The Stock Exchange of Hong Kong Limited ("
HKSE") has recently concluded its consultation on "Proposals to Further Expand the Paperless Listing Regime and Other Rule Amendments". From an offshore legal adviser's perspective, one of the standout proposals adopted is the requirement for HKSE listed issuers to ensure their constitutional documents enable them to hold hybrid general meetings and provide e-voting options, to the extent permitted by applicable laws and regulations. We set out what HKSE listed issuers need to do next to address this requirement and what the benefits are in adopting the changes.
Implementation Timeline
HKSE listed Issuers must review their constitutional documents to identify and remove any provisions that prevent the holding of hybrid general meetings and the use of e-voting. They should include express provisions that enable these practices. This may involve amending the articles of association or bye-laws to explicitly allow for virtual attendance and electronic voting.
Issuers must amend their constitutional documents by their next annual general meeting held after 1 July 2025.
Next Steps
Walkers can assist with all following aspects to comply with the listing rules requirements:
- Review the issuer's current constitutional documents to identify and remove any provisions that prevent the holding of hybrid general meetings and the use of e-voting and to ensure that the amendments to the constitutional documents are compliant with applicable laws.
- Provide legal advice in drafting the necessary provisions to facilitate hybrid meetings and e-voting and measures to ensure that securities holders' rights to speak and vote are maintained during hybrid general meetings, for example, making necessary technological arrangements for virtual attendance and real-time voting.
- Issuers may consider informing their securities holders about the changes to be made to the constitutional documents that would enable the holding of hybrid meetings and the use of e-voting – we can provide the relevant advice in relation to the shareholder outreach from Cayman Islands, BVI and Bermuda law perspectives.
Client Benefits: Enhancing Shareholders Engagement and Efficiency
The requirement to enable hybrid general meetings and e-voting in issuers' constitutional documents is not only a regulatory compliance task, it is an opportunity for the issuers to enhance shareholder engagement (promoting efficiency). This requirement is part of the broader efforts of the HKSE to modernise the listing process and enhance shareholder engagement, making it easier for investors to participate in corporate governance. By adopting these changes, issuers can provide greater flexibility and convenience for their securities holders, fostering a more inclusive, efficient and modern corporate governance environment. Here are some key benefits:
- Increased Participation: Hybrid meetings and e-voting allow shareholders, especially those who are geographically dispersed or have mobility issues, to participate in meetings without the need to travel.
- Real-time Interaction: Shareholders can engage in real-time discussions and voting, ensuring their voices are heard and their votes are counted promptly.
- Cost Savings: Reducing the need for physical meeting arrangements and printed materials can lead to cost savings for issuers.
- Sustainability: Embracing digital solutions aligns with global sustainability goals by reducing the environmental impact associated with traditional paper-based processes.
Conclusion
As issuers need to ensure their constitutional documents permit and provide for hybrid general meetings and the use of e-voting by their next annual general meeting held after 1 July 2025, please reach out to one of the Walkers contacts listed below, who can assist with the review and amendments of constitutional documents.
