Disclosure of Interests in Securities of Hong Kong Listed Companies

Preface
Disclaimer

A. INTRODUCTION

1. History of the Disclosure Requirements
2. Outline of the disclosure regime and some key problem areas
3. Sources of the Disclosure Requirements and the Outline of Part XV
4. Attitude of the SFC, enforcement and the position of regulated persons
5. Definitions and interpretation
6. Shares held in and transferred through CCASS

B. DISCLOSURE OF SUBSTANTIAL INTERESTS AND SHORT POSITIONS IN SHARES

1. Key definitions specifically relevant to Substantial Shareholder Disclosure Requirements
2. Disclosure obligations for interests in shares ('long positions')
3. Disclosure obligations for short positions
4. Two-tier structure of Substantial Shareholder Disclosure Requirements
5. Interests and short positions to be disclosed and attribution of other people's interests
6. Changes of issued share capital and rights issues
7. Principal to ensure agent notifies him of transactions
8. Securities lending and borrowing - simplified regime
9. Mutual funds

C. DISCLOSURE OF DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS AND SHORT POSITIONS

1. Key definitions specifically relevant to Directors' Disclosure Requirements
2. Duty of disclosure by directors and chief executives and when it arises
3. Interests and short positions to be disclosed and attribution of other peoples' interests
4. Changes in issued share capital
5. Securities lending and borrowing

D. DEFINING DISCLOSABLE INTERESTS AND SHORT POSITIONS

1. General provisions re: interests and short positions
2. Interests under trusts
3. Rights and obligations in relation to shares
4. Interests under equity derivatives and short positions
5. Cessation of interests
6. Unspecified shares
7. Partial interests and short positions
8. Not possible to determine number of shares interested in; adjustment provisions in convertibles, warrants and other equity derivatives; 'top-up'provisions in security documents

E. INTERESTS AND SHORT POSITIONS TO BE DISREGARDED

1. Interests and short positions to be disregarded for Substantial Shareholder Disclosure Requirements
2. Interests and short positions to be disregarded for Directors' Disclosure Requirements

F. ATTRIBUTION OF FAMILY, CORPORATE AND CONCERT PARTY

INTERESTS AND SHORT POSITIONS

1. Attribution - some general points
2. Family interests
3. Corporate interests
4. Substantial shareholder disclosures: interests of concert party members
5. Exclusions, exemptions and disregards - their application in the context of attributed interests

G. METHOD AND TIMING OF DISCLOSURE - KNOWLEDGE

1. Method of disclosure and publication by Stock Exchange
2. Timing of disclosure: importance of knowledge
3. Knowledge

H. INFORMATION TO BE DISCLOSED - DISCLOSURE FORMS

1. Sources of requirements about information to be disclosed
2. The disclosure forms and codes; complexity and opacity
3. General points about making disclosure, the information to be disclosed and calculations
4. Information to be contained in notifications by substantial shareholders
5. Information to be contained in notifications by directors and chief executives

I. REGISTERS AND DISCLOSURE BY COMPANIES

1. Registers
2. Disclosure in prospectuses, circulars and accounts

J. INVESTIGATIONS INTO INTERESTS IN LISTED COMPANIES

1. Investigations by a listed company into interests in its voting shares
2. Investigations by the Financial Secretary into interests in shares and debentures

K. RESTRICTIONS ON SHARES AND PENALITIES

1. Restrictions on shares and derivatives
2. Offences and penalties

L. EXEMPTIONS FROM PART XV

1. Dual listings (secondary listing in Hong Kong)
2. Issuers of securities other than shares: derivative warrants and structured products

APPENDIX 1 - PRACTICAL EXAMPLES OF OPERATION OF THE DISCLOSURE REGIME

A. IPO
B. Rights issue
C. Placing and top-up
D. Acquisition of listed company stake (and pre-emption rights/section agreement)
E. Family controlled listed company ownership structure
F. Convertible bond issue/adjustment/conversion
G. Grant and exercise of an option
H. Financial services groups: investment managers/custodians/trustees
I. Secured lending and borrowing/syndicates of banks

APPENDIX 2 - SPECIMEN DISCLOSURE FORMAT

A. Drafting points
B. Specimen disclosure section for circular
C. Worked example of disclosure in circular

APPENDIX 3 - NOTICE UNDER SFO SECTION 329

A. Drafting points
B. Form of notice

TABLE OF STATUTORY AND OTHER REFERENCES

TABLE OF CASES

INDEX