HONG KONG: SFC response to query on Hong Kong substantial acquisitions in HKEx

Monday April 7 2014

The Hong Kong Securities and Futures Commission has responded to a query on prior approval of Hong Kong substantial acquisitions in Hong Kong Exchanges and Clearing (HKEx) as below:

“Regarding your enquiry about seeking authorization to become a minority controller as stipulated under section 61 of the Securities and Futures Ordinance, please note that the person in seeking authorization should submit an application letter to the Securities and Futures Commission. Generally, we would take into account the totality of the facts in considering whether to grant approval in a particular case or not. Our focus would be on understanding the full nature of the person’s business and its operations, as well as the circumstances leading to the person’s becoming a minority controller.

Regarding the general question on whether holding derivative is considered as having entitlement to voting power, one of the key considerations is whether the person has unconditional rights to the exercise of any voting powers derived from exercising the derivatives. As such, we may need to know more about the terms and details of the derivatives concerned.

To apply for an authorization, please submit an application in writing to the Supervision of Markets Division by mail (hard copy) and email (soft copy) at market@sfc.hk.”