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Hong Kong Stock Exchange publishes concept paper on weighted voting rights

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Hong Kong Stock Exchange publishes concept paper on weighted voting rights

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7. The Consultation Questions

The consultation questions are set out in Chapter 7 of the Concept Paper and are reproduced below. Paragraph and Chapter references are to paragraphs and chapters of the Concept Paper unless stated otherwise.

Question 1: Should the Exchange in no circumstances allow companies to use WVR structures?

Please give reasons for your views.

Please only answer the remaining questions if you believe there are circumstances in which companies should be allowed to use WVR structures.

Question 2: Should the Exchange permit WVR structures:

  1. for all companies, including existing listed companies; or
  2. only for new applicants (see paragraphs 147 to 152); or
  3. only for:
    1. companies from particular industries (e.g. information technology companies) (see paragraphs 155 to 162), please specify which industries and how we should define such companies;
    2. “innovative” companies (see paragraph 163 to 164), please specify how we should define such companies; or
    3. companies with other specific pre-determined characteristics (for example size or history), please specify with reasons.
  4. only in “exceptional circumstances” as permitted by current Listing Rule 8.11 (see paragraph 81) and, if so, please give examples.Please give reasons for your views.

If you wish, you can choose more than one of the options (b), (c) and (d) above to indicate that you prefer a particular combination of options.

Question 3: If a listed company has a dual-class share structure with unequal voting rights at general meetings, should the Exchange require any or all of the restrictions on such structures applied in the US (see the examples at paragraph 153), or others in addition or in substitution?

Please identify the restrictions and give reasons for your views.

Question 4: Should other WVR structures be permissible (see Chapter 5 for examples), and, if so, which ones and under what circumstances?

Please give reasons for your views. In particular, how would you answer Question 2 and Question 3 in relation to such structures?

Question 5: Do you believe changes to the corporate governance and regulatory framework in Hong Kong are necessary to allow companies to use WVR structures (see paragraphs 67 to 74 and Appendix V)? If so, please specify these changes with reasons.

Question 6: Do you have any comments or suggestions regarding the additional matters discussed in paragraphs 33 to 47 of this paper:

  1. using GEM, a separate board, or a professional board to list companies with WVR structures (see paragraphs 33 to 41); and
  2. the prospect of overseas companies seeking to list for the first time on the Exchange with a WVR structure or seeking a further primary or secondary listing here (see paragraphs 44 to 47)?

Question 7: Do you have any other comments or suggestions regarding WVR structures?

8. Responding to the Concept Paper

Responses to the questions raised by the Concept Paper can be made by submitting the Questionnaire which is available on the Exchange’s website at on or before 30 November 2014 either:

  1. By e-mail to The subject line should be marked:

    Re: Concept Paper on Weighted Voting Rights”.

  2. By mail or by hand to:

    Corporate Communications Department
    Hong Kong Exchanges and Clearing Limited
    12th Floor, One International Finance Centre
    1 Harbour View Street
    Hong Kong

    Re: Concept Paper on Weighted Voting Rights

  3. By fax to: 2524 0149.

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