Being listed in Asia: continuing obligations and investor relations

A Main Board listing brings obligations that start on the first day of dealings and do not lapse while the securities remain listed. The Exchange collects most of them in Chapter 13 of the Listing Rules, titled Continuing Obligations¹. For a board used to a home market in North America or Australia, we find it useful to read the Hong Kong regime as four layers: continuing disclosure, the transaction rules, the governance and ESG codes, and a statutory duty on inside information.

Chapter 13: disclosure that does not lapse

Chapter 13 opens with a general obligation of disclosure at Rule 13.09, the duty to keep the market informed of material developments in the issuer's affairs¹. Beside it sit rules on responding to enquiries from the Exchange (Rule 13.10), on trading halts and suspensions (Rule 13.10A), and on announcing in Hong Kong any information disclosed to another stock exchange (Rule 13.10B), which is the rule that binds a company keeping its home listing¹.

The chapter then names situations the Exchange treats as calling for disclosure, among them an advance to an entity, a pledge of shares by the controlling shareholder, loan covenants tied to the controlling shareholder's performance, and a breach of a loan agreement by the issuer¹. Continuing disclosure requirements follow at Rules 13.20 to 13.22, and Rule 13.23 hands off to the separate regimes for notifiable transactions, connected transactions, takeovers and share repurchases¹.

The reporting calendar

The annual report is governed by Rule 13.47 and the interim report by Rule 13.48¹. Rule 13.49 requires a preliminary announcement of results for the full financial year¹. Rules 13.50 to 13.50B provide for suspension where an issuer fails to publish timely financial information¹.

The calendar is the easier half of the discipline. The harder half is continuous: knowing, on any given day, whether something has happened that the market must be told.

Connected transactions under Chapter 14A

A connected transaction is a transaction between the listed issuer's group and a connected person, broadly its directors, substantial shareholders and their associates². Chapter 14A defines connected person at Rule 14A.07 and associate at Rules 14A.12 to 14A.15².

Above the thresholds set by the chapter, a connected transaction needs a written agreement (Rule 14A.34), an announcement (Rule 14A.35) and independent shareholders' approval (Rules 14A.36 to 14A.39)². Where shareholders' approval is required, the chapter also provides for an independent board committee, an independent financial adviser and a circular (Rules 14A.40 to 14A.47)². The size tests are the percentage ratios at Rules 14A.77 to 14A.79, the same classification tests that size the separate notifiable transactions regime in Chapter 14². Below the de minimis level at Rule 14A.76 the transaction is exempt, and Rules 14A.81 to 14A.86 aggregate related transactions so that a series cannot be split to avoid them².

Continuing connected transactions, the recurring arrangements a group has with its connected persons, need fixed terms in the agreement (Rules 14A.51 to 14A.52), an annual cap (Rule 14A.53) and an annual review by the independent non-executive directors and the auditors (Rules 14A.55 to 14A.59)². For a founder-led company this is the chapter that changes daily life: a lease from a family entity or a loan from a director falls inside it.

Governance and ESG: comply or explain

Rule 13.89 places the Corporate Governance Code within the issuer's continuing obligations, and Rules 13.91 to 13.92 do the same for environmental and social matters¹. The ESG Reporting Code in Appendix C2 has two levels of obligation: mandatory disclosure requirements in Part B and comply or explain provisions in Part C³. An issuer that does not report on a comply or explain provision must give considered reasons in its ESG report, and the Code points to the "What is comply or explain?" section of the Corporate Governance Code in Appendix C1 for the approach³.

The ESG report is published every year for the same period as the annual report, inside it or as a separate document published at the same time, and in either case on the Exchange's website and the issuer's own³.

Climate has its own part of the Code. Part D, in the version effective 1 January 2025, sets disclosure requirements under four pillars (governance, strategy, risk management, and metrics and targets) and applies to financial years beginning on or after that date³. An issuer must disclose climate-related risks and opportunities that could reasonably be expected to affect its cash flows, access to finance or cost of capital over the short, medium or long term³. A report prepared under IFRS S1 and IFRS S2 is treated as complying with Part D³.

Inside information: the statutory duty

Separately from the Listing Rules, Part XIVA of the Securities and Futures Ordinance imposes a statutory duty on listed corporations⁴. Inside information under section 307A(1) is specific information about the corporation, a shareholder or officer, or its listed securities, which is not generally known to those who deal or would be likely to deal in the securities, and which if generally known would be likely to materially affect the price⁴.

Section 307B(1) requires disclosure to the public as soon as reasonably practicable after the information comes to the corporation's knowledge, unless a safe harbour in the Ordinance applies⁴. The SFC treats that phrase as meaning the corporation should immediately take all steps necessary in the circumstances to disclose, and the steps that may precede an announcement include ascertaining sufficient details, an internal assessment of the matter and its likely impact, professional advice where required, and verification of the facts⁴. Until disclosure the information must be kept strictly confidential, and where confidentiality cannot be maintained or may have been breached the corporation must disclose immediately⁴. Under section 307B(3), a disclosure that is false or misleading as to a material fact, by statement or omission, is itself a failure to disclose where an officer knew or ought to have known, or was reckless or negligent⁴.

Equal access, and what it means for investor relations

Section 307C(1) requires that disclosure be made in a manner that provides equal, timely and effective access by the public⁴. The SFC's reading is that inside information goes to the market as a whole, so that all users of the market have equal and simultaneous access to the same information⁴. Section 307C(2) gives certainty that publication through the electronic publication system operated by the Stock Exchange satisfies that requirement, and the SFC expects corporations to use that channel⁴.

The consequence for investor relations is direct. A call with selected analysts, or a quiet word with a large holder, is not disclosure to the market as a whole⁴. Chapter 13 holds the same line with its rule on equality of treatment of holders of securities (Rule 13.75)¹. Investor relations in Hong Kong therefore begin with the announcement, and the analyst conversation follows it.

The next step

Before the listing date, sit down with Hong Kong counsel to produce two documents. The first is a written inside information policy naming the officer who decides whether a matter is disclosable and who files through the Exchange's electronic publication system. The second is a register of every director, substantial shareholder and associate, mapped against each existing arrangement the group has with them, so that each one is classified under Chapter 14A before dealings begin.

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