Hong Kong Stock Exchange Proposes to Introduce a Treasury Share Regime

The Hong Kong Stock Exchange (the “Exchange”) is running a two-month consultation on the relaxation of the requirement on listed issuers to cancel repurchased shares and the introduction of a new framework in the Listing Rules to allow issuers to hold repurchased shares in treasury or deal with them in a specified manner.

The consultation is open for comments until 27 December 2023. 

This consultation follows shortly after the policy address of the Chief Executive and is in addition to the new guidance letter issued by the Exchange allowing waivers for listed issuers to continue “irrevocable non-discretionary share buy-back programmes” throughout restricted periods, which we have highlighted in our earlier client alert. These recent proposals are indicative of the Hong Kong regulators’ willingness to provide issuers with further flexibility in managing their own capital and keep pace with other developed international markets.