Shareholding Disclosure - Hong Kong SAR

Lowest initial long threshold: 5% (substantial shareholdings and certain sensitive industry issuers in Banking & Finance and Media).

Substantial shareholdings: Disclosure starts at 5%. Wide-ranging regime, including economic interests in shares. 5% holders must also disclose 1% short positions, without netting. Multiple exemptions available, including de minimis exemption for certain trivial changes - refer to Memorandum.

Other long disclosures: During takeovers and in certain sensitive industries.

Short position disclosure: Starting at lower of HK$30M / 0.02% of value of Designated Securities (net short positions in shares).

All references in this summary to 'Hong Kong' refer to Hong Kong SAR

Thresholds

Long positions: 5% of voting shares of the relevant class (a “notifiable interest”), crossing over a whole % point above 5% (e.g. increasing from 6.8% to 7.1%) and dropping below 5%.

Short positions: Where holding a 5% notifiable interest, disclose a short position of 1%, crossing over a whole % point (e.g. increasing short position from 1.9% to 2.1%) and dropping below 1%.

Note the de minimis exemption – certain trivial changes crossing a whole % number are not disclosable. Netting off long and short positions is not permitted.

Change in nature

Disclosure required on a change in nature of the interest, e.g. on exercise of an option.

Note the same percentage level exemption - a change in nature disclosure is not required in certain circumstances.

Issuers in scope

Issuers with securities listed on the Main Board or the Growth Enterprise Market of the SEHK.

Interests

Interests in issued and unissued voting shares and equity derivatives, and short positions in voting shares and equity derivatives

 Equity shares

Depositary receipts e.g. ADRs, GDRs

Secondary listing

Suspended shares

Convertible preference shares

Convertible debt securities

Warrants referenced to unissued shares

Covered warrants

Exchangeables

Subscription rights (nil paid and open offer)

Single stock future (physically settled)

Writer/seller of a put option (physically settled)

Buyer of a call option (physically settled)

Cash settled (e.g. CfDs/single name equity swaps)

Equity index/share basket instruments (cash settled)

ETFs

Stock loan

Stock borrow

Key exemptions 

Multiple exemptions available. Application of exemptions is complex and fact-specific. In the case of uncertainty, voluntary disclosure can be made. Not all exemptions apply to short positions.

Key aggregation

Parent company: Aggregate and disclose interests of it and its controlled corporations. A wholly-owned subsidiary whose ultimate holding company complies with its duty of disclosure is exempt from making a disclosure. Disaggregation exemption for parent of investment manager/custodian/trustee if criteria are met.

Investment manager: Aggregate and disclose managed holdings where it has investment and/or voting discretion. The fund also has an interest in the managed shares and may need to make separate disclosure.

How to disclose

By 23:59 within 3 business days of disclosable event.

10 business days for the more unusual “Initial Notification”, e.g. on issuer becoming listed.

To SEHK via the DION online system (prior registration recommended). Use the standard form.

Articles

Issuers governed by the substantial shareholding rules may not impose lower/intermediate disclosure thresholds in their constitutional documents.

Restriction

Ban on naked short selling of securities (e.g. shares, DRs and units in certain collective investment schemes) at/through SEHK. Covered short selling permitted for Designated Securities.

Position disclosure

Disclose net short positions (NSPs) in Designated Securities (list of Designated Securities posted on HKEx website). Corporate "umbrella" funds Calculate and report NSP separately for each collective investment scheme (not aggregated with positions of other schemes within the same corporation).

Thresholds

For shares: the lower of HK$30M and 0.02% of the value of total Designated Securities issued by the issuer. For interests in collective investment schemes: HK$30M.

Disclosure scope

NSPs in Designated Securities. Derivatives (physically or cash settled) are not counted towards the short position.

Key exemptions

Yes, including market making activities (restriction only). No relevant exemptions from the disclosure obligation.

How to disclose

Calculate at SEHK close of trading each Friday and report by midnight within 2 business days. If SFC mandates daily reporting, calculate daily and report within 1 business day. To SFC via web-based Short Position Reporting Service (prior registration required). Use the standard form.

Additional disclosures and investment limits apply to equity holdings in issuers in certain industries, some of which require pre-acquisition notification/approval. See below for starting thresholds. Only requirements based on a specified equity holding threshold are considered. Restrictions apply to foreign & domestic investors, except sound broadcasting unqualified persons restriction, which applies to foreign investors.

Aviation Control (e.g. 30% voting rights) - notify an arrangement that could trigger licensee's notification requirement.

Banking/finance 

• Exchange/Clearing House: 5% (of issuer/parent) prior approval; 35% hard stop unless approved.
• Banking:10% (of issuer/parent) - prior approval (notification if issuer incorporated outside Hong Kong).
• Stored Value Facility Licensee: 10% - prior approval.
• Financial Intermediary: >10% (direct or indirect) - prior approval.
• Money Broker: prior notification by money broker of a change in controller.
• Insurance Company: 15% - prior approval (notification if incorporated outside Hong Kong).
• Designated Insurance Holding Company: 15% prior approval and post-acquisition notification

Media 

• Sound Broadcasting: >35% - prior approval for disqualified person (15% if investor is a licensed corporation); 49% hard stop for unqualified person. Restrictions on transfer within 3 years of licence.
• Television: 5% prior approval for unqualified voting controller; >15% prior approval for disqualified person.

FDI  No FDI screening regime.

Rail, Defence, Mining, Real Estate, Telecoms, Utilities No relevant investment restrictions.

Disclosure

Disclose dealings in relevant securities of target during offer period.

Thresholds

Any dealings by a 5% holder. Special rules apply to calculation of 5% holding in this context.

Scope

Public companies in HK / companies with primary listing of equity securities in HK / REITs with primary listing of units in HK, irrespective of incorporation. List of companies in an offer period is publicly available.

Holdings in bidder

In a securities exchange offer, also disclose dealings in company whose securities are offered as consideration / bidder.

How to disclose

By 12 noon the business day following transaction date. An extra business day applies for US time zones. To SFC via the Dealing Disclosure Online Submission system. Use the standard form.

Disclosure

SEHK listed issuers can require shareholders to disclose information about holdings and third party interests.

UBO

Hong Kong issuers not listed on SEHK can require disclosure of information to identify ultimate beneficial owners. It is mandatory to respond.