Capital Markets Quarterly Update (October to December 2013)

This quarterly update (October to December 2013) highlights recent developments in Hong Kong capital markets practices:

Topical Issue

• Listing of overseas issuers - country guides published
• Guidance - matters which might affect suitability for listing

Procedures and Waivers

• Waiver required – profit forecast - a period not being a six- or 12-month period (or quarter period for GEM listing applicants)

Disclosure Requirements and Guidance

• Simplification series – the "Summary and Highlights" section in listing documents
• Simplification series – White and Yellow Application Forms (AFs) – the "How to Apply for Hong Kong Offer Shares" section in a prospectus (HTA)
• Disclosure in prospectus – material adverse changes in financial, operational and/or trading position after the trading record period

Listing Suitability and Other Listing Decisions

• Engaging in non-compliant financing arrangements – listing application delayed for 12 months – listing applicant was required to prove that it could sustain financially and operate independently
• Further guidelines – VIE structures would not result in unsuitability for listing
• Having businesses/projects in countries on which sanctions are imposed - would not result in unsuitability for listing with appropriate disclosures
• Guidance - spin-off and reverse takeover applications