On 8 January 2025, the Hong Kong Legislative Council passed the Companies (Amendment) Bill 2024 (“Amendment Bill”) introducing the long-awaited treasury shares regime for listed companies incorporated in Hong Kong.
The Amendment Bill aligns with the amendments to the Rules Governing the Listing of Securities on the Stock Exchange (“Listing Rules”) in June 2024, which permit listed companies to repurchase and hold treasury shares for resale. The amendments will come into effect three months after the publication of the amended Ordinance in the Gazette. The tentative date of Gazette is 17 January 2025.
Hong Kong incorporated listed companies will be able to hold, sell, transfer or cancel the brought-back shares after the amendments come into effect. The transfer or sale of treasury shares will be regarded as allotment of shares.
Other amendment
The Amendment Bill will also introduce an ‘implied consent mechanism’. Members and debenture holders are deemed to consent to a company sending information by making the information available on a website if the articles of the company or the debenture instrument contains a provision to this effect. The company shall send a one-off notification to the members or debenture holders to make this implied consent mechanism effective.
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