HONG KONG Law and Practice Contributed by: Vincent Sum and Sylvia Leung, Mayer Brown
Companies Ordinance Under the Companies Ordinance, if the issuer is a Hong Kong company or a registered non-Hong Kong company, it is required to file a Form on Return of Allotment of Debenture or Debenture Stock within one month of the issue of the debt Under the CWUMPO, an offer of debt securi - ties to the retail public in Hong Kong – unless exempt – must be authorised by the Securities and Futures Commission (SFC) and also issued with a prospectus that complies with the man - datory requirements set forth in the CWUMPO. For instance, the prospectus must specify the general nature of the business of the issuer, the investors’ rights in respect of interest, security and redemption, and other information that is sufficient to enable a reasonable person to form a valid and justifiable opinion on investing in such debt securities. Exemptions Nevertheless, the CWUMPO and the SFO pro - vide a number of exemptions in respect of the above requirements. The following two exemp - tions are often sought by the parties in a secu - ritisation. • Professional investors’ exemption – an securities. CWUMPO offer made to professional investors can be exempted from the registration requirement. “Professional investor” is defined in Schedule 1 to the SFO and the Securities and Futures (Professional Investor) Rules (Cap. 571D), and includes investors who are, among others, authorised institutions (eg, banks), authorised insurers, collective investment schemes and individuals with a portfolio of not less than HKD8 million.
• Private placement exemption – an offer made to not more than 50 persons and contain - ing a warning statement as specified in the Eighteenth Schedule to the CWUMPO can be exempted from the registration requirement. The warning statement generally stipulates that the contents of the prospectus have not been reviewed by any authority in Hong Kong, and that the investors should exercise caution and obtain professional advice in relation to the offer of debt securities. Listing Rules Separately, with effect from 1 November 2020, the Listing Rules on the listing of debt securi - ties offered to professional investors of the Hong Kong Stock Exchange set out new disclosure and publication requirements applicable to new issuances and new continuing obligations (appli - cable to both new and existing issuances). For example, issuers (and guarantors, where applicable) are required to: • publish listing documents (eg, offering circular and pricing supplement) (in English or Chi - nese) on the website of the Stock Exchange on the date of listing; • state explicitly on the front cover of a listing document the intended investor market in Hong Kong (ie, professional investors only and not appropriate as an investment for retail investors in Hong Kong); • announce any information that may have a material effect on their ability to meet their obligations under the listed debt securities; • disclose a default (including any cross-default of the listed debt securities triggered by a default on other obligations of the issuer or the guarantor), insolvency, winding-up and similar applications or proceedings, or the appointment of manager or receiver; and
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