Mandating Electronic Dissemination of Corporate Communications to Securities Holders by Listed Companies
Under the new regulations, HKEX will mandate that listed issuers must disseminate corporate communications to their securities holders electronically, to the extent permitted by applicable laws, regulations, and their constitutional documents. This can be achieved by:
- Sending or making corporate communication available to the holders using electronic means; or
- Making corporate communication accessible on their websites and the HKEX website.
Listed issuers will only send corporate communications in hard copy form to a securities holder upon request, and they will need to disclose the relevant arrangements for such requests on their websites. If listed issuers intend to implement new arrangements for the dissemination of corporate communications, such as changing the mode of dissemination or the consent mechanism, they should send a one-time notification to their securities holders individually, either in hard copy or electronically. This notification should inform them of the new arrangements before implementation and solicit their email addresses.
Implied Consent Provisions on Dissemination of Corporate Communication to Securities Holders by Listed Companies
HKEX will remove the Listing Rules provisions regarding the arrangements for consent mechanisms for electronic dissemination of corporate communications. Listed issuers may rely on implied consent, to the extent permitted by their applicable laws and regulations, instead of explicit consent from securities holders. Implied consent is generally permitted (or not specifically restricted) in the Cayman Islands, Bermuda, or the PRC.
However, Hong Kong-incorporated listed issuers should obtain express or deemed consent under Hong Kong laws and disseminate corporate communications in hard copy form if such consent has not been given. HKEX will work with relevant parties to consider the issue of implied consent for the electronic dissemination of corporate communications by Hong Kong-incorporated listed issuers.
Actionable Corporate Communications
Actionable Corporate Communications, which seek instructions from securities holders on exercising their rights or making elections, must be sent individually and in electronic form if functional electronic contact details have been provided. If functional electronic contact details are not available, an Actionable Corporate Communication must be sent in hard copy form, along with a request for the securities holder's electronic contact details for future electronic dissemination.
Listed issuers are required to amend their constitutional documents only if they contain provisions that restrict the electronic dissemination of corporate communications. The timing for amending constitutional documents will be:
- For issuers not prevented by applicable laws and regulations, they have until their first annual general meeting after December 31, 2023 to make changes; and
- For issuers unable to comply due to restrictions under applicable laws and regulations, they have until the first annual general meeting following the date on which the relevant restrictions are removed from applicable laws and regulations to make amendments.
Before the new Listing Rules take effect on December 31, 2023, listed issuers are advised to:
- Review their constitutional documents to ensure they do not restrict compliance with the new requirements for the electronic dissemination of corporate information; and
- Take necessary actions to facilitate compliance with the new requirements for the dissemination of corporate communications.
For more information, please contact us at TricorInside@hk.tricorglobal.com.