On 28 October 2011 the Hong Kong Stock Exchange published consultation conclusions on its Review of the Corporate Governance Code and Associated Listing Rules, which underwent public consultation in early 2011.
Based on these consultation conclusions, the exchange will amend the Rules Governing the Listing of Securities on the Exchange (the MBLR), the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Exchange (the GEMLR, which together with the MBLR make up the Listing Rules) and the Code on Corporate Governance Practices as set out in Appendix 14 to the MBLR and Appendix 15 to the GEMLR.
A set of frequently asked questions on the amendments to the Listing Rules was also published by the exchange on 28 October 2011.
Under the amendments, a small number of Code Provisions (CPs) has been promoted to Listing Rules. A majority of the amendments upgrade Recommended Best Practices (RBPs) to CPs. If issuers decide not to adopt a CP, they must explain the reasons for the decision in their corporate governance reports (CG Reports). For RBPs, issuers are encouraged, but not required, to state whether they have adopted them.
Set out below in summary are the major amendments and their respective effective date. An issuer must state in its first financial report covering a period after 1 April 2012 whether it has complied with the new CPs during that period. Issuers must adopt the revised code by 1 April 2012. For a complete list of all amendments, please refer to the consultation conclusions.
Except for the amendments otherwise specified, all other Listing Rules amendments took effect on 1 January, 2012 and all other code amendments took effect on 1 April 2012.
Business Law Digest is compiled with the assistance of Baker & McKenzie. Readers should not act on this information without seeking professional legal advice. Readers can contact Zhang Danian at Baker & McKenzie in Shanghai at firstname.lastname@example.org