Whole Section

  • Part II General Requirements for an Issue of Securities

    • 803

      An issuer must not issue securities to transfer a controlling interest without prior approval of shareholders in general meeting.

    • 803A

      (1) An issuer with a dual class share structure must not issue multiple voting shares except in the event of a rights issue, bonus issue, scrip dividend scheme or consolidation or subdivision of shares, in each case in conjunction with the issuance of ordinary voting shares.
      (2) Any issuance of multiple voting shares by an issuer with a dual class share structure must be approved by a special resolution of the shareholders in a general meeting.
      (3) The issuer must ensure that, in undertaking any corporate action (including as set out in Rule 803A(1)), the proportion of the total voting rights of the multiple voting shares as a class against those of the ordinary voting shares after the corporate action will not increase above that proportion existing prior to the corporate action.

      Added on 26 June 201826 June 2018.

    • 804

      Except in the case of an issue made on a pro rata basis to shareholders or a scheme referred to in Part VIII of this Chapter, no director of an issuer, or associate of the director, may participate directly or indirectly in an issue of equity securities or convertible securities unless shareholders in general meeting have approved the specific allotment. Such directors and associates must abstain from exercising any voting rights on the matter. The notice of meeting must state:—

      (1) the number of securities to be allotted to each director and associate;
      (2) the precise terms of the issue; and
      (3) that such directors and associates will abstain from exercising any voting rights on the resolution.
    • 805

      Except as provided in Rule 806, an issuer must obtain the prior approval of shareholders in general meeting for the following:—

      (1) The issue of shares or convertible securities or the grant of options carrying rights to subscribe for shares of the issuer; or
      (2) If a principal subsidiary of an issuer issues shares or convertible securities or options that will or may result in:—
      (a) the principal subsidiary ceasing to be a subsidiary of the issuer; or
      (b) a percentage reduction of 20% or more of the issuer's equity interest in the principal subsidiary. For example, if the issuer has a 70% interest in a principal subsidiary, shareholders' approval will be required for any issue of shares in the principal subsidiary reducing the issuer's equity interest to 56%.
    • General Mandate

      • 806

        (1) Approval by an issuer's shareholders under Rule 805(1) is not required if shareholders had, by ordinary resolution in a general meeting, given a general mandate to the directors of the issuer, either unconditionally or on such conditions to issue:—
        (a) shares; or
        (b) convertible securities; or
        (c) additional convertible securities issued pursuant to Rule 829, notwithstanding that the general mandate may have ceased to be in force at the time the securities are issued, provided that the adjustment does not give the holder a benefit that a shareholder does not receive; or
        (d) shares arising from the conversion of the securities in (b) and (c), notwithstanding that the general mandate may have ceased to be in force at the time the shares are to be issued.
        (2) A general mandate must limit the aggregate number of shares and convertible securities that may be issued. The limit must be not more than 50% of the total number of issued shares excluding treasury shares and subsidiary holdings in each class, of which the aggregate number of shares and convertible securities issued other than on a pro rata basis to existing shareholders must be not more than 20% of the total number of issued shares excluding treasury shares and subsidiary holdings in each class. Unless prior shareholder approval is required under the Listing Rules, an issue of treasury shares will not require further shareholder approval, and will not be included in the aforementioned limits.
        (3) For the purpose of Rule 806(2), the total number of issued shares excluding treasury shares and subsidiary holdings is based on the issuer's total number of issued shares excluding treasury shares and subsidiary holdings at the time of the passing of the resolution approving the mandate after adjusting for:—
        (a) new shares arising from the conversion or exercise of convertible securities;
        (b) new shares arising from exercising share options or vesting of share awards, provided the options or awards were granted in compliance with Part VIII of Chapter 8; and
        (c) any subsequent bonus issue, consolidation or subdivision of shares.
        Adjustments in accordance with Rule 806(3)(a) or Rule 806(3)(b) are only to be made in respect of new shares arising from convertible securities, share options or share awards which were issued and outstanding or subsisting at the time of the passing of the resolution approving the mandate.
        (4) If the general mandate is obtained before listing, the issuer may treat its post-invitation total number of issued shares excluding treasury shares and subsidiary holdings as its total number of issued shares excluding treasury shares and subsidiary holdings for the purpose of Rule 806(3).
        (5) An issuer cannot rely on the general mandate for an issue of convertible securities if the maximum number of shares to be issued upon conversion cannot be determined at the time of issue of the convertible securities.
        (6) A general mandate may remain in force until the earlier of the following:—
        (a) the conclusion of the first annual general meeting of the issuer following the passing of the resolution. By an ordinary resolution passed at that meeting, the mandate may be renewed, either unconditionally or subject to conditions; or
        (b) it is revoked or varied by ordinary resolution of the shareholders in general meeting.

        Amended on 31 March 201731 March 2017, 26 June 201826 June 2018 and 7 February 20207 February 2020.