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Slide Regulatory Compliance
Bonus issue - Don’t forget the price cap!
Takeaway
The novel coronavirus disease (COVID-19) has caused material impact on market volatility in Hong Kong and around the world. To think outside the box, some listed companies may consider a scrip issue to minimize impact on cashflow whilst rewarding shareholders’ continued support, and to enhance the liquidity of their shares in the market.

Please be reminded that under Rule 13.64A of the Main Board Listing Rules (Rule 17.76A of the GEM Listing Rules), a listed company must not undertake a subdivision or bonus issue of shares if its share price adjusted for the subdivision or bonus issue is less than HK$1 based on the lowest daily closing price of the shares during the six-month period before the announcement of the subdivision or bonus issue. The threshold was set to prevent companies from splitting shares to a level where the share price is more susceptible to price volatility.
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admin@hkytl.com (+852) 3468 7202 (+852) 3468 7203 alfredleung@hkytl.com jamesyeung@hkytl.com April 2020 Home/ Insights Listed companies should gather all the relevant information (including the requirements of the relevant rules and regulations) before they proceed to signing or announcing any corporate actions. All information contained in this article are for the purposes of general information only. This article is not to be treated as legal advice or opinion. YTL LLP accepts no responsibility for any loss or damage arising directly or indirectly from any action taken (or not taken) which may arise from reliance on information contained in this article. Please seek legal advice concerning your own circumstances and any legal queries that you may have.