Hong Kong stock exchange moves to ease spin-offs and shareholder approval rules

Proposals aim to streamline corporate actions and align Hong Kong more closely with rival markets, HKEX says

The 10-week consultation, which runs until November 30, proposes removing the profit test currently used to determine whether a transaction requires disclosure or shareholder approval. Companies would instead use market capitalisation or net asset value, whichever is higher.

The proposal would also reduce the number of transactions requiring shareholder approval. Deals equivalent to between 25 per cent and 50 per cent of a company’s size would require disclosure only, rather than shareholder approval under current rules.

According to the consultation paper, regulators in the UK and Singapore had already relaxed similar requirements, increasing pressure on Hong Kong to remain competitive.