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Requirements for an offering and listing in the U.K., U.S. or Hong Kong

Requirements for an offering and listing in the U.K., U.S. or Hong Kong



  • Types of notifiable transactions

The Listing Rules set out various categories of notifiable transactions, which are classified according to the ratios of the size of the transaction to the size of the Company’s assets, profits or revenue. If any of the following thresholds is met, the Company is required to comply with the obligations applicable to the relevant type of transaction. In the case of a transaction involving both an acquisition and a disposal, the ratios are calculated using the relevant figures in the larger transaction.13

Transaction type Assets ratio



Profits ratio Revenue ratio

Equity capital


Share transaction Less than 5%
Discloseable transaction 5% or more but less than 25%
Major transaction (disposal) 25% or more but less than 75% N/A
Major transaction (acquisition) 25% or more but less than 100%
Very substantial disposal 75% or more N/A
Very substantial acquisition 100% or more
  • Obligations relating to notifiable transactions
Transaction type Notification to the HKSE Announcement[15] Circular to shareholders Shareholders’ approval Accountants’ report
Share transaction Yes Yes No No16 No
Discloseable transaction Yes Yes No No No
Major transaction Yes Yes Yes Yes* Yes (in relation to the target)17
Very substantial disposal Yes Yes Yes Yes* No (in relation to the Group)
Very substantial acquisition Yes Yes Yes Yes* Yes (in relation to the target)
Reverse takeover Yes Yes Yes Yes* 18 Yes (in relation to the target)

*In the event that a shareholder has a material interest in the transaction, he and his associates must abstain from voting.



Connected transactions are transactions between the Company (or any of its subsidiaries) and any connected person19 of the Company. At the time the listing application is filed, any ongoing connected transactions must be identified and appropriate waivers sought from the HKSE.

* * *

First, the Company should identify transactions between itself or its subsidiaries, on the one hand, and its connected persons, on the other. Historic and future pricing information should also be identified.

Second, the Company should determine whether its transactions qualify for any exemptions. The main exemptions are as follows:

Type of Exempted Transaction Exemption From
(A) Revenue transactions with associates of a substantial shareholder who is a passive investor Disclosure, reporting and shareholders’ approval obligations
(B) Provision of goods and services on normal commercial terms
(C) Sharing of administrative services on a fair and equitable cost basis
(D) Transactions in which the ratios calculated using the five “size tests” (other than the profits ratio) are (i) less than 0.1%, (ii) less than 1% and the transaction is a connected transaction only because it involves a person connected at the subsidiary level or (iii) less than 5% and the consideration does not exceed HK$3 million
(E) Transactions in which the ratios calculated using the five “size tests” (other than the profits ratio) are (i) less than 5% or (ii) less than 25% and the consideration does not exceed HK$10 million Shareholders’ approval obligations

Third, all arrangements which do not fall within exemptions (A) to (D) set forth above should be documented. Such agreements should not have a term exceeding three years.

* * *

If a waiver from compliance with the HK Listing Rules is granted, it may be subject to certain conditions imposed by the HKSE.

September 2014
This note is provided for information purposes only and does not constitute legal advice. Specific advice should be sought in relation to any particular situation. This note has been prepared based on the laws and regulations in force at the date of this note which may be subsequently amended, modified, re-enacted, restated or replaced.

13 Rules 14.07 to 14.08 of the HK Listing Rules.

14 This ratio only relates to acquisitions (not disposals) in which the Company issues new equity.

15 The Company is required to publish the announcement on its and the HKSE’s websites.

16 No shareholders’ approval is required if the shares issued as consideration were issued under a general mandate.

17 This applies to acquisitions only.

18 The HKSE’s approval is required.

19 Connected persons include (i) directors (including a director of the Company within the preceding 12 months), chief executive, substantial shareholders and their respective associates and (ii) any non wholly-owned subsidiary of the Company where any connected person(s) in sub-clause (i) is/are (individually or together) entitled to exercise, or control the exercise of, 10% or more of the voting power at any general meeting of such non wholly-owned subsidiary.

Listing Requirements

Hong Kong Stock Exchange

HK Listing Rules

continuing obligations

London Stock Exchange

New York Stock Exchange

depositary receipts

Disclosure obligations

Financial information disclosure

Hong Kong Stock Exchange Prices

Hong Kong Stock Market


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