Derivative Warrants Listing Rule Changes

1
Derivative Warrants Listing Rule Changes

• Karen Lee
• EVP, Listing, Regulation and Risk Management
• 28 November 2001

2
Placing Guidelines

• Requirement to place 85 of a warrant issue on
  launch no longer applies
• Requirement to place to a minimum of 100 or 50
  placees (depending on the value of warrants
  subscribed for by a placee) no longer applies
• No limit specified for the percentage of an issue
  to be placed or limit on the percentage of an
  issue that may be retained on launch

3
Liquidity Requirement

• Issuer must appoint a Liquidity Provider to
  provide liquidity for warrants
• Liquidity provider must be an Exchange
  Participant but need not be a member of Issuers
  group
• Liquidity Provider must be identified in the
  listing document for a warrant issue
• Liquidity may be provided by Quote Request or
  Continuous Quotes - specify method in listing
  document
• In general provide liquidity five minutes after
  market opens until it closes

4
Warrant Issues

• Minimum market capitalisation of warrant issue on
  launch lowered from HK50 million to HK10
  million
• Maximum market capitalisation on launch set at
  HK100 million
• Limit over the maximum number of a companys
  shares that warrants can be issued over remains
  unchanged at the lower of
• 30 of public float or
• 20 of issued share capital

5
Further Issues

• More than one Further Issue per warrant issue
  will be permitted
• Limit on the market capitalisation for Further
  Issues changed from an aggregate limit of HK50
  million to a limit of HK100 million for each
  Further Issue
• Further Issue permitted at any time prior to
  maturity of derivative warrant
• Further Issue permitted where issuer holds up to
  20 of existing issue

6
Issuers Dealings

• Dealings in warrants by the issuer and members of
  its group in warrants that the issuer has listed
  on the Exchange reported to the Exchange each day
• Dealings in warrants by the issuer and members of
  its group in between the launch date and the day
  of listing must be reported to the Exchange on
  the day of listing
• The Exchange will release the above details on
  teletext and on the web site

7
Listing Document

• Simplifications
• No requirement to provide detailed information on
  the underlying company where it is listed on the
  Exchange
• No requirement to disclose details of other
  outstanding warrant issues
• No requirement to disclose details of dealings in
  the shares of a company underlying a warrant
  issue.