Syren Johnstone & Frederick Long
Published in January 2020
Introduction: With limited exceptions, companies seeking a listing for their equity shares in Hong Kong will normally also engage in a public offering that invokes the prospectus provisions of the Companies (Winding-up and Miscellaneous Provisions) Ordinance (Cap. 32) (CWUMPO). In addition to the requirements of the CWUMPO, it will be necessary to comply with the non-statutory listing rules of The Stock Exchange of Hong Kong Limited (SEHK), which require a listing document to be produced - this will be combined with the CWUMPO-compliant prospectus into a single document (together, the prospectus). While the prospectus is typically produced in a physical print run of around three to five thousand copies that are made available at banks and other financial services providers, Alibaba’s recent secondary listing (26 November 2019) and public offer was achieved on a paperless basis – the prospectus and the application forms were only made available electronically.
As a wholly paperless public offering is a first for the Hong Kong market, this article explores the underlying legal and regulatory requirements and considers whether Hong Kong must remain wedded to paper when competitor markets are not. It queries the necessity of the waivers obtained by Alibaba to go paperless and suggests that regulatory clarity - and regulator proaction - is required to facilitate Hong Kong more clearly moving forward to a paperless system that reflects the modernisation of public offering and placement processes. This has become essential in view of developments internationally, commercial and environmental considerations, and local realities... Click here to read the full text.