Disclosure of interests of share charge under HK securities law

By Philip Wong, Gallant Solicitors & Notaries
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Consequent to the effect of globalization, multinational trade transactions have created demand for cross-border financing, and the situation of foreign banks accepting Hong Kong listed securities as loan security has become commonplace.

This article explores the current regulatory and disclosure regime in Hong Kong, where shares of Hong Kong listed companies are charged to foreign banks as loan security.

Philip WongPartnerGallant Solicitors and Notaries
Philip Wong
Partner
Gallant Solicitors and Notaries

Current regulatory regime

Substantial shareholders, directors and chief executives of listed companies are required, under part XV of the Securities and Futures Ordinance (SFO) (chapter 571 of the Laws of Hong Kong), to give notice upon the occurrence of certain events affecting perceptions of the value of the listed companies.

Pursuant to the SFO, interests in shares include holding shares as security. Hence, when a person or corporation obtains a charge over shares of a listed company as loan security, and such security exceeds a certain percentage, there is an obligation to make a statutory disclosure.

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Philip Wong is a partner at Gallant Solicitors and Notaries in Hong Kong

Gallant Solicitors & Notaries
5/F, Jardine House, Connaught Place
Central, Hong Kong
www.gallantho.com

Contact details:

Tel: +852 2526 3336

Fax: +852 2845 9294

Email: philipwong@gallantho.com

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