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Derivative Warrants Listing Rule Changes

On November 28, 2001, the Listing Rule Changes for derivative warrants were outlined by Karen Lee, EVP of Listing, Regulation, and Risk Management. Key updates include the removal of the 85% placement requirement and the minimum placee count. Issuers must now appoint a Liquidity Provider to ensure warrant liquidity, with specifics detailed in the listing document. Market capitalization requirements have been adjusted, allowing for lower initial capital and higher maximum limits. Furthermore, issuers can now conduct multiple further issues of warrants. Simplified disclosure rules for underlying companies are also introduced.

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Derivative Warrants Listing Rule Changes

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  1. Derivative Warrants Listing Rule Changes Karen Lee EVP, Listing, Regulation and Risk Management 28 November 2001

  2. Placing Guidelines • Requirement to place 85% of a warrant issue on launch no longer applies • Requirement to place to a minimum of 100 or 50 placees (depending on the value of warrants subscribed for by a placee) no longer applies • No limit specified for the percentage of an issue to be placed or limit on the percentage of an issue that may be retained on launch

  3. Liquidity Requirement • Issuer must appoint a Liquidity Provider to provide liquidity for warrants • Liquidity provider must be an Exchange Participant but need not be a member of Issuer’s group • Liquidity Provider must be identified in the listing document for a warrant issue • Liquidity may be provided by Quote Request or Continuous Quotes - specify method in listing document • In general provide liquidity five minutes after market opens until it closes

  4. Warrant Issues • Minimum market capitalisation of warrant issue on launch lowered from HK$50 million to HK$10 million • Maximum market capitalisation on launch set at HK$100 million • Limit over the maximum number of a company’s shares that warrants can be issued over remains unchanged at the lower of • 30% of public float or • 20% of issued share capital

  5. Further Issues • More than one Further Issue per warrant issue will be permitted • Limit on the market capitalisation for Further Issues changed from an aggregate limit of HK$50 million to a limit of HK$100 million for each Further Issue • Further Issue permitted at any time prior to maturity of derivative warrant • Further Issue permitted where issuer holds up to 20% of existing issue

  6. Issuer’s Dealings • Dealings in warrants by the issuer and members of its group in warrants that the issuer has listed on the Exchange reported to the Exchange each day • Dealings in warrants by the issuer and members of its group in between the launch date and the day of listing must be reported to the Exchange on the day of listing • The Exchange will release the above details on teletext and on the web site

  7. Listing Document • Simplifications • No requirement to provide detailed information on the underlying company where it is listed on the Exchange • No requirement to disclose details of other outstanding warrant issues • No requirement to disclose details of dealings in the shares of a company underlying a warrant issue.

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