Ask the Expert January 2013
Q: My company is a listed company in Hong Kong and I would like to know whether we can use solely electronic means to communicate with shareholders?
Since December 2010, Hong Kong incorporated companies have been able to communicate electronically with their shareholders (Companies Ordinance Part IVAAA). The Hong Kong Stock Exchange also allows listed companies, if they are permitted by their own constitutional documents, to communicate with both their registered and non-registered shareholders electronically (Rule 2.07 of the Main Board Listing Rules or Rule 16.04 of the GEM Listing Rules).
To meet the regulatory requirements, a listed company wishing to adopt electronic communications would initially send a notification letter together with a reply form to its registered shareholders. These shareholders are asked to choose the language and their preferred means of receipt of corporate communications and to return the reply form to the share registrar within 28 calendar days. The choices of communication methods will typically include receiving the English and/ or Chinese printed copies or accessing through the company’s website. Corporate communications includes the annual report, interim report, notice of meeting, listing document, circular, proxy form and any document issued for the information or action of shareholders. Those shareholders who have not replied within the deadline are deemed to have consented to receive a web-based version of corporate communications.
Subsequently, each time the issuer publishes a corporate communication, it should send a notification to those shareholders who have expressly elected or who have been deemed to have consented to receive the website version of the communication. Such notification can be in the form of a letter or an email. For those shareholders who have elected to receive physical copies, the company must continue to send them hardcopies in their preferred languages.
For non-registered shareholders, the Hong Kong Stock Exchange allows the issuers to simply send them a notification together with a request form when it publishes a corporate communication, without the need to seek for their choices on the preferred means of receipt beforehand. Those who wish to receive a hardcopy may fill out a request form.
The share registrar will record the preference of both the registered and non-registered shareholders who have returned request forms. Ongoing communications will be sent to these shareholders according to their preferences until they have ceased to be shareholders of the company. Shareholders are allowed to change their language preferences and the means of receiving corporate communications at any time. The issuer is required to provide an email address and a hotline during office hours for shareholder inquiries on any communications.
Since shareholders may separately request hardcopies from time to time, issuers will need to reserve a certain quantity of corporate communications to cater for such requests. As it is not easy to ascertain the exact quantities required issuers should consider using digital printing, which is more cost-effective for small print-runs.
Lina Wynn,Head of Client Services
Computershare Hong Kong Investor Services Ltd firstname.lastname@example.org www.computershare.com