December 2011
Dear Sirs,
GEM Listing Rule amendments to Property Valuation Requirements and
to the Review of the Corporate Governance Code
We enclose reprinted pages of the GEM Listing Rules and the filing instructions. The reprinted pages incorporate amendments to implement proposals in the Joint Consultation Conclusions on Proposed Changes to Property Valuation Requirements published on 20 October 2011 and certain of the proposals in the Consultation Conclusions on Review of the Corporate Governance Code and Associated Listing Rules (“Corporate Governance Conclusions”) published on 28 October 2011. We will publish another Update containing the remaining proposals in the Corporate Governance Conclusions in due course.
We have amended the GEM Listing Rules to:-
Property valuation requirements
 |
For applicants:
| - |
require different valuation requirements for property activities and non-property activities; |
|
|
| - |
for property activities, require property valuations unless the property interest has a carrying amount below 1% of the applicant’s total assets. The total carrying amount of property interests not valued must not exceed 10% of the applicant’s total assets. Summary disclosure in the listing document is allowed if the market value of a property interest as determined by the valuer is less than 5% of the applicant’s total property interests that are required to be valued; |
|
|
| - |
for non-property activities, require a property valuation only if the carrying amount of a property interest is or is above 15% of the applicant’s total assets; and |
|
|
| - |
for mining activities, not require a separate valuation of property interests ancillary to mining activities if the mining activities and ancillary property interests have been valued as a business or an operating entity. | |
|
|
For issuers:
| - |
remove property valuation requirements for an acquisition or disposal of a company listed on the Exchange; |
|
|
| - |
for an acquisition or disposal of an unlisted company, not require valuations if the carrying amount of a property interest in the company being acquired or disposed of is below 1% of the issuer’s total assets. The total carrying amount of property interests not valued must not exceed 10% of the issuer’s total assets; and |
|
|
| - |
for mining activities, not require a separate valuation of property interests ancillary to mining activities if the mining activities and ancillary property interests have been valued as a business or an operating entity. | |
Corporate governance review
|
emphasise directors’ duties and provide practical guidance to directors; |
|
|
|
remove the requirement for a company secretary to be ordinarily resident in Hong Kong and introduce a requirement for company secretary to undergo 15 hours’ professional training in a financial year; |
|
|
|
remove the requirement for issuers to publish a Next Day Disclosure Form following the exercise of an option for shares in the issuer by a director of its subsidiaries; |
|
|
|
allow a chairman at a general meeting of shareholders to exempt certain prescribed procedural and administrative matters from a vote by poll; |
|
|
|
clarify the disclosure requirements regarding poll results; |
|
|
|
remove the 5% exemption for voting by a director on a board resolution in which he has an interest; |
|
|
|
require disclosure of information on the retirement or removal of a director or supervisor; |
|
|
|
require disclosure of information on the appointment, resignation, re-designation, retirement or removal of a chief executive; |
|
|
|
require disclosure of director’s information on all civil judgments of fraud, breach of duty, or other misconduct involving dishonesty; |
|
|
|
clarify the requirement on disclosure of sanctions; |
|
|
|
introduce a new Rule requiring shareholders’ approval at a general meeting of any proposal to appoint or remove an auditor before the term of his office; |
|
|
|
require the circular relating to a major transaction or a connected transaction to contain information on the competing interests of any proposed director of the issuer and his associates; |
|
|
|
require disclosure of a chief executive’s emoluments by name in the issuer’s financial statements; and |
|
|
|
require fuller contact details of the issuer’s authorised representatives. |
Coming into effect