environmental KPIs and disclosure of the impact of significant climate-related issues.

●  The guide will seek to help companies assess their response to risk arising from climate change and will provide practical tips and step-by-step guidance to assist listed companies in complying with the TCFD recommendations.

2.      Analysis of IPO applicants’ corporate governance and ESG practice disclosure in 2020/2021

Having evaluated the prospectuses of 121 fresh applicants pursuing a primary listing on the Exchange between July 2020 and June 2021, and further tracked the newly-listed issuers’ diversity progress made post listing by studying their corporate governance reports, the Exchange made key findings and recommendations as follows:-

●  ESG matters – It is encouraging to note that around one-third of the applicants disclosed in their prospectuses the board’s oversight of ESG issues and most applicants made disclosures on environmental and social issues at IPO. IPO applicants should conduct a detailed analysis and assessment to identify material ESG risks and consider making appropriate disclosure on climate-related issues and initiatives to reduce carbon emissions, to facilitate the transition to a low-carbon economy. ESG risk management starts before listing, and it is important for IPO applicants to plan ahead to implement the necessary measures to ensure future compliance.

●  Board diversity – A positive result is recorded that the board gender diversity of new IPO applicants has improved significantly, with the percentage of single-gender board applicants falling from 30% in 2019 to 12% in the first half of 2021. IPO applicants are expected to not have single gender boards and should prioritise on achieving board gender diversity.

●  Compliance culture – IPO applicants are expected to instil a strong corporate culture that fully adopts and prioritises compliance and governance measures of integrity and immerse their staff at all levels in a robust compliance culture.

References:

Reporting on TCFD Recommendations – Guidance on Climate Disclosures

Analysis of IPO Applicants’ Corporate Governance and ESG Practice Disclosure in 2020/2021

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.

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