Market Existential | Charltons

In-depth analysis of SFC and HKEX responses to 2025 IPO boom quality issues: record 516 applications received, 119 listings raising HK$285.8 billion, yet deficiencies in documents, overstretched sponsors, unqualified staff, and 16 suspensions prompted joint letter to 13 sponsors in Dec 2025. SFC Circular 30 Jan 2026 details five concerns—serious document deficiencies and process-driven approaches, over-reliance on experts, insufficient principal capacity with new bright-line cap of five active engagements per Principal, unqualified principal appointments, and staff incompetence. Imposes immediate reporting obligations by 6/13 Feb 2026, enhanced HKSI LE Papers 1 and 16 exams with strict transitional rules and prohibitions, mandatory internal reviews and rectification plans by 30 Apr 2026 for Concerned HK Sponsors and Strained Principals, on-site thematic inspections, enforcement actions including licence restrictions, and 300-page document guidance.

HKEX Consultation 13 Mar 2026 proposes WVR threshold halving (Test A to HK$20B, Test B to HK$6B), confidential filing for all applicants with PHIP-only OC announcement, and strengthened return mechanism publicly naming and shaming all professional parties (sponsors, legal advisers, reporting accountants, auditors, industry consultants, experts). Key statistics from 2025 Listing Committee Report on vetting pressures, enforcement (104 cases, 29 actions), and competitive context. Practical implications for sponsors, advisers, and applicants navigating elevated standards and reforms.

#HongKongIPOs #SFCSponsorCircular #HKEXListingReforms

Timecodes:

0:00 Introduction & Opening Remarks

5:02 Regional Context & Market Overview

10:04 Listing Application Quality Concerns

15:00 Regulatory Actions & Returned Applications

20:05 Equity Capital Markets Activity

25:01 Key Consultation Topics Overview

30:01 Listing Eligibility & Requirements

35:00 Role of Professional Parties

40:02 Resource Burden & Review Process

45:00 Consequences of Returned Applications

50:02 Implementation Timeline & Deadlines

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In this comprehensive session, we explore the Chapter 18A regime introduced in 2018 that allows pre-revenue biotech companies to list on the Main Board without meeting the usual profit or revenue tests. The presentation covers the rapid growth of China’s biotech sector, the evolution of the HKEX biotech listing framework, detailed eligibility and suitability criteria (including Core Product requirements, sophisticated investor investment, minimum market capitalisation of HK$1.5 billion, enhanced working capital rules, and intellectual property ownership), listing document disclosure obligations, and the additional continuing obligations that apply post-listing. Recent developments such as the TECH consultation channel, confidential filing option, inclusion in Stock Connect, and updates to public float requirements are also discussed.

Whether you are a biotech company considering an HKEX listing, an investor evaluating Chapter 18A stocks, or a legal professional advising on biotech IPOs, this webinar provides practical guidance and the latest regulatory insights from one of Hong Kong’s most experienced IPO lawyers.

Watch the full recording to understand exactly what it takes for a pre-revenue biotech company to successfully list in Hong Kong today.

#HKEX #BiotechListing #Chapter18A #PreRevenueBiotech #HongKongIPO #BiotechIPO #HKStockExchange

Timecodes:

0:00 China’s Biotech Boom and Capital Markets Context

2:00 HKEX Chapter 18A — Why and How It Started

3:33 Market Impact and Stock Connect Inclusion

5:10 TECH Channel and Confidential Filing Reforms

7:02 Eligibility Framework and Scope of Chapter 18A

8:45 Defining Biotech and Core Product Suitability

10:29 Clinical and Regulatory Milestones — Drugs and Devices

13:37 Accepting Non-Competent Authority Trials — A Case Study

19:06 R&D Focus, Use of Proceeds, and IP Ownership

23:36 Sophisticated Investors and “Meaningful” Investment

25:34 Key 18A Eligibility: Market Capitalisation, Track Record, and Working Capital

29:02 Public Float — Initial and Ongoing Requirements

32:17 Existing Shareholders’ IPO Participation

35:26 Retail Allocation and Practice Note 18

37:21 Listing Document — Reduced Track Record and Core Disclosures

40:42 Disclosure Standards — Clarity, Balance, and Investor Protection

44:10 Summary, Risk Factors, and Industry Overview Requirements

47:38 Competitive Landscape and History & Development

49:24 Business Model, Clinical Data, and Licensing Terms

54:31 Commercialisation, Manufacturing, ESG, and IP Safeguards

56:24 Financial Information — Revenue, Burn Rate, and Funding Outlook

57:59 Continuing Obligations, Transactions, and Identification

59:47 Fundamental Change Restrictions and Delisting Framework

1:01:25 Transition Out of 18A Constraints and Closing

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Part 2: Hong Kong Stablecoin Regulation webinar presented by Julia Charlton. In this comprehensive session, Julia explores the Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) obligations for HKMA-licensed stablecoin issuers, including the requirements for Travel Rule compliance, customer due diligence, wallet risk management, ongoing monitoring, sanctions screening, and suspicious transaction reporting.

The webinar further details the licensing application process, restrictions on offering specified stablecoins to the Hong Kong public, and the various offences under the Stablecoins Ordinance. This recording is essential viewing for fintech companies, virtual asset service providers, banks, and legal professionals in Hong Kong.

#HongKongStablecoin #StablecoinRegulation #HKMA #AMLCFT #TravelRule #StablecoinLicence #CryptoCompliance #HongKongFintech

Timecodes:

0:00 Introduction & AML/CFT Overview

4:25 Customer Due Diligence

14:44 Wallet Risk Management

18:48 Ongoing Monitoring

24:42 Travel Rule Compliance

41:24 Sanctions & Screening

45:10 Suspicious Transaction Reporting

49:39 Record Keeping

53:51 Licensing Application Process

57:12 Offering Restrictions & Offences

1:08:11 Conclusion

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The session offers a detailed analysis of the Hong Kong Monetary Authority’s licensing framework applicable to Specified Stablecoins (fiat-referenced stablecoins). Topics addressed include the scope of regulated activities, eligibility criteria for licence applicants, incorporation requirements, HK$25 million minimum paid-up share capital requirement, fit-and-proper standards for controllers, directors and managers, and the requirement for stablecoins to be fully backed by high-quality, liquid assets.

Additional subjects covered encompass segregation and custody of reserve assets, holders’ redemption rights, white paper disclosure obligations, risk management policies, governance structures, technology and operational controls, complaints handling procedures, incident management, business continuity planning, and orderly wind-down arrangements. The webinar further addresses continuing obligations, regulatory reporting to the HKMA, and offences under the Ordinance.

#HongKongStablecoinRegulation #HKMAStablecoinLicence #SpecifiedStablecoins #StablecoinsOrdinance #HKMAStablecoin #HongKongFintech #VirtualAssetsHK #CharltonsLaw #CPDWebinar #StablecoinIssuer #FiatReferencedStablecoin

Timecodes:

00:00 Introduction and Welcome

00:33 Agenda for Today's Webinar

01:15 Background & Foundation of the Regime

03:20 Definition of Specified Stablecoin

04:20 Exclusions from Regulation

05:10 Licensing Requirement

06:28 Offences for Unlicensed Activities

08:00 Eligibility Criteria

09:51 Financial Resources

11:14 Fit and Proper Standards

17:11 Full Reserve Asset Backing

26:35 Redemption Rights

29:09 Issuance Mechanism

30:55 Third Party Arrangements

36:20 Risk Management Framework

43:28 Technology & Operational Controls

49:11 White Paper & Disclosure Obligations

59:30 Conclusion

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Comprehensive review of the SFO insider dealing regime, including offence elements, defences, enforcement powers, notable cases, proposed extraterritorial expansions, and the SFC’s Market Sounding Guidelines (effective 2 May 2025).

#InsiderDealingHK #SFOHongKong #SFCMisconduct

Timecodes:

00:00 Overview of Insider Dealing Regime

00:01:50 Enforcement & Classic Insider Trading

00:03:49 Takeover Context & Dawn Raids

00:04:58 Tipping & Overseas Extension

00:09:43 Mens Rea & Securities Definitions

00:13:10 Overseas Shares & Section 300

00:16:24 Extraterritorial Expansion & Connected Persons

00:19:42 Related Corporations & Inside Information

00:23:12 Generally Known & Materiality Tests

00:28:27 Dealings & Core Defences

00:31:43 Additional Defences & Safe Harbours

00:36:21 Innocent Purpose (Yiu Hoi Ying)

00:41:20 Civil Regime & MMT Powers

00:45:00 Inquisitorial Nature (Cheung Chak Nok)

00:50:13 MMT Sanctions

00:53:35 Circumstantial Proof Cases

00:58:52 Criminal Liability & Rights

01:02:11 Officers’ Duties

01:05:21 Section 203 & Tiger Asia

01:08:43 Doo Jun & Retech Cases

01:12:27 Additional Cases & Sentencing

01:19:35 Restriction Notices

01:25:04 Proposed Amendments Scope

01:31:38 Expansion Features & Mens Rea

01:36:31 Market Sounding Guidelines

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Comprehensive analysis of Chapter 18 Main Board Listing Rules for mineral and petroleum companies, covering eligibility criteria, waivers from financial tests, resource portfolio and rights requirements, Competent Person’s Reports, accepted reporting standards, disclosure obligations, and continuing obligations for listed issuers.

#MineralCompaniesHKEX #HKEXChapter18 #MiningListing

Timecodes:

00:00 Overview & Context

01:43 Guidance & Definition

05:00 Transaction Classifications

06:37 Core Eligibility

10:17 Exemption from Financial Tests

13:22 Case Example & Management Experience

16:37 GEM Differences & Disclosures

20:11 Rights, Risks, ESG

23:11 Financial Sensitivity & CPR

26:31 CPR Scope & Waivers

31:17 Competent Person Qualifications

36:11 Report Currency & Dispensations

39:25 Accepted Standards

42:45 Resource Substantiation

46:25 Petroleum Disclosures & NPV

51:33 Continuing Obligations

53:13 Transactional Rules

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In-depth analysis of the Treasury Shares regime for issuers listed on The Stock Exchange of Hong Kong Limited, including Listing Rule requirements, Companies Ordinance amendments effective 17 April 2025, and practical compliance considerations such as segregation in CCASS, resale mandates, and disclosure obligations. The session also examines the inward Company Re-domiciliation regime effective May 2025, detailing eligibility, application process administered by the Companies Registry, legal continuity, and taxation treatment.

#TreasurySharesHK #CompanyRedomiciliation #HKEXListingRules

Timecodes:

00:00 Introduction & Agenda

00:01:32 Legacy Rules & Rationale

00:03:08 Companies Ordinance Amendments

00:04:40 Treasury Shares Definition & Holding

00:06:12 Rights Suspension & Segregation

00:07:48 CCASS Mechanics by Jurisdiction

00:10:51 Repurchases & Resale Mandates

00:12:30 General Mandate Limits & Pricing

00:14:18 PRC A/H Share Rules

00:15:28 Connected Transactions & Share Schemes

00:16:56 Dealing Restrictions & Blackouts

00:20:12 New Listings Lock-ups

00:21:36 Mandate Documentation & Disclosures

00:23:19 Treasury Resale Reporting

00:24:44 Voting, Float & Codes Treatment

00:27:55 Part XV Disclosure of Interests

00:29:26 Companies Ordinance Treasury Regime

00:31:13 Membership & Rights Suspension

00:32:40 Bonus Shares & Capital Effects

00:34:01 Statutory Filings & Stamp Duty

00:37:14 Background to Redomiciliation

00:40:26 Legal Identity Continuity

00:42:05 Scope & Eligible Types

00:43:38 Eligibility Criteria

00:45:16 Solvency & Protections

00:47:18 Application Form Essentials

00:48:28 Foundational Documents

00:50:07 Foreign Law Legal Opinion

00:53:09 Financials & Board Certificate

00:54:46 Process & Approval

00:56:25 Post-Redomicile Filings

00:59:44 Debentures Obligations

01:01:20 Taxation & Stamp Duty

01:02:53 Transition & Records

01:04:29 Sectoral Regulators

01:06:06 Closing

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Julia Charlton: https://www.charltonslaw.com/the-firm/people-culture/team-profile/julia-charlton/

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Relive Legalink's Fintech Group webinar on UK-focused crypto litigation and investigations, moderated by Julia Charlton of Charlton's Law in Hong Kong. David Bowman, Legal Director at Weightmans, examines the legal status of crypto assets under English law, landmark cases from AA v Persons Unknown to recent fraud recoveries, and forthcoming regulatory developments including stablecoin frameworks and ETNs in 2026. Steve Sandford, Partner at CyXcel, covers practical tracing of illicit transactions, blockchain forensics, AI-enhanced investigations, and threats such as cross-chain crime and quantum computing.

Discover expert insights into crypto property rights, jurisdictional challenges, asset recovery tactics, and global cooperation against ransomware and scams. Essential viewing for legal, compliance, and fintech professionals in the digital asset space.

#CryptoLaw #UKFintech #DigitalAssets

Timecodes:

0:00 Introduction & Global Crypto Context

6:04 Speaker Introductions

6:04 Crypto Assets Defined & Market Facts

10:16 Key Terminology Explained

13:44 UK Legal Foundations

18:58 Law Commission & Digital Assets Bill

20:47 Landmark Crypto Cases

36:25 Enforcement & Regulatory Roadmap

40:08 Investigations Landscape

45:57 Cross-Chain Obfuscation

50:01 Core Tracing Methods & OSINT

56:00 AI Tools & DeFi Challenges

1:02:03 Emerging Threats (Quantum, Privacy)

1:07:15 Recovery Strategies & Case Studies

1:09:49 Q&A: International Cooperation

1:13:34 UK Regulation Pace

1:18:00 Blockchain Traceability & AI

1:25:10 Developer Duties & DAOs

1:30:09 Stablecoin Peg Compliance

1:27:38 Closing Outlook

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This webinar recording provides an overview of the Hong Kong Stock Exchange Listing Rule changes that took effect on 4 August 2025, including the introduction of the tiered initial public float thresholds and the new initial free float requirement. It also explains the key amendments to IPO share allocation and pricing mechanisms, and other consequential Hong Kong Stock Exchange Listing Rule updates.

The session further discusses the Hong Kong Stock Exchange’s further consultation on the public float regime, including the proposed ongoing public float thresholds, disclosure requirements, and consequences of significant public float shortfalls.

#HKEX #HKEXListingRules #PublicFloat #IPOAllocationReforms #HKEXConsultationPaper#HKEXOpenMarket

Timecodes:

0:00 Context & Market Backdrop

1:42 Adopted Proposals

3:19 Tiered Float Thresholds

4:57 Scope & Instruments

6:49 Float Calculation Revisions

10:06 Overseas Listings & DRs

11:22 Revised “Public” Definition

13:00 Float Disclosure Rules

14:36 Minimum HK Listing Portion

16:07 New Free Float Requirement

19:19 Ongoing Float Proposals

22:29 H-Share Ongoing Rules

24:03 Transitional Arrangements

25:35 No Waivers & OTC

27:06 Disclosure Framework

31:50 Breach Handling

34:58 Shortfall Criteria

38:18 Enforcement Powers

39:55 Takeovers & Relief

41:28 IPO Allocation

43:08 Clawback Mechanisms

48:08 Other Amendments

49:53 Valuation & Notices

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This 22 September 2025 webinar describes Hong Kong's Virtual Asset Trading Platform (VATP) licensing regime under the Hong Kong Anti-Money Laundering Counter-Terrorist Financing Ordinance (AMLO) and Hong Kong Securities and Futures Ordinance (SFO). It outlines the scope of the regime, licence application requirements, and ongoing obligations including token reviews and AML compliance.

2025 updates to the regime include a streamlined application process, the ability to provide staking services subject to conditions, and more stringent custody protocols.

#HongKongVATPLicensingRegime2025 #SFCVirtualAssetStakingAndCustodyUpdates #CryptoTradingPlatformComplianceObligations #SFC #HongKongVATPs #AMLO #SFO

Timecodes:

0:00 Overview and Dual-Regime Framework

1:58 AMLO Licensing Scope and Active Marketing Prohibition

3:40 What Counts as a VATP and Service Scope Limits

5:22 Virtual Asset Definition and Exclusions

6:49 SFO Licensing Triggers and Offshore Marketing Ban

8:45 Regulatory Materials and Eligibility for Licensing

10:37 Financial Resources and Responsible Officers

12:05 Ownership, Fit-and-Proper Tests, and Manager-in-Charge

15:38 MIC Oversight, Premises Approval, and Record-Keeping

17:24 Streamlined Licensing and External Assessments

21:09 Licence Conditions, Reporting, and Service Changes

23:01 Token Admission Governance and Ongoing Monitoring

24:43 Due Diligence and Retail Token Admission Criteria

28:21 Retail Access Controls and Stablecoin Policy

30:01 Investor Segmentation and Qualified Corporate PIs

31:52 Product Restrictions and Prohibited Activities

33:40 Client Onboarding, Knowledge, and Suitability

37:07 Disclosures and Transparency Requirements

38:52 Custody Structure and Core Controls

42:21 August 2025 Custody Enhancements

44:24 Third-Party Wallet Oversight and Readiness

46:16 Compensation Arrangements and Coverage

48:04 AML/CFT Obligations and Travel Rule

50:04 Audit, Financial Reporting, and Approvals

51:36 Notifications and Regulatory Filings

53:32 Staking Services Conditions and Fund Participation

55:19 Continuous Professional Training Requirements

56:16 AMLO Offences for Non-Securities Virtual Assets

57:06 SFO Offences for Security Tokens and Offers

59:00 Disciplinary Powers and Court Remedies

1:00:16 Closing Remarks

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This 19 September 2025 webinar describes directors' liabilities and disclosure duties for directors of Hong Kong Stock Exchange-listed companies. It outlines SFO and Companies Ordinance requirements, directors' fiduciary duties, and HKEX Listing Rules' requirements for announcements on dividends, appointments, and share issuances. Enforcement covers Market Misconduct Tribunal sanctions and HKEX powers such as trading halts.

2025 developments include Listing Rule changes and a public float consultation. Inside information criteria, safe harbors, and systems for compliance are described.

#HKDirectors #HKEXListingRules #SFOCompliance #DirectorsDuties #HKEX #SFC #DirectorsTraining

Timecodes:

0:00 Framework and Scope of Directors’ Responsibilities

1:41 Statutory, Regulatory, and Common Law Duties

3:22 Guidance Materials and Directors’ Core Obligations

5:06 Standards of Skill, Care, and Diligence

6:40 HKEX Disciplinary Powers and Sanctions

8:26 Public Float and Section 214 Disqualification

10:15 Director Contact Details and Announcement Basics

11:41 Timely Results and Corporate Changes Announcements

13:20 Director/CEO Appointment Disclosures and INED Requirements

15:08 Assessing INED Independence

16:45 Ongoing Independence Confirmation and Company Secretary Standards

19:50 Waivers, Compliance Advisers, and Senior Changes

21:18 Continuous Disclosure on Directors and Senior Management

22:58 Share Capital Changes and Next Day Disclosure

24:52 5% Threshold Events and Monthly Returns

28:00 Public Float, Pre-vetting, and Circulars

31:13 Financial Reporting and Distribution Timelines

33:03 Preliminary Results, Suspensions, and Audit Opinions

34:45 Board Governance and Voting Restrictions

36:08 Shareholder Protections and Dealing Codes

37:44 Inside Information: Definition and Disclosure Duty

39:20 Specificity, Public Knowledge, and Materiality

40:53 Timing, Escalation, and Holding Announcements

42:29 Safe Harbours and Confidentiality Preservation

44:22 Waivers, Officer Liability, and Systems of Control

45:46 Profit Warnings, Alerts, and Transaction Completion

49:14 Enforcement, Penalties, and MMT Orders

52:17 False Market, Enquiries, and Trading Halts

53:42 Trading Suspensions and Exchange Directions

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Moderated by Julia Charlton, co-chair of Legalink’s Fintech Group, the webinar discussed 2025 U.S. digital asset regulation shifts with speakers Jordan Yeagley (Buchanan, Ingersoll & Rooney) and Joe Basrawi (Carter Ledyard).

Yeagley outlined the U.S. Department of Justice’s move from “regulation by prosecution” to rules-based guidance, targeting fraud and embezzlement in crypto while deprioritizing regulatory violations unless willful. The DOJ closed misaligned investigations and disbanded its cryptocurrency enforcement team. A Strategic Bitcoin Reserve was established by executive order, with states like New Hampshire following, though not yet statutory. The Clarity Act proposes classifying “digital commodities” separate from securities, shifting oversight from the SEC to the CFTC.

Basrawi detailed the Genius Act (Senate) and Stable Act (House), offering a federal license for stablecoin issuers to bypass state patchwork. Smaller issuers (less than $10B) under the Genius Act can choose federal or state-certified rules; larger ones must follow federal regulations. Both require 1:1 U.S. dollar or Treasury reserves, allow non-bank issuers, and may create “synthetic banks.” The Stable Act bans stablecoin interest and enforces stricter state rules, while the Genius Act is more flexible, requiring legislative alignment. Stablecoins are excluded from securities classification under the Genius Act.

The U.S. aims to lead global crypto policy, impacting markets trading with it. Interoperability and federal preemption remain unresolved, but stablecoins may soon transform institutional trade, with consumer adoption slower.

#CryptoRegulation #StablecoinLegislation #USFintech

Timecodes:

0:00 - Introduction & Webinar Overview

3:39 - DOJ’s New Crypto Enforcement Approach

15:16 - DOJ Policy in Action: Case Studies

18:26 - Strategic Bitcoin Reserves: National & State

21:32 - Clarity Act: Redefining Digital Assets

30:34 - US Crypto Reset: Genius & Stable Acts

39:46 - Stablecoins: Market Impact & Policy Goals

46:50 - Genius Act Deep Dive: Licensing & Reserves

57:21 - Compliance Challenges for Stablecoin Issuers

1:00:03 - Genius vs. Stable Act: State vs. Federal

1:08:47 - Q&A: Legislative Timelines & Politics

1:17:12 - Q&A: Stablecoins in Commerce & Banking

1:21:14 - Q&A: Global Impact & Regulatory Harmony

1:30:21 - Q&A: SEC vs. CFTC & Interoperability

1:35:51 - Conclusion & Future Outlook

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Julia Charlton discusses upcoming amendments to the Hong Kong Stock Exchange's Corporate Governance Code, set to take effect on July 1, 2025. These amendments focus on enhancing board effectiveness and independence, increasing diversity, improving risk management, and introducing greater disclosure requirements on dividend policies.

Key changes include the introduction of a Lead INED role to serve as an intermediary and communication channel for directors and shareholders. The Exchange will also impose a cap on the number of concurrent Hong Kong-listed company directorships for independent non-executive directors (INEDs) and implement a nine-year cap on INED tenure to promote board refreshment.

The Listing Rules will enforce mandatory continuous professional development for directors to keep them updated on key industry and regulatory developments. New provisions will require separate disclosure of gender ratios across the workforce and senior management, as well as set out requirements for maintaining a board skills matrix.

The Exchange aims to improve transparency and constructive communication between boards and shareholders by mandating disclosures related to board performance reviews and dividend policies. Finally, while not all suggestions such as increasing INEDs to a majority in boards were adopted, the Exchange acknowledges these concerns for potential future consultations.

#CorporateGovernance #HongKongStockExchange #ListingRules

Timecodes:

0:00 Introduction to Corporate Governance Amendments

1:38 Consultation Process and Governance Aims

3:27 Guidance and Transitional Provisions

4:11 Lead INED Role Introduction

9:32 Shareholder Engagement and CPD Mandates

14:39 Board Performance Reviews and Skills Matrix

20:31 Cap on INED Directorships

24:11 Nine-Year INED Tenure Cap

31:07 Board and Workforce Diversity Requirements

37:13 Risk Management and Internal Control Reviews

42:02 Dividend Policy Disclosure Requirements

43:52 Additional Listing Rule Changes and Conclusion

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Julia Charlton discusses the Hong Kong Stock Exchange's proposals to optimize IPO price discovery and open market requirements, aiming to enhance the competitiveness of Hong Kong's securities market. The exchange's proposed reforms focus on the IPO price discovery process and open market requirements, particularly the public float calculation and listing rules.

Current public float calculations include shares not publicly traded in Hong Kong, such as PRC issuers’ A-shares listed in the PRC, which the exchange argues do not contribute to an open market. The exchange proposes calculating public float by considering only the class of shares listed on the Hong Kong Exchange, aligning with practices in London, Australia, and Singapore. For PRC issuers, the exchange suggests modifying the public float calculation to ensure H-shares represent a meaningful percentage of all issued shares with similar rights.

The exchange proposes removing certain shares from the public float calculation, such as those with weighted voting rights, promoter shares, or held in trust for share schemes. Tiered initial public float thresholds based on market cap are suggested, potentially reducing public float requirements for large-cap companies and addressing regulatory disparities. The exchange suggests an initial free float requirement for at least 10% of listed shares to be freely tradable, proposing new rules for PRC issuers and specialist technology companies.

Proposed changes in the IPO offering mechanism include a staggered lockup period for cornerstone investors and ensuring a significant portion of IPO shares is allocated to the bookbuilding tranche to enhance price discovery. The exchange also explores adjustments to pricing flexibility during IPOs, allowing upward or downward adjustments to the final offer price within specific limits, while seeking feedback on maintaining or reducing the current offer price range limits.

#HKEXIPOReforms #HongKongStockExchange #PublicFloatRequirements

Timecodes:

0:00 Introduction to Proposed Reforms

1:42 Public Float Calculations and International Comparisons

4:39 Proposed Changes for PRC Issuers and Weighted Voting Rights

6:24 Tiered Public Float Thresholds and Market Value Requirements

9:47 Adjusting Public Float Requirements to Enhance Market Flexibility

13:05 Initial Free Float Proposal and Compliance Disclosure

22:24 Open Market Requirements and Valuation Calculations

36:14 IPO Offering Mechanism and Cornerstone Investor Lockups

39:33 Bookbuilding Process and Allocation Policies

42:37 Subscription Tranches and Clawback Mechanisms

45:58 Enhancing Pricing Flexibility and Final Offer Price Adjustments

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The Code on Takeovers and Mergers, also known as the Takeovers Code, was introduced in Hong Kong in 1975 and is voluntary, relying on market participants' willingness to comply rather than legal enforcement. The Code is overseen by the Executive Director of the Corporate Finance Division of the SFC and applies to public companies and those with a primary listing in Hong Kong.

Breaches may result in private reprimands, public censures, or compensation requirements for shareholders. The Takeovers Code outlines ten general principles to ensure fair treatment of shareholders and has specific rules covering voluntary and mandatory offers. Voluntary offers can include conditions unless they are within the control of the offeror or offeree, while mandatory offers are required if the offeror gains over 30% of voting rights.

Both types of offers have specific provisions regarding offer prices, share acquisitions, and cash alternatives. Advisors, including financial and legal experts, play key roles in advising companies during offers and ensuring compliance with the Code. Announcements must be made under certain conditions, such as when takeovers become imminent or during share price fluctuations.

Disclosure rules require that dealings in securities by offer parties and associates be reported, while insider dealing provisions aim to prevent misuse of price-sensitive information. Directors bear obligations to act in the best interests of their company, comply with the code, and ensure accurate information is provided, with the overall aim of safeguarding shareholder interests.

#TakeoversCode #CorporateFinance #HongKongMergers

Timecodes:00:00 Introduction to the Takeovers Code01:47 General Principles of the Takeovers Code03:19 Voluntary and Mandatory Offers09:13 Conditions and Waivers for Mandatory Offers16:50 Advisors and Dissemination of Information23:51 Announcements and Disclosure During Offers32:42 Insider Dealing and Securities Restrictions39:17 Offer Documents and Shareholders’ Rights56:26 Director Responsibilities and Conclusion

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The webinar discusses the implementation of the Book Building Conduct Requirements as part of the SFC's Code of Conduct and the related amendments to the Stock Exchange's Main Board and GEM listing rules, which took effect in August 2022. These requirements arise from concerns identified by the SFC surrounding Hong Kong's book building and placing activities, including issues such as inflated demand and misaligned sponsor fees, leading to compromised due diligence.

A key feature includes the introduction of the "sponsor coupling" requirement mandating that at least one overall coordinator of Main Board IPOs also acts as an independent sponsor. The SFC found issues with transparency and the order book during its review, prompting the new conduct requirements to clarify roles and improve fee arrangement transparency. The conduct requirements define roles for intermediaries, known as Capital Market Intermediaries (CMIs), and establish clear guidelines for their operation in book building and placing activities to bolster transparency and accountability.

Specific obligations outlined for CMIs include providing detailed assessments of issuers, establishing governance processes for offerings, and ensuring proper documentation and early formal appointments defining roles and responsibilities. These measures aim to guarantee effective compliance with regulatory standards, mitigate conflicts of interest, and improve market practices for share and debt offerings in Hong Kong.

The dissemination and update of information are crucial, with OCs required to disclose certain details to the SFC four business days before the listing committee hearing to facilitate oversight and standardize processes. Additional guidelines and template forms have been provided by ASIFMA to aid CMIs in adhering to the new regulations, reflecting a comprehensive industry approach to improving the integrity and robustness of the capital markets in Hong Kong.

#BookBuildingRequirements #CapitalMarketIntermediaries #HongKongIPORegulations

Timecodes:00:00 Introduction to Book Building Conduct Requirements01:37 Concerns and Proposals by SFC04:43 Misconduct and Market Manipulation in IPOs06:25 Implementation of Book Building Conduct Requirements09:39 Definitions and Scope of Book Building Activities11:11 CMI Roles and Responsibilities14:13 Conduct Standards and Issuer Assessment15:59 Early Appointments and Fees17:28 Sponsor Coupling and Its Importance18:56 Marketing Strategies and Investor Targeting20:14 Allocation Strategies and Transparency21:48 Prohibition on Rebates and Preferential Treatment23:18 Communication and Record Keeping24:50 Conflict of Interest Management26:34 Obligations and Reporting Requirements for OCs31:07 Listing Rules and Regulatory Compliance49:52 Conclusion52:43 Closing Remarks

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The webinar introduces significant changes related to the treasury share regime and the proposed company re-domiciliation scheme in Hong Kong, focusing first on the treasury share regime that began in June 2024. The Hong Kong Stock Exchange amended its listing rules to allow repurchased shares to be held in treasury, aligning with 92% of companies incorporated in jurisdictions like the PRC, Bermuda, and Cayman Islands, where this practice is permitted.

Previously, the repurchase of shares resulted in cancellation, restricting the holding of treasury shares due to concerns about market manipulation and insider trading. Now, companies can adjust their share capital more dynamically, with treasury shares still retaining their listed status, subject to local jurisdiction laws. The second part of the presentation discusses the proposed company re-domiciliation regime, driven by a need for economic alignment and corporate governance improvements.

The new regime, aiming to simplify the re-domicile process, will allow overseas companies to retain legal status while operating under Hong Kong law, aiding those from low-tax jurisdictions seeking Hong Kong’s financial benefits. Companies must meet solvency and compliance criteria, including member approval for the re-domicile, without undergoing complex restructuring. This regime is not currently extended to companies limited by guarantee, considering a lack of demand, while the Hong Kong government will closely monitor potential outward re-domiciliation needs.

Finally, comparisons with other jurisdictions like Singapore and the UK are made, highlighting Hong Kong's approach to avoiding economic substance tests and aligning closely with global re-domiciliation norms.

Read more: https://www.charltonslaw.com/hong-kongs-proposed-company-re-domiciliation-regime/

#FinancialRegulations #TreasuryShares #HongKongBusiness

Timecodes:00:00 Introduction to New Financial Regulations03:23 Historical and Legal Context of Treasury Shares06:42 Legal Framework and Definitions of Treasury Shares09:42 Operational Requirements for Holding Treasury Shares12:51 Restrictions on Resales and Market Conduct 16:15 Detailed Guidelines for Specific Transactions18:54 Legal Safeguards against Market Manipulation22:19 Shareholder Communication and Reporting Obligations27:15 Voting Rights and Shareholder Dynamics29:21 Disclosure of Interest and Stamp Duty Implications31:12 Introduction to Proposed Hong Kong Re-domiciliation Schemes35:58 Legislative and Economic Implications38:43 Application Requirements and Process for Re-domiciliation44:19 Financial and Taxation Issues Surrounding Re-domiciliation47:15 Comparisons with Global Re-domicile Regimes58:20 UK’s Proposed Re-domiciliation Framework62:45 Conclusion of the Webinar

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The webinar discusses the listing of mineral and petroleum companies on the Hong Kong Stock Exchange, focusing on the specific requirements laid out in Chapter 18 of the Main Board Listing Rules. Chapter 18 allows these companies to bypass certain financial tests required for listing, provided they meet specific criteria related to resource indication and management experience.

Mineral companies must demonstrate that their core activities involve exploration and extraction, with significant assets and rights in these activities, while listing also mandates sufficient working capital for future operational expenses. Notably, the Exchange may grant waivers for material exclusion from Competent Person's Reports if certain conditions are met, such as early exploration stages or lack of available information.

Disclosure standards require that both mineral and petroleum resources and reserves are reported using internationally recognized frameworks, such as the JORC Code or PRMS, ensuring transparency and consistency. Furthermore, listed mineral companies must provide regular updates on exploration and production activities and disclose information about resource and reserve changes in their annual and half-yearly reports.

Companies acquiring new assets must include a Competent Person's Report and, for acquisitions, a valuation report prepared by a competent evaluator. The Exchange stresses the importance of a clear path to commercial production and imposes strict guidelines on reporting standards to protect investors.

Finally, the Exchange allows exceptions and waivers for certain reporting and disclosure requirements, underscoring a flexible but stringent regulatory environment.

Read more: https://www.charltonslaw.com/hong-kong-law/listing-mineral-companies-on-the-hong-kong-stock-exchange/

#FinancialRegulations #MineralCompanies #HongKongStockExchange

Timecodes:00:00 Introduction and Overview of Listing Requirements01:52 Definition and Classification of Mineral Companies05:05 Eligibility Requirements for Listing as a Mineral Company06:35 Exploration Rights and Working Capital Requirements10:00 Exemptions from Financial Tests and Path to Commercial Production11:31 Gaining Waivers and Proving Experience16:08 GEM Listing Rules and Additional Disclosure Requirements21:04 Reporting Standards and Competent Person’s Reports24:37 Valuation Reports and Disclosure Standards48:37 Continuing Disclosure Obligations and Notifiable Transactions53:12 Conclusion

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The webinar elaborated on Hong Kong's regulatory framework for virtual asset trading platforms, emphasizing its two licensing regimes under the AMLO and SFO. The speaker explained the comprehensive licensing requirements, which include submitting a consolidated application through the SFC's WINGS platform, meeting stringent eligibility criteria, and fulfilling continuous obligations like financial reporting and external assessments.

Hong Kong's regulatory efforts aim to align with FATF recommendations, protect investors, and support the city's ambition to be a global crypto hub. The AMLO regime, effective since June 2023, mandates licensing for platforms trading non-security virtual assets and subjects violators to severe penalties, including imprisonment and fines.The recent JPEX scandal, resulting in significant investor losses and arrests, highlighted the risks of trading on unlicensed platforms and underscored the need for strict regulation and enforcement against breaches.

The speaker described the SFC's proactive measures in response, such as issuing warnings about unlicensed entities and establishing a joint working group with police to investigate suspicious activities.The webinar stressed the importance of trading on fully licensed platforms, noting that only platforms like OSL and Hashkey are currently licensed, while others operate under deemed licensing awaiting approval.

Continuing professional training for responsible officers and licensed representatives is mandatory to ensure compliance, with a focus on risk management, client protection, and market integrity. Finally, the speaker concluded by emphasizing Hong Kong regulators' commitment to enforcing the virtual asset trading regulations, protecting investors, and enhancing public awareness through education initiatives and media campaigns.

#VirtualAssets #HongKongRegulations #CryptoTrading

Timecodes:00:00 Introduction to Hong Kong's Virtual Asset Licensing Regime01:52 Current State of Licensing Regimes03:29 Regulatory Alignment and Future Prospects05:18 Licensing Requirements and Regulatory Objectives11:24 Expanded Licensing Scope and Exemptions13:08 Technical and Operational Licensing Criteria14:40 Compliance, Qualifications, and Management Standards18:15 Roles, Responsibilities, and Corporate Governance21:13 Senior Management Accountability and Core Functions26:09 Application Process and External Assessment30:45 Working with Financial Institutions and Sandbox Environment32:19 Monthly Reporting and Activity Restrictions35:36 Committee Structures and Asset Monitoring39:02 Client Protection and Due Diligence Standards43:59 Custody and Compensation Requirements01:01:39 Compliance and Enforcement01:10:02 SFC's Regulatory Lists and Warnings01:11:53 Enhanced Oversight and Scandal Response01:13:35 JPEX Case Study and Broader Implications01:35:01 Conclusion and Investor Recommendations

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The webinar discussed the proposed regulatory frameworks for virtual asset OTC services and stablecoin issuers in Hong Kong. The Hong Kong government aims to address money laundering and terrorist financing risks linked to virtual assets under the Anti-Money Laundering and Counter Terrorist Financing Ordinance (AMLO).

A licensing regime was implemented for virtual asset trading platforms (VATP) in June 2023, requiring operators to be licensed by the SFC and comply with AML/CTF provisions, limiting retail trading to major assets like Bitcoin and Ether. However, this regime does not cover over-the-counter (OTC) virtual asset trading, prompting new proposals for licensing these services under the Commissioner of Customs and Excise (CCE).

Licensing requirements for OTC services include stringent eligibility criteria and AML/CTF compliance, with enforcement powers granted to CCE. For stablecoins, a proposed regime focuses on fiat-referenced stablecoins to mitigate monetary and financial stability risks, requiring issuers to hold proper reserve assets and meet the HKMA's stringent conditions.

The proposed regimes emphasize investor protection by imposing severe penalties for non-compliance and plan transitional periods to integrate existing operators. Additionally, the HKMA introduces a sandbox initiative for testing stablecoin business models, with three participants already admitted. The overall aim is to foster safe virtual asset innovation and ensure regulatory alignment with global standards.

#VirtualAssets #HongKongRegulation #StablecoinIssuers

Timecodes:00:00 Introduction to Hong Kong's Virtual Asset Licensing Regime01:57 Background and Development of Hong Kong's Regulatory Framework03:31 Licensing Regime for Centralized and OTC Trading Platforms05:20 Eligibility and Compliance Requirements for OTC Licenses06:58 Operational and Trading Conditions for OTC Services08:42 OTC License Transition and Sanctions15:12 Regulatory Framework for Stablecoin Issuers18:30 Definition, Licensing, and Regulation of Stablecoins28:10 Risk Management and Compliance for FRS Issuers33:25 HKMA's Oversight and Licensing Conditions for FRS Issuers38:44 FRS Issuance, Market Operations, and Licensing Renewal45:44 International Cooperation and Flexible Regulatory Adjustments50:48 Sanctions, Transitional Arrangements, and Public Awareness54:24 Conclusion and Future Developments

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The webinar covers the insider dealing regime in Hong Kong under the Securities and Futures Ordinance (SFO). Following the SFC's consultation conclusions from August 2023, significant changes are on the horizon for the insider dealing framework.

Key Topics Covered:• Insider Dealing Definition: Understanding the circumstances that constitute insider dealing.• Types of Market Misconduct: Overview of offences under the SFO, including insider dealing, false trading, and price rigging.• Civil vs. Criminal Cases: Distinction between civil cases handled by the Market Misconduct Tribunal and criminal cases pursued in courts.• Recent Amendments: Discussion on upcoming changes to expand the scope of insider dealing regulations.• Case Studies: Analysis of landmark cases, including the implications of the Young Bik Fung case.• Defences Against Insider Dealing: Examination of various legal defences available under the SFO.

#InsiderDealing #HongKongSecurities #MarketMisconduct

Timecodes:00:00:00 Introduction to Hong Kong's Insider Dealing Regime00:01:47 Defining Insider Dealing00:06:26 Extended Scenarios of Insider Dealing00:09:44 Key Terms and Definitions00:12:46 Case Study - Section 300's Application00:15:58 Role of Connected Persons00:19:16 Inside Information00:22:19 General Knowledge and Price Effect00:25:28 Defenses against Insider Dealing Accusations00:31:15 Landmark Innocent Purpose Defense Case00:36:04 Civil and Criminal Proceedings00:37:39 SFC's Market Misconduct Tribunal Proceedings00:45:36 Sanctions and MMT Orders00:48:48 Appeals and Further Actions01:03:07 Case Examples and Legal Repercussions01:18:05 Expanding Territorial Scope of Insider Dealing01:27:25 Conclusion and Future Developments

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Julia Charlton presented a webinar discussing the Hong Kong Stock Exchange's proposed amendments to the Corporate Governance Code and related Listing Rules. The Exchange's proposals, published in a consultation paper in June 2024, aim to strengthen corporate governance practices and enhance board effectiveness and independence.

Key proposals include introducing a Lead INED role to improve communication with shareholders and implementing mandatory disclosure requirements for director training, emphasizing a comprehensive understanding of directors' responsibilities. The Exchange also proposes a hard cap of six concurrent directorships and a tenure limit of nine years for INEDs to ensure directors can devote sufficient time to their roles.

A Code Provision would require regular board performance reviews and the establishment of a board skills matrix to enhance board composition. To increase diversity, the Exchange recommends having at least one female director on the nomination committee and proposes a Listing Rule requiring listed companies to have a workforce diversity policy.

The amendments also focus on risk management and internal control, suggesting modifications to Mandatory Disclosure Requirements for more detailed reporting. The proposed changes are expected to take effect on January 1, 2025, with a transition period for specific amendments. The consultation period has ended, and the Exchange will review responses before publishing its conclusions.

#CorporateGovernance #HKEXReforms #BoardDiversity

Timecodes:00:00 Introduction to the Consultation01:40 Summary of Consultation Proposals03:24 Lead INED Proposal09:15 Director Training Requirements16:24 Performance Reviews and Skills Matrix21:20 Hard Cap on Directorships and Tenure32:29 Diversity Proposals38:05 Risk Management and Internal Controls44:08 Dividend Policy Disclosure49:43 Minor Amendments and Implementation Timeline

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On 13 August 2024, Julia Charlton presented a webinar on Listing Biotech Companies on the Hong Kong Stock Exchange.

This webinar covers the following topics:− Introduction to the HKEx regime for listing pre-revenue Biotech Companies− Chapter 18A suitability requirement under the Guide for New Listing Applicants− Other eligibility requirements for Chapter 18A listings− Requirements for the IPO relating to subscriptions− Listing document disclosure requirements− Continuing obligations of Chapter 18A issuers and requirements relating to changes to listed Biotech Companies

#BiotechIPO on #HKEX for #PreRevenueBiotech companies

Timecodes:00:00 Introduction to the Biotech Industry and Market Dynamics01:44 Hong Kong Stock Exchange's Biotech Listing Regime03:30 Performance and Trends in Biotech Listings05:25 International Biotech IPO Trends07:08 Chapter 18A of the Main Board Listing Rules08:54 Eligibility and Suitability for Listing13:57 Compliance with Core Product Requirements17:29 Third-Party Investment and Financial Requirements25:41 Enhanced Eligibility Requirements29:29 Public Float and Share Allocation Rules33:01 Disclosure Requirements for Listing Documents41:45 Financial Reporting and Regulatory Compliance50:20 Restrictions and Regulatory Oversight53:37 Delisting Provisions and Transition to Regular Listing

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On 6 August 2024, Julia Charlton presented a webinar on Listing SPACS on the Hong Kong Stock Exchange. This webinar covers the following topics:

• Overview and Introduction– What is a SPAC and what is a SPAC Promoter?– The SPAC regime– What is a De-SPAC Target?– What is a DE-SPAC Transaction and how does this relate to a Successor Company?– Pre-De-SPAC Transaction proposal– DE-SPAC Transaction proposal– Liquidation and de-listing of a SPAC if the De-SPAC Transaction timeframes are not met

• Listing Requirements of a SPAC– The key SPAC listing requirements under Chapter 18B– Which Listing Rules do not apply to SPACs?– Who is a “core connected person”?– Fundraising, escrow and trustee requirements– Typical timeline for a SPAC listing, filing and listing documents requirements

• What is a SPAC Promoter– Who is a SPAC Promoter?– What are the requirements for a SPAC Promoter?

• Application of the Takeovers Code, Liquidation and De-listing– Application of the Code prior to the De-SPAC Transaction and application to the De-SPAC Transaction– De-listing and liquidation condition (i.e. when a SPAC must de-list and liquidate)

#HongKongStockExchange #SPACListingRegime #JuliaCharlton

Timecodes:00:00 Julia Charlton's welcome speech01:49 Historical Context and Global SPAC Surge03:28 Hong Kong's SPAC Consultation Process05:19 Key Elements of the SPAC Promoter Role06:55 Listing Rules and Exceptions for SPACs08:48 Financial Management and IPO Requirements10:39 Investor Safeguards and Public Market Protection12:28 SPAC Promoter Requirements and Disclosure15:48 Material Changes in SPAC Promoters17:15 Board Requirements and Governance23:59 Promoter Shares and Warrants32:20 De-SPAC Transactions and Listing37:39 Shareholder Rights and Redemption Options43:54 Financial Arrangements and Working Capital45:17 Comparison with Singapore and Mainland China Regulations48:23 Application of the Takeovers Code50:00 Suspension and Delisting Procedures52:12 Conclusion and Q&A

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On 27 February 2023, Julia Charlton presented a podcast on the HKEX and SFC Disciplinary & Enforcement Actions between January and April 2022. This podcast provided a brief introduction and overview of the trends of the disciplinary and enforcement actions of the HKEX and the SFC in the first four months of 2022, and considered various enforcement cases of the HKEX and the SFC with an aim to give you an understanding and awareness on the enforcement areas and breaches which were focused by the Stock Exchange and the SFC during the said period.

The London-based Aquis Exchange PLC is a stock exchange group that operates Aquis Exchange -a pan European cash equities trading business, and Aquis Stock Exchange -a primary UK Stock Market composed of a Main Market and a two-tiered Growth Market.   It is authorized and regulated by the UK Financial Conduct Authority and France’s Autorité des Marchés Financiers. For this podcast we were joined by Alasdair Haynes and Philip Olm from Aquis Exchange PLC, Victoria Younghusband from Charles Russell Speechlys’, and Andrew Raca from VSA Capital.   

Podcast covers:  

• An overview of Aquis Exchange. 

• Listing Asian companies on Aquis.  

• Raising Capital in London.  

• Q&As covering topics including ESG listings and Qualifying Markets on Aquis.

Nasdaq Dubai and Charltons’ webinar on Listing Opportunities on Nasdaq Dubai.   Nasdaq Dubai is an international exchange located in the Dubai International Financial Centre with a large and diversified investor base from 212 nationalities. For this podcast, we were joined by Huimin Qiu who is responsible for Nasdaq Dubai’s collaboration with Chinese companies.  

Podcast covers:  

• An overview of Dubai’s capital market. 

• Outline of the listing opportunities on Nasdaq Dubai (Equity & Debt). 

• The options available and listing requirements on Nasdaq Dubai Growth Market. 

• The listing process and how to engage the listings team. 

• Give an overview on the preparation of a prospectus. 

• Q&A covering listing in general on Nasdaq Dubai’s main and growth markets and the investment trends in Dubai’s capital markets.

On 31 October 2022, Julia Charlton presented a podcast on 2022 Virtual Asset (Crypto) Service Providers & Dealers in Precious Metals & Stones: Hong Kong’s New Regulatory Regimes. This podcast provided an overview of the new Hong Kong licensing regime for virtual asset service providers and the new registration regime for dealers in precious metals and stones, which are both being introduced as amendments to the current Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615 of the laws of Hong Kong). 

These two new regulatory regimes are intended to address the issues identified by the Financial Action Task Force, specifically (i) the gap in the regulation of dealers in precious metals and stones in Hong Kong; and (ii) the growing risks in relation to virtual asset businesses and that virtual asset service providers should be subject to the same anti-money laundering and counter-terrorist financing obligations as financial institutions and be subject to a statutory licensing or registration regime.   

The Financial Services and Treasury Bureau issued a Legislative Council brief in June 2022 summarizing the proposed regulatory regimes and annexing the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022, which sets out certain key provisions of the new licensing regime. At present, the legislative amendments are expected to come into effect on 1 January 2023, excluding certain provisions relating to the virtual asset service providers licensing regime, which are expected to come into effect on 1 March 2023.

On 28 October 2022, Julia Charlton presented a podcast on SFC Bookbuilding Conduct Requirements – HKEX Listing Rules & Transitional Arrangements. This podcast provided an overview of the concerns leading to the Bookbuilding Conduct Requirements and an in-depth summary of the key features of the Bookbuilding Conduct Requirements.   The podcast also discussed the expected standards and obligations of OCs and CMIs as well as the amendments to the Listing Rules to reflect the Bookbuilding Conduct Requirements. Transitional arrangements for specific circumstances have been set out by the Hong Kong regulators, which have also been discussed in this podcast.

On 27 October 2022, Julia Charlton presented a podcast on Insider Dealing in Hong Kong – Overview & Update. This podcast provided an overview of the laws on insider dealing in Hong Kong and a summary of the enforcement action and measures against insider dealing, as well as defenses to insider dealing.   The webinar also discussed recent vital cases relating to insider dealing in Hong Kong and the proposed amendments to enforcement-related provisions of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong).

On 14 October 2022, Julia Charlton presented a podcast on Listing Pre-Revenue Biotech Companies on the HKEx. This webinar is to provide a detailed explanation on listing pre-revenue Biotech Companies.   In April 2018, the HKEx implemented a new listing regime aimed at attracting the listings of companies in high-growth emerging and innovative sectors, particularly from the PRC. This included the introduction of Chapter 18A of the Listing Rules which allows for, and stipulates the requirements for, listing biotech companies that cannot meet the financial eligibility tests of Listing Rule 8.05. Since the introduction of Chapter 18A, the HKEx has become the world’s second-largest and Asia’s largest funding hub for biotech companies.  In order to be considered eligible and suitable for listing under Chapter 18A, the company must meet the definition of a “Biotech Company” which is a company primarily engaged in the R&D, application and commercialization of Biotech products, processes or technologies.  An applicant must demonstrate that it meets the suitability criteria set out in HKEx Guidance Letter GL92-18 “Suitability for Listing of Biotech Companies” (Core Product developed beyond the concept stage, primary engagement in R&D for developing Core Product(s), the primary reason for listing, patents and prior meaningful third party investment).  In addition, Chapter 18A listing applicants must satisfy other eligibility requirements for listing (expected market capitalization, track record, working capital, ownership continuity, and public float). Chapter 18A applicants must have a minimum expected market capitalization of HK$1.5 billion at the time of listing.  Chapter 18A listings enjoy modified requirements relating to the subscription and allocation of IPO shares, including subscription of IPO shares by existing shareholders and Cornerstone Investors.  Biotech Companies are subject to enhanced disclosure under Biotech Company Listing Rule 8.04 and HKEx Guidance Letter GL107-20.  Biotech Companies listed under Chapter 18A of the Listing Rules are subject to additional and modified continuing obligations compared to an issuer with a standard listing. Chapter 18A issuers are identified through the stock marker “B” at the end of their stock name. Biotech Companies are subject to enhanced disclosure in their financial reports. Once a Biotech Company listed under Chapter 18A is able to satisfy one of the three financial eligibility tests under Listing Rule 8.05, the requirements of Listing Rules 18A.09 to 18A.11 cease to apply.

This podcast is to provide a detailed explanation on listing Mineral Companies.   Mineral and petroleum companies may list on the HKEx, subject to the additional listing eligibility requirements, disclosure standards and continuing obligations set out in Chapter 18 of the Listing Rules. Chapter 18 is a chapter specifically devoted to the listing of Mineral Companies.   Hong Kong’s Main Board has been a popular listing venue for Chinese mining and energy companies and has hosted the listings of some of China’s largest companies in these sectors, including those of China Shenhua Energy Company Limited, China Coal Energy Company Limited and Zijin Mining Group Co. Ltd.  Mineral Companies seeking to list on the HKEx need to satisfy the basic eligibility requirements set out in Chapter 8 of the Listing Rules, as well as additional eligibility criteria for Mineral Companies set out in Chapter 18.  The particular advantage of listing as a Mineral Company is the possibility of obtaining a waiver from the requirement to meet the financial tests for listing set out in Listing Rule 8.05. In order to be eligible for a waiver under Listing Rule 18.04, a listing applicant must establish that it fulfills various conditions.  In addition to the listing document disclosure requirements that generally apply to issuers, Mineral Companies must satisfy additional listing document disclosure requirements. They must include in their listing document a Competent Person’s Report – a public report on their resources and/or reserves prepared by an independent expert, a Competent Person.  Chapter 18 also sets out the disclosure standards applicable to Mineral Companies, both new applicants and listed issuers. Information disclosed by a Mineral Company on mineral resources, reserves and exploration results, as well as petroleum resources and reserves must be prepared in accordance with specified codes.  Listed Mineral Companies are subject to additional ongoing disclosure requirements. Non-Mineral Company listed issuers that propose to acquire assets which are solely or mainly mineral or petroleum assets as part of a Relevant Notifiable Transaction are subject to requirements under Chapter 18.

On 10 October 2022, Julia Charlton presented a podcast on Hong Kong’s Disclosure of Interests Regime. This podcast is to provide a detailed explanation of the disclosure of interests regime. Part XV (Disclosure of Interests) of the SFO contains two regimes: one for substantial shareholders, and one for directors and chief executives.  For the purposes of Part XV, substantial shareholders are individuals and corporations who are “interested” in 5% or more of any class of voting shares in a listed company. Substantial shareholders must disclose “interests” as well as “short positions” (of 1% or more) in relation to the voting shares of the listed company.  Directors and chief executives must disclose all interests and short positions in any shares in the listed company. There are no percentage thresholds, and there is no requirement that the shares be voting shares. They must also disclose interests in debentures of the listed company, as well as interests and short positions in shares of and interests in debentures of “associated corporations” of the listed company.  The disclosure must also be made in relation to shares in which a person is “deemed” to be interested, such as the interests of corporations that the person controls.  There are various exemptions where filings are not required. For example, wholly-owned subsidiaries are excluded from making disclosures in certain circumstances if the holding company has complied with its duty of disclosure.  Disclosure filings must be made electronically to the HKEx through the Disclosure of Interests System (the “DION System”) on the HKEx’s website. Generally, filings must be made within three “business days” after the day on which the “relevant event” occurs (or on which the filer becomes aware of the relevant event occurring). “Initial” disclosures must generally be made within 10 business days after the day on which the relevant event occurs (or on which the filer becomes aware of the notifiable interest or short position).

UAE is one of the fastest-growing cryptocurrency markets in the world. The regulatory regimes in Dubai, Abu Dhabi and the wider UAE provide several options for crypto firms to explore and positions the UAE as a regional and global destination for the virtual assets sector.  The podcast focuses on UAE’s current legal framework governing crypto activities as well as the procedure and requirements of obtaining a crypto license.  Speakers: Jehanzeb Awan, Founding Partner & CEO of j. awan & partners

The podcast concludes the discussion of Hong Kong’s domestic regulation of cryptocurrencies and related activities. It covers the regulatory status of different types of virtual assets, the SFC’s existing framework for licensing crypto exchanges under the Securities and Futures Ordinance, the new VASP licensing regime to be introduced under amendments to the anti-money laundering legislation and the HKMA’s proposals for regulating certain types of stablecoins.

This podcast considers the progress made in implementing FATF’s revised recommendations (including Hong Kong’s progress). It then focuses on Hong Kong regulation of cryptocurrencies, looking firstly at the scope of the SFC’s regulatory remit and then at the SFC’s requirements for managers and distributors of crypto funds and at the latest HKMA/SFC requirements for intermediaries conducting virtual asset-related activities.

The podcast provides a general introduction to crypto regulation looking at key developments in global cryptocurrency markets, before turning to FATF’s revised recommendations requiring the licensing of virtual asset service providers (VASPs) which has resulted in new licensing regimes in member jurisdictions (including Hong Kong). The podcast concludes with a look at some of the latest proposals for stablecoin regulation.

Julia Charlton presents a summary on Hong Kong Stock Exchange HKEX’s new listing regime for overseas issuers. This podcast provides a detailed explanation of the new listing regime for overseas companies. The revised Hong Kong Stock Exchange HKEX Listing Rules simplified and streamlined the listing regime for Overseas Issuers. The new regime created opportunities for China Chinese “homecoming” stock secondary listings on the Hong Kong Stock Exchange HKEX. China Chinese businesses with primary listings in New York or London are now able to secondary list on the Hong Kong Stock Exchange or HKEX Main Board. The amendments follow the publication of the Hong Kong Stock Exchange HKEX Consultation Conclusions on Listing Regime for Overseas Issuers which adopted the proposals set out in Hong Kong Stock Exchange HKEX Consultation Paper on Listing Regime for Overseas Issuers.

Julia Charlton presents a podcast on Hong Kong Stock Exchange or HKEX’s proposed Listing Rule changes for listed company share schemes. The podcast explained Hong Kong Stock Exchange or HKEX Listing Rule amendments with reference to the existing regime and the position in other jurisdictions. HKEX issued Hong Kong Stock Exchange or HKEX Consultation Paper on Proposed Amendments to Listing Rules Relating to Share Schemes of Listed Issuers on 29 October 2021 and the consultation period ended on 31 December 2021.

China’s economic performance for the year 2021 was marked with strong economic growth of 8.1%, as well as several new initiatives and policies aimed to bring about dynamic changes in the country’s economic outlook for the new decade. Listen to our podcast on regulatory background to the Chinese economy with Julia Charlton as she provides an incisive and full overview of all the news and key regulatory trends in the Chinese economy to look out for!

This podcast starts with a background to security tokens and comparison between security token offerings (STOs) and initial coin offerings (ICOs). A security token is a digital or virtual asset issued on distributed ledger technology (DLT) in the form of a security. Examples include the tokenised shares issued by NYSE or NASDAQ-listed Tesla (TSLA), Coinbase (COIN), Gamestop (GME) and Apple (AAPL) which can be traded on FTX and Binance. Securities tokens can also represent other traditional forms of investment products, as well as “utility” or “network” token (e.g. Munchee token).