Doing Business in Hong Kong: A JD Supra Legal Reader

For your reference, a roundup of recent legal advisories on a broad range of issues facing companies doing business in and with Hong Kong:

Legal and Regulatory Issues in Hong Kong PIPE Transactions (Skadden, Arps, Slate, Meagher & Flom LLP):

“Private investment in public equity (or PIPE) transactions are an increasingly common source of funding for companies listed on The Stock Exchange of Hong Kong Limited (the HKEx). For listed issuers, PIPEs are filling a gap created by the unavailability of traditional funding sources in the current economic climate and a disinclination to issue new common shares at prices below their perceived value.” Read on>>

Hong Kong Capital Markets Quarterly News — July 2012 (Morrison & Foerster LLP):

“In July 2012, the [Hong Kong Securities and Futures Commission (SFC)] published its Dual Filing Update, which continued to note that listing application materials were not up to the expected standard… The SFC noted that liquidity problems and potential insolvency pose significant risks to the sustainability of a listing applicant.” Read on>>

The 2012 Hong Kong Competition Ordinance (Skadden, Arps, Slate, Meagher & Flom LLP):

“On 22 June 2012, Hong Kong’s Competition Ordinance (the Ordinance) was published following approval by the Legislative Council of Hong Kong. The Ordinance introduces a number of important rules and regulations affecting companies operating in the same market or with a significant presence in a market as well as certain business combinations, and provides for significant potential penalties for noncompliance.” Read on>>

“RMB Bonds in Hong Kong” in Finance: China Bulletin – August 2012 (White & Case LLP):

“On June 8 2012, The National Development and Reform Commission issued the Circular regarding Domestic Non-financial Institutions Issuing RMB Bonds in Hong Kong, which is a follow-up regulation of the Interim Measures for the Administration of the Issuance of RMB Bonds in Hong Kong Special Administrative Region by Domestic Financial Institutions (issued by the People‘s Bank of China on June 8, 2007).” Read on>>

“Mainland and Hong Kong Sign CEPA Supplementary Provisions IX” in China 20/20: Legal and Regulatory Developments – August 2012 (Orrick, Herrington & Sutcliffe LLP):

“On June 29, 2012, the Supplementary Provisions IX to the Mainland and Hong Kong Closer Economic Partnership Arrangement was signed in Hong Kong. Under the supplementary provisions, the Mainland commits, from January 1, 2013, to further relax the market access conditions in 21 service trade sectors involving legal, accounting, construction, medical service, computer and related services, technical testing and analysis services, placement and supply services of personnel, printing, convention and exhibition, other business services, telecommunications, audiovisual, distribution, environment, banking, securities, social services, tourism, cultural, rail transport and individually owned stores.” Read on>>

How to protect your IP at the upcoming trade fairs in Hong Kong (Baldwins l Intellectual Property):

“Every year, numerous trade fairs are organized by the Hong Kong Trade Development Council (“HKTDC”) and held at the Hong Kong Convention and Exhibition Centre. Some exhibitors take this opportunity to display and solicit orders for copied or otherwise infringing products… To enforce your IP rights, the HKTDC will be prepared to accept infringement complaints on the basis of one of a registered trade mark or design or granted patent in Hong Kong or proof of subsistence and ownership of Copyright by the complainant, or an affidavit of copyright ownership.” Read on>>

“Hong Kong Short Position Reporting Regime: Identity of Partners in Partnership Need Not Be Disclosed” in Private Investment Funds Update – June 2012 (Proskauer Rose LLP):

“A new Short Position Reporting Regime came into effect in Hong Kong on June 18, 2012, as previously reported in our advisory, New Short Position Reporting Regime in Hong Kong. The first day for which a report must be filed with the Securities and Futures Commission was Friday, June 22, 2012, and the deadline for filing the first report was midnight (Hong Kong time) on Tuesday, June 26, 2012.” Read on>>

PRC Companies Can Now Tap Hong Kong’s Public Debt Market Via ‘Dim Sum Bonds’ (Pillsbury Winthrop Shaw Pittman LLP):

“Since the second half of 2007, China’s financial institutions have been allowed to issue RMB-denominated bonds in Hong Kong (so-called ‘Dim Sum Bonds’). No mechanism existed for non-financial PRC institutions to offer these bonds directly… This changed on May 2, when the National Development and Reform Committee (NDRC) promulgated the Notice Concerning Offering RMB Denominated Bonds in Hong Kong by Domestic Non-Financial Institution Entities (Notice), which provides a roadmap for direct Dim Sum Bond offerings by non-financial PRC institutions.” Read on>>

“China” in Arbitration World – June 2012 (K&L Gates LLP):

“In a judgment dated 10 May 2012, the Hong Kong Court of Appeal (the “Court of Appeal”) has overturned a judgment of the Hong Kong High Court which had, on grounds of procedural irregularity, set aside an ICC award. The Court of Appeal has reaffirmed that, under the UNCITRAL model law, an award may only be set aside in very limited circumstances.” Read on>>

Hong Kong Court of Appeal Overturns an Order of the Court of First Instance to Set Aside ICC Arbitration Award (White & Case LLP):

“On the facts of the case, the Court of Appeal concluded that there was no violation of due process pursuant to Article 34(2)of the UNCITRAL Model Law. The Court of Appeal also discussed its views on what constitutes a violation of due process and how the Court should exercise its discretion should a violation be established. This decision demonstrates the Hong Kong Courts’ pro-enforcement stance when faced with an application to set aside or enforce an international arbitration award.” Read on>>

Statutory Obligation to Disclose Price-Sensitive Information Effective on January 1, 2013 (Morrison & Foerster LLP):

“Effective on January 1, 2013, HK-listed companies will have a statutory obligation under new Part XIVA of the Securities and Futures Ordinance (SFO) to disclose price-sensitive information (defined as ‘inside information’) to the public, as soon as reasonably practicable after the inside information has come to their knowledge.” Read on>>

“Hong Kong Signals Interest in Joining ASEAN-China Free Trade Area” in China Bulletin: Business, Trade and Competition – June 2012 (White & Case LLP):

“In early March 2012, Dr. Jonathan Choi Koon-shum, a Member of the National Committee of the Chinese People‘s Political Consultative Party (CPPCC) and the Chairman of the Chinese General Chamber of Commerce (Hong Kong), submitted a proposal regarding Hong Kong’s possible accession to the ASEAN China Free Trade Area (ACFTA) during the 5th Session of the 11th CPPPC. This follows a number of closed door meetings over the past several months among officials from Hong Kong, Mainland China and ASEAN on the accession issue.” Read on>>

“NDRC Governing the Issuance of RMB Bonds in Hong Kong by Domestic Non-financial Institutions” in China 20/20: Legal & Regulatory Developments – May 2012 (Orrick, Herrington & Sutcliffe LLP):

“On May 2, 2012, the National Development and Reform Commission (“NDRC”) issued the Notice on Relevant Matters Concerning the Issuance of Renminbi Bonds in the Hong Kong Special Administrative Region by Domestic Non-financial Institutions, which took effect immediately. The notice requires domestically registered non-financial institutions with a legal person status to apply with NDRC for approval before issuing RMB bonds in Hong Kong.” Read on>>

Wall-crossing in Hong Kong: Risk Management Issues (Morrison & Foerster LLP):

“In the UK, there has recently been significant media coverage of market abuse in the context of ‘wall-crossing’, the process by which a securities offering is selectively pre-marketed to potential investors before the deal is publicly announced… In Hong Kong, what are the parameters for such activities, and how will the Securities and Futures Commission and the Market Misconduct Tribunal (the “Tribunal”) approach them?” Read on>>

Listing in Hong Kong: The Process for Delaware Companies (Pillsbury Winthrop Shaw Pittman LLP):

“In February 2012, the Hong Kong Stock Exchange (HKEx) issued Listing Decision HKEx-LD24-2012, which permits companies incorporated in Delaware to list on HKEx if they comply with certain special requirements. These special requirements are in addition to HKEx’s basic quantitative and other listing requirements, and are generally applicable to companies in ‘acceptable’ jurisdictions but not incorporated in Hong Kong or a ‘recognized jurisdiction’ (currently mainland China, Bermuda and the Cayman Islands).” Read on>>

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