What we do

Connected Transactions

Lawyers in Charltons regulatory and securities practice regularly advise listed companies on connected transactions issues under the Hong Kong Listing Rules. We provide an insightful and highly personalised service to clients, and aim to deliver legal advice on this complex subject in plain language.

We advise on the various categories of “connected persons” (including senior executives and substantial shareholders and non-wholly-owned subsidiaries) and “connected transactions” (both capital and revenue nature transactions, and both one-off transactions or continuing transactions). We provide guidance to listed companies on their obligations in respect of particular connected transactions, including disclosures in announcements and annual reports, shareholders’ approval, and annual review by independent non-executive directors and auditors (in the case of continuing connected transactions). We also advise on specific exemptions and waivers from all or some of the connected transaction requirements for specific categories of connected transactions.

For connected transactions that fall within the scope of the Hong Kong Listing Rules, we can assist in preparing submissions to the Stock Exchange where appropriate, as well as coordinating the preparation of announcements, circulars, notices of shareholders’ meetings and other documents.

Clients receive high impact advice from multidisciplinary lawyers with broad transactional and regulatory experience. Our team has wide experience across capital markets, corporate finance, M&A and commercial transactions, as well as in dealing with the SFC, the Hong Kong Stock Exchange and other regulatory and governmental bodies in Hong Kong.

In addition to advising on specific connected transaction issues, Charltons also provides training to the boards of both listing applicants and listed companies on their on-going obligations and changes to the regulatory and compliance frameworks.

What are connected transactions ?

Connected transactions, in general, involve transactions between a group of companies (including the company listed on Stock Exchange and the connected persons; and transactions between a group and third parties that may confer benefits to connected persons.


A transaction in relation to an issuer, whether or not it is of a revenue nature in the ordinary and usual course of business, includes:

  1. the acquisition or disposal of assets including deemed disposals;
  2. any transaction involving a listed issuer writing, accepting, transferring, exercising or terminating an option to acquire or dispose of assets or to subscribe for securities;
  3. entering into or terminating finance leases;
  4. entering into or terminating operating leases or sub-leases, including those of properties;
  5. granting an indemnity or a guarantee or providing financial assistance;
  6. entering into any arrangement or agreement involving the formation of a joint venture entity in any form, such as a partnership or a company, or any other form of joint arrangement;
  7. issuing new securities;
  8. the provision of or receipt of services;
  9. sharing of services; and
  10. providing or acquiring raw materials, intermediate products and finished goods.

Connected transactions

Connected transaction includes :

  1. any transaction between a listed issuer and a connected person, including acquisition or disposal of interest in a company;
  2. financial assistance;
  3. indemnity or guarantee or providing financial assistance by an issuer to and/or for the benefit of a connected person or any company which is a commonly held entity; and
  4. granting of security over the assets of a listed issuer in respect of any financial assistance made to the listed issuer by a connected person or any company which is a commonly held entity.

Acquisition or disposal of interest in a company

Acquisition or disposal of interest in a company includes a transaction between a listed issuer and a person who is not a connected person, and the transaction involves:

  1. the listed issuer acquiring or disposing of an interest in a company where a substantial shareholder of that company is, or is proposed to be, a controller or is (or will become as a result of the transaction) an associate of a controller. The Stock Exchange may aggregate the interests of any person and his associates in determining whether together they are a “substantial shareholder” of any company.  Where assets (as opposed to businesses) account for 90% or more of such a company’s net assets or total assets, the Exchange will treat the acquisition or disposal of such assets as a connected transaction and an acquisition or disposal of an interest in that company;
  2. the listed issuer acquiring an interest in a company (or an option to acquire such interest) of which a controller (or an associate of a controller) is, or will become, a shareholder where the interest being acquired is:
    • of a fixed income nature;
    • shares to be acquired on less favourable terms than those granted to the controller or its associate; or
    • shares which are of a different class from those held by, or to be granted to, the controller or its associate.
  3. a controller (or an associate of a controller) subscribing on specially favourable terms shares in a company in which the listed issuer is a shareholder; or
  4. a controller (or an associate of a controller) subscribing shares in a company in which the listed issuer is a shareholder but which are of a different class from those held by the listed issuer.

Connected transactions

Hong Kong Listing Rules

Connected persons

Connected transactions issues under Hong Kong Listing Rules for listed companies

Hong Kong connected transactions

Hong Kong connected persons definition

Hong Kong transactional and regulatory legal advice

Stock Exchange Listing Rules

Related party transaction

Acquisition of interest in a company

Disposal of interest in a company
Transaction between a listed issuer and a connected person
Connected persons regulations