Reed Smith In-depth

Certain changes, primarily to enhance listed issuers’ corporate governance practices and reporting, will be made to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the Listing Rules) effective from 1 January 2022.

Authors: KC Mok Cynthia Wei


In light of the amendments, as further described below, in respect of the continuing obligations of listed issuers, please, in particular, be reminded to:

(i) ensure that the listed issuer establishes a nomination committee pursuant to the Listing Rules, if the listed issuer fails to set up a nomination committee on 1 January 2022, it must set up a nomination committee and/or appoint appropriate members to the nomination committee to meet the requirement(s) within three months. From 1 April 2022, if the listed issuer fails to set up a nomination committee, it must immediately publish an announcement containing the relevant details and reasons. If a nomination committee has already been established on 1 January 2022, to review the composition of the existing nomination committee and ensure that the requirements of the Listing Rules (as amended) are complied with;

(ii) review the corporate governance structure of the listed issuer to ensure that the new Corporate Governance Code Provision (CP) and new Mandatory Disclosure Requirements (MDR) (and, preferably, also the new Recommended Best Practice (RBP)) can be complied with in the financial year commencing on or after 1 January 2022, and establish, adopt and/or modify the relevant corporate governance policies and procedures of the listed issuer (including (i) its board diversity policy, (ii) its shareholders communication policy, (iii) alignment of the listed issuer’s purpose, values and strategy with its culture, (iv) a mechanism to ensure that independent views and input are available to the board, (v) its anti-corruption policy, (vi) its whistleblowing policy, (vii) its policy on directors’ remuneration, etc.) as appropriate; and

(iii) review the composition of the board of the listed issuer, and: (i) for listed issuers with a single gender board, take steps to ensure that there is no longer a single gender board by 31 December 2024 (or if earlier commitments were made, in accordance with such commitments), and (ii) for listed issuers whose non-executive directors (INEDs) are all INEDs serving more than nine years (Long Serving INEDs) take steps to appoint a new INED by the financial year commencing on or after 1 January 2023.

Please also note that the Stock Exchange has now stated emphatically that, going forward, deviation of CPs and failure to provide considered reasons and explanation in the manner set out in the Corporate Governance Code (CG Code) will be regarded as a breach of the Listing Rules.


In April 2021, The Stock Exchange of Hong Kong Limited (the Stock Exchange) published a “Consultation Paper on Review of Corporate Governance Code and Related Listing Rules”.

The Stock Exchange stated that the key focus of the consultation was to “instil changes in mindset of an issuer’s board, promote board independence, incentivise board refreshment and succession planning, improve board diversity amongst issuers, and enhance communication between issuers and their shareholders and market integrity”.

The conclusions of the consultation were published on 10 December 2021, and, in view of the positive feedback from the market, amendments will be made to the Listing Rules accordingly.