SFC proposes amendments to takeovers rules

19 Jan 2018

The Securities and Futures Commission (SFC) today launched a three-month consultation on proposed amendments (Note 1) to the Codes on Takeovers and Mergers and Share Buy-backs (Codes).

Key proposals enhance investor protection by increasing the voting approval threshold for whitewash waivers (Note 2) to 75% of independent shareholders and empowering the Takeovers Panel to require compensation to be paid to shareholders who have suffered as a result of a breach of the Codes.

Other proposed amendments clarify the obligations of persons dealing with the Takeovers Executive, the Takeovers Panel and the Takeovers Appeal Committee in all Codes transactions, requiring their prompt cooperation and assistance and the provision of true, accurate and complete information.

"The proposed changes are aimed at affording fair treatment for shareholders and protecting the interests of those who participate in Hong Kong’s securities markets," said Mr Ashley Alder, the SFC’s Chief Executive Officer.

In addition, the consultation sets out proposed amendments to the term "associate" as well as the approval of delistings by independent shareholders in jurisdictions which do not afford compulsory acquisition rights.

Interested parties are invited to submit their comments to the SFC by 19 April 2018 via the SFC website (www.sfc.hk), by e-mail to takeoverscode_review@sfc.hk, by post or by fax to 2810 5385.



  1. The proposals resulted from a review conducted by the Takeovers Executive (ie, the Executive Director of the SFC’s Corporate Finance Division or any delegate of the Executive Director) in consultation with the Takeovers Panel.
  2. Under the Codes, the Takeovers Executive may waive an obligation to make a general offer triggered by the issue of new shares in a comparatively narrow set of circumstances. This is known as a whitewash waiver.

Page last updated : 19 Jan 2018