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Hong Kong – Regulatory Watch.

13 May 2012

 

Waiver of SFC Licensing Fees for Two years
 
Starting April 1, 2012, the payment of annual licensing fees will be waived for a two-year period. The fee waiver will apply to all licensed corporations, registered institutions, responsible officers and representatives. The fees payable in connection with new license applications and transfers will not be affected. 
 
Trust Law Reform 
 
In March 2012, the government launched a public consultation on the draft legislation on trust law reform to facilitate trust administration and attract more trust businesses. As you remember, we had Hong Kong’s first listed business trust, HKT Trust, in November 2011. 
 
The consultation document sets out draft provisions to amend the Trustee Ordinance (Cap. 29) and the Perpetuities and Accumulations Ordinance (Cap. 257), where were enacted in 1934 and 1970, respectively, and have not been substantially reviewed and amended. 
 
The reform will cover clarification of trustees’ duties and powers, better 
protection of beneficiaries’ interests, and modernization of trust law. The major 
proposals include:
 
(a)  Clarification of trustees’ duties and powers
 
i. imposing a statutory duty of care on trustees;
ii. improving and clarifying the law relating to short-term delegation by a single trustee;
iii. providing trustees with a general power of appointing agents, nominees and custodians;
iv. giving trustees wider powers to insure any trust property against risks of loss by any event;
v. allowing professional trustees to receive remuneration for rendering services to charitable and noncharitable trusts;
 
(b) Better protection of beneficiaries’ interests
 
i. regulating the exemption clauses of professional trustees who receive remuneration for their services;
ii. providing a mechanism for beneficiaries to remove a trustee on fulfilling certain conditions;
 
(c) Modernization of trust law
 
i. clarifying that a trust is not invalid by reason only of a limited reservation of the settlor’s power;
ii. abolishing the rule against perpetuities with respect to new trusts; and
iii. abolishing the rule against excessive accumulations of income with respect to new non-charitable trusts.
 
Please follow the link to the consultation paper:
 
Revised Publication Windows for Issuers’ Announcements through the Exchange’s Website 
Since March 5, 2012, the trading sessions of the Exchange’s securities market run from 9:30 a.m. to 12:00 noon and then from 1:00 p.m. (instead of 1:30 p.m.) until 4:00 p.m. As a result of the extension of trading hours, the publication windows for listed issuers to make Listing Rules-related announcements through the Exchange’s website were revised accordingly. 
(See chart below)
 
Proposed Abolition of Capital Duty
 
In March 2012, the government gazetted the Companies Ordinance (Amendment of Eighth Schedule) Order 2012 to abolish capital duty currently levied on Hong Kong companies that have a share capital under the Companies Ordinance. 
 
The amendments will be applicable to companies which lodge the relevant documents about incorporation, increases in nominal share capital or the issuing of shares at a premium with the Companies Registry on or after June 1, 2012, and are subject to negative vetting. 
 
Takeovers Code Amendments
 
In March 2012, the SFC announced the following amendments to the Takeovers Codes with immediate effect:
 
• Property valuation requirements now only apply to offers when the offeror is an interested party. 
• It is the responsibility of the financial adviser, placing agent and acquirer of the voting rights to confirm the independence of placees in placing and top-up transactions.
• The prescribed period for payment on acceptance of an offer is seven 
business days (no longer 10 days). 
 
For a copy of the consultation conclusions, please follow the link:
 
Repeal of Listing Rule 8.21b
 
Listing Rule 8.21B has been repealed with effect from February 1, 2012. Inclusion of a profit forecast/estimate in an IPO prospectus will no longer be a prerequisite for the inclusion of profit forecasts in predeal research reports
 
However, please note that the existing practice by the Exchange of requiring a profit forecast memorandum to be filed continues regardless of whether a profit forecast is contained in the prospectus (Listing Rule 9.11(10)(b)). 
 
Revised Publication Windows for Issuers’ Announcements through the Exchange’s Website
 
Morning publication window 
6:00 a.m. and 8:30 a.m. on normal 
business days
Lunch break publication window 
12:00 noon and 12:30 p.m. 
(instead of 1 p.m.)
Evening publication window 4:15 p.m. and 11:00 p.m.
For a non-business day preceding a 
business day
6:00 p.m. and 8:00 p.m.

 
 

For further information, please contact:

 

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