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824

Every issue of company warrants or other convertible securities not covered under a general mandate must be specifically approved by shareholders in general meeting.

825

In procuring the approval of shareholders in a general meeting, the circular to the shareholders must include the recommendation(s) of the board of directors of the issuer on such an issue of company warrants or convertible securities and the basis for such recommendation(s).

Amended on 29 September 201129 September 2011.

826

When listing company warrants or other convertible securities, the issuer should ensure a sufficient spread of holdings to provide for an orderly market in the securities. As a guide, the Exchange expects at least 100 warrantholders for a class of company warrants.

827

Company warrants or other convertible securities may be listed only if the underlying securities are (or will become at the same time) one of the following:

(1) A class of equity securities listed on the Exchange.
(2) A class of equity securities listed or dealt in on a stock market approved by the Exchange.

828

Each company warrant must:

(1) give the registered holder the right to subscribe for or buy one share of the issuer; and
(2) not be expressed in terms of dollar value.

Amended on 31 March 201731 March 2017.

829

The terms of the issue must provide for:

(1) adjustment to the exercise price or conversion price and, where appropriate, the number of company warrants or other convertible securities, in the event of a rights issue, bonus issue or subdivision or consolidation of shares, setting out the specific formula;
(2) the expiry of the company warrants or other convertible securities to be announced, and notice of expiry to be sent to all holders of the company warrants or other convertible securities at least 1 month before the expiration date; and
(3) any material amendment to the terms of the company warrants or other convertible securities after issue to the advantage of the holders of such securities to be approved by shareholders, except where the amendment is made pursuant to the terms of the issue.

Amended on 7 February 20207 February 2020.

830

An issuer must announce any adjustment or amendment made to the terms of the issue. In the case of an adjustment, the announcement must state the specific formula, whether the adjustment has been reviewed to be in accordance with the formula, the identity of the reviewer and its relationship to the issuer.

Amended on 7 February 20207 February 2020.

831
(1) An issuer must not:
(a) extend the exercise period of an existing company warrant; or
(b) issue a new company warrant to replace an existing company warrant.
(2) Except where the adjustments are made pursuant to the terms of the issue, an issuer must not:
(a) change the exercise price of an existing company warrant; or
(b) change the exercise ratio of an existing company warrant.

Amended on 7 February 20207 February 2020.

832

A circular or notice to be sent to shareholders in connection with a general meeting to approve the issue of company warrants or other convertible securities must include at least the following information:

(1) The maximum number of the underlying securities which would be issued or transferred on exercise or conversion of the company warrants or other convertible securities.
(2) The period during which the company warrants or other convertible securities may be exercised and the dates when this right commences and expires.
(3) The amount payable on the exercise of the company warrants or other convertible securities.
(4) The arrangements for transfer or transmission of the company warrants or other convertible securities.
(5) The rights of the holders on the liquidation of the issuer.
(6) The arrangements for the variation in the subscription or purchase price and in the number of company warrants or other convertible securities in the event of alterations to the share capital of the issuer.
(7) The rights (if any) of the holders to participate in any distributions and/or offers of further securities made by the issuer.
(8) A summary of any other material terms of the company warrants or other convertible securities.
(9) The purpose for and use of proceeds of the issue, including the use of future proceeds arising from the conversion/exercise of the company warrants or other convertible securities.
(10) The financial effects of the issue to the issuer.

833

The following additional requirements apply to an offer of company warrants or other convertible securities by way of a rights issue or bought deal:

(1) The issuer's announcement of the rights issue or bought deal must include either:
(a) the exercise or conversion price of the company warrants or other convertible securities, or
(b) a price-fixing formula to determine the exercise or conversion price. The price-fixing formula must not contain any discretionary element and the amount of premium or discount (in relation to the underlying share price) must be specified.
(2) Where a price-fixing formula is adopted:
(a) if the issue is not underwritten, the issuer must fix and announce the exercise or conversion price before the close of the offer; or
(b) if the issue is underwritten, the issuer must fix and announce the exercise or conversion price before the commencement of nil-paid rights trading.
(3) An offer of company warrants or convertible securities by way of a bought deal must comply with Part V of this Chapter.

834

For the purpose of this Part, a "bought deal" is an issue of company warrants or other convertible securities to a financial institution which will in turn offer them to the issuer's shareholders on a pro-rata basis, usually in conjunction with a loan facility provided by that financial institution to the issuer.

835

An issuer making a bonus issue of company warrants must also comply with Rules 836 and 837.