Hong Kong Exchanges and Clearing Limited proposes listing rule amendments to enhance the regulation of employee share plans

Hong Kong Exchanges and Clearing Limited (HKEX) published a consultation paper in late 2021 proposing Listing Rule amendments relating to share option and award schemes, impacting listed issuers.

What do these changes include?

The current Chapter 17 Listing Rules applies to share option schemes, but not share award schemes. With the increasing adoption of share award schemes by Hong Kong listed companies, it is proposed that Chapter 17 Listing Rules is expanded to include share award schemes.

Other changes that HKEX have proposed include, but is not limited to:

• Eligible participants of share schemes have now been defined to include Employee Participants, Related Entity Participants and Service Providers.
• The current 10% scheme mandate limit to be applied to all share schemes, which may be refreshed by shareholders once every three years.
• Vesting period will have a minimum of 12 months, unless a shorter period is approved by the remuneration committee.
• The trustee holding unvested shares of a share scheme shall abstain from voting on matters that require shareholders’ approval.
• Various disclosure requirements.

Click here to access the consultation paper and to obtain details of the proposed changes.

How Computershare will support our clients

As Asia’s largest employee share plan administrator, Computershare has provided formal feedback to the consultation paper and the proposed changes to Chapter 17 of the Listing Rules. We believe these changes provides much needed clarity and progress the regulation a positive direction to cover for both share option and share awards schemes.

We will keep you updated as these developments unfold.

If you have any questions, please reach out to your Computershare Relationship Manager.