HONG KONG Law and Practice Contributed by: Vincent Sum and Sylvia Leung, Mayer Brown
underlying asset pool, or to protect against the risk of default by the asset issuer. • Commodity derivatives – where commodity- based assets are involved in securitisa - tion, commodity derivatives like futures and options can be used to hedge against the The requirement and form of offering documents in Hong Kong securitisation transactions are dic - tated by whether the offering is public or private, the investor base (public or professional inves - tors), whether specific exemptions apply, and whether the securities will be listed on the Hong Kong Stock Exchange. volatility in commodity prices. 3.10 Offering Memoranda Where a prospectus is not explicitly required under the law (eg, in certain private issuances or issuances to “professional investors” only), an offering circular or offering memorandum is normally produced for disclosure to investors. Contents typically follow those in public trans - actions, and include, without limitation, the fol - lowing: • details about the type(s) of securities issued, whether bonds, notes, or other forms of asset-backed securities; • if applicable, brief details about any related prior tranches issued and their priority or pari- passu status in relation to the new tranche to be issued; • information on interest rates, payment sched - ules, maturity dates, any early or compulsory redemption conditions; • identification and explanation of the risk fac - tors associated with the securities and the underlying assets; • if applicable, details about credit enhance - ment measures and the credit ratings of
the securities, and listing information of the securities; • information on compliance with relevant legal and regulatory requirements, including disclosures under securities law and compli - ance with listing rules of the relevant stock exchanges(s) if the securities will be listed upon issuance; and • description of the underlying assets back - ing the securities, including their origin, type, valuation, and cash flow patterns and any material risk factors that investors should consider when deciding whether or not to invest in the securities. Refer to 4.2 General Disclosure Laws or Regu- lations for specific regulations that apply.
4. Laws and Regulations Specifically Relating to Securitisation 4.1 Specific Disclosure Laws or Regulations
There are no disclosure requirements specifi - cally relating to securitisation transactions under Hong Kong law. However, refer to 4.2 General Disclosure Laws or Regulations for certain gen - eral disclosure rules that apply to securitisation. 4.2 General Disclosure Laws or Regulations Where a securitisation involves the issuance of debt securities, such issuance may be subject to the disclosure and registration regimes under the Companies Ordinance, the Companies (Wind - ing Up and Miscellaneous Provisions) Ordinance (CWUMPO) and the Securities and Futures Ordi - nance (Cap. 571) (SFO), as applicable.
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