Compliance guide for companies listed on the Hong Kong Stock Exchange 2009
Compliance Guide Compliance Guide Corporate governance provides the institutional and policy framework for companies. The integrity of companies, financial institutions and markets is central to the health of the local and global economies and their stability. Market based investment is of critical importance to most economies and that process is based upon sound corporate governance. Listed companies need to ensure that their internal controls and know-how are adequate so as to minimise the risk of the listed company or its directors and other officers facing public censure or civil or criminal liability. The Compliance Guide is designed to assist the directors, company secretaries, compliance advisers, in-house counsel and external advisers of Hong Kong Main Board listed companies. The Guide highlights the key obligations for Hong Kong listed companies under the Hong Kong Stock Exchange Listing Rules, the Hong Kong Companies Ordinance, the Takeovers Code and the Share Repurchase Code. It does not attempt to give detailed guidance on all of the compliance obligations, nor detail all the exemptions that exist. Rather the objective is to highlight the major obligations and the necessary steps to meet these requirements in a way which is easy to read and understand. References in this Guide to the Companies Ordinance only relate to companies incorporated in Hong Kong. The Guide does not consider regulatory compliance issues imposed by other jurisdictions. However, generally speaking the provisions imposed by the company legislation in Bermuda and the Cayman Islands are not more onerous than those imposed by the Hong Kong Companies Ordinance. This Guide is a summary only of the relevant legal and regulatory obligations as at 1 April 2009 and should not be relied upon as legal advice. This Guide may be updated from time to time. However, we are under no obligation to do so or to forward any revised Guide to previous recipients. If you have any questions, or if you would like us to prepare a revised version of this Guide modified to incorporate your company s own internal controls and procedures, please feel free to contact any of the people named on the following page. We trust that you will find the Compliance Guide a useful reference tool and an aid to good corporate governance. Ashley Alder Head of Asia
Compliance Guide is a leading international legal practice with over 1,300 lawyers based in its offices in Europe and Asia. We are committed to providing high quality and innovative legal services to corporations, governments, financial institutions and all types of commercial organisations. The firm advises on corporate, dispute resolution, banking and finance, energy and projects, and offers a full range of specialist services including investment funds, regulatory, construction, insurance, tax and IP/IT. Hong Kong office: Shanghai office: Beijing office: 23rd Floor 38th Floor, Bund Center 28/F Office Tower Gloucester Tower 222 Yan An Road East Beijing Yintai Centre 15 Queen s Road Central Shanghai 200002 2 Jianguomenwai Avenue Hong Kong PRC Beijing PRC 100022 Contacts Corporate Partners Hong Kong Ashley Alder T +852 2101 4001 ashley.alder@herbertsmith.com Matt Emsley T +852 2101 4101 matt.emsley@herbertsmith.com John Moore T +852 2101 4106 john.moore@herbertsmith.com Kevin Roy T +852 2101 4102 kevin.roy@herbertsmith.com Carolyn Sng T +852 2101 4155 carolyn.sng@herbertsmith.com Tommy Tong T +852 2101 4151 tommy.tong@herbertsmith.com Andrew Tortoishell T +852 2101 4012 andrew.tortoishell@herbertsmith.com Corporate Partners Shanghai and Beijing Tom Chau T +852 2101 4104 tom.chau@herbertsmith.com Michael Fosh T +86 10 6535 5101 michael.fosh@herbertsmith.com Gary Lock T +86 10 6535 5088 gary.lock@herbertsmith.com Simon Meng T +86 21 2322 2118 simon.meng@herbertsmith.com Practice Support Lawyers Hong Kong, Shanghai and Beijing Nicky Cardno T +852 2101 4137 nicky.cardno@herbertsmith.com Owen Cox T +86 21 2322 2151 owen.cox@herbertsmith.com Business Development Asia Tim Wright T +852 2101 4665 tim.wright@herbertsmith.com Defined Terms CO Corporate Governance Code Exchange INEDs issuer LR or Listing Rules SFC SFO Share Repurchase Code TC, Code or Takeovers Code 2009 Companies Ordinance (Cap. 32, Laws of Hong Kong) the LR s Code on Corporate Governance Practices The Stock Exchange of Hong Kong Limited Independent Non-Executive Directors a company listed on the Main Board of the Exchange Main Board Listing Rules of the Exchange Securities and Futures Commission of Hong Kong Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) SFC Code on Share Repurchases SFC Code on Takeovers and Mergers
Compliance Guide Contents Announcements, circulars and disclosures 1. Announcements when required 2. Circulars when required 3. Disclosure of price sensitive information 4. Litigation claims Notifiable, connected and other transactions 5. Notifiable transactions 6. Connected transactions 7. Advances and financial assistance to third parties 8. Loan agreements 9. Takeover offers Accounts and auditors 10. Annual and interim accounts 11. Auditor 12. Financial year end Company matters 13. Common seal 14. Company name 15. Dividends 16. Memorandum and Articles of 17. Registered office 18. Registers to be maintained 19. Withdrawal of listing Corporate governance 20. Corporate Governance Code and Report 21. Audit, remuneration and nomination committees 22. Directors common law and fiduciary duties 23. Recommended guidelines and procedures Directors and officers 24. Alternate directors 25. Appointment and resignation 26. Board composition and INEDs 27. Board meetings 28. Company secretary 29. Compliance adviser 30. Exchange authorised representatives 31. Loans to directors 32. Service contracts 33. Share dealings and Model Code Shares 34. Book closure 35. Bonus issues 36. Convertible securities, warrants and options 37. Disclosure of share interests 38. Insider dealing 39. Issue of shares 40. Option schemes 41. Placings 42. Public float 43. Repurchases 44. Rights issues and open offers 45. Suspension and resumption of trading 46. Transfers and registration Shareholders and meetings 47. Pledging shares by controlling shareholder 48. Shareholder meetings and communications PRC issuers 49. Modified rules for PRC issuers 1
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