The expanded paperless listing regime promotes electronic dissemination of corporate communications by listed issuers by, firstly, mandating that listed issuers disseminate corporate communications to their securities holders electronically if this is permitted by applicable laws and regulations and their respective constitutional documents, unless a hard copy is requested by securities holders; and, secondly, allowing an implied consent mechanism for electronic dissemination of corporate communications.

Since most of the listed issuers on The Stock Exchange of Hong Kong Limited are incorporated in offshore jurisdictions, it is important that they pay attention to the laws and regulations in their respective jurisdiction of incorporation. The laws and regulations regarding electronic dissemination of corporate communications vary across different offshore jurisdictions.

From the perspective of Cayman Islands law, neither the Companies Act (2023 Revision), as amended, nor the Electronic Transactions Act (2003 Revision) of the Cayman Islands specifies any restriction in respect of the electronic dissemination of corporate communications. However, listed issuers may have to take an active role in obtaining consent from their securities holders for electronic communications, given that section 8(1) of the Electronic Transactions Act requires that the format of the electronic record and the means of delivery should be acceptable to the parties where a document, record or information is required or permitted by any contract (including the memorandum and articles of association) to be delivered or sent to a person.

Bermuda law imposes more stringent requirements as manifested by section 2AA of the Companies Act 1981, as amended. Pursuant to section 2AA(3) of the Companies Act, a listed issuer should deliver an electronic record of a document by electronic means to a person only at the address or number that has been notified by that person for the purposes of communication by electronic means, meaning that unless the securities holders voluntarily notify the listed issuer of their electronic address or number, the listed issuer has to take steps to obtain the electronic address or number from them. Under section 2AA(4) of the Companies Act, an electronic record of a document is deemed to have been delivered to a person only if (i) it is published on a website; and (ii) the person is sent a notice which includes details of the publication of the document on the website, the address of the website, the place on the website where the document may be found and how the document may be accessed on the website, and how the person is to notify the company that the person elects to receive the document in a physical form if the person wishes to receive the document in a physical form.

We recommend that listed issuers and new listing applicants review their constitutional documents and, if necessary, consult their legal advisers to ensure that their constitutional documents include provisions that permit electronic dissemination of corporate communications to their securities holders. Any provisions mandating hard copy dissemination as the only means of dissemination of corporate communications to securities holders should be removed.

Appleby’s Hong Kong Capital Markets team is highly regarded for its extensive expertise in supporting offshore companies with IPOs, introductions, placements and listings of both equity and debt securities on the Hong Kong, US, Singapore and many other internationally recognised stock exchanges.

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