EXPLANATORY NOTES TO DI NOTICES
FORM 3A – DIRECTOR’S/CHIEF EXECUTIVE’S NOTICE
NOTIFICATION OF INTERESTS IN SHARES OF LISTED CORPORATION
General Notes
1. These Explanatory Notes explain the entries that can be seen on a search report that shows a DI notice “Form 3A – Director’s/Chief Executive’s Notice”. Form 3A is for use by a director or chief executive disclosing an interest in shares of a Hong Kong listed corporation of which he/she is a director or chief executive under Part XV of the Securities and Futures Ordinance (Cap.571)(“the Ordinance”). For ease of reference in these explanatory notes we will refer simply to director and not “director/chief executive”. The director must file the notice with The Stock Exchange of Hong Kong Limited (“SEHK”) and the listed corporation concerned at the same time or one immediately after the other.
2. A series of numbers and titles appears on the screen starting with “1. Name of listed corporation”. The numbers correspond to the numbers on the boxes of Form 3A and the titles are the descriptions of the boxes on Form 3A. The information opposite the titles, or shown in the boxes on the search report, is the information that has been entered by the director on the Form. The information on the form is not checked before being entered on the database and if incorrect information is disclosed by the director then the same information will be reproduced in the search result, uncorrected.
3. Directorss are only required to complete boxes that apply to them so you may find several numbers/boxes are blank. In addition, boxes 6, 10, 11 and part of box 19 (the address of a spouse or minor child that has an interest or a short position in shares of the same listed corporation) contain personal data that cannot be viewed by the public. Unless a director has disclosed that he has a short position the rows on Form 3A entitled “short position” are also not shown on the search report. You can download a blank copy of Form 3A and the detailed Notes giving directions and instructions on completing the Form by visiting the HKEx web-site at https://sdinotice.hkex.com.hk
4. Form 3A should be used for disclosures by a person who is both a substantial shareholder and also a director or chief executive of the listed corporation concerned. Each Form 3A should have been completed in accordance with the directions and instructions in the Notes to the form. These explanatory notes mirror the directions and instructions in the Notes to Form 3A. The information on the form can also be viewed by inspecting the register of Register of Register of Directors’ and Chief Executives’ Interests Short Positions maintained by the listed corporation concerned.
Meaning of “shares” in Form 3A and these Notes.
5. In Form 3A and these Notes the term “shares” describes interests in the shares of a listed corporation.
“Relevant event” and “Initial Notification”
6. A director must give notification of interests in shares of a listed corporation, and any “short position” (explained in Note 14 below) on the occurrence of certain events - called “relevant events” (see s. 308 of the Ordinance). If he is a director or chief executive of a listed corporation relevant events include :
(i) When he becomes interested in the shares of the listed corporation.
(ii) When he ceases to be interested in such shares.
(iii) When he enters into a contract to sell any such shares.
(iv) When he assigns any right granted to him by the listed corporation to subscribe for such shares.
(v) When the nature of his interest in such shares changes ( e.g. on exercise of an option).
(vi) When he comes to have, or ceases to have, a short position in the shares of a listed corporation.
(vii) If he has an interest, or a short position, in shares of a listed corporation at the time when it becomes a listed corporation.
(viii) On commencement of the Ordinance if he has an interest, or if he has a short position, in shares of a listed corporation which has not previously been disclosed.
(ix) If he has an interest, or a short position, in shares of a listed corporation when he becomes a director or chief executive of that corporation.
A notification of relevant events (vii) to (ix) is described in Form 3A and these Notes as an “Initial Notification”.
Timing of notification
7. In the case of events (i) to (vi) in Note 4, a director must give the notification within 3 business days of the day on which he became aware of the relevant event. The term “business day” means a day other than a public holiday and a day on which a black rainstorm warning, or a gale warning, is in force i.e. it would normally include Saturdays but not Sundays. The period is calculated excluding the day that the relevant event occurred.
8. For an Initial Notification, a director must normally give the notification on Form 3A within 10 business days after the relevant event. However, if at that date he was not aware that you had an interest, or a short position, then you must give the notification within 10 business days of the day you became aware that you had such an interest or short position.
The period allowed for filing a notice runs from the time the director knows of the facts that constitute the event (e.g. the purchase of the shares or the delivery of the shares), not the day that he realizes that the event gave rise to a duty of disclosure under Part XV.
Working out the percentage figure of his interest
9. In Boxes 15 and 16 of Form 3A a director are asked to state separately the percentage figure of his interest in shares of the listed corporation. To work this out you express the total number of shares in which he is interested as a percentage of the number of shares of the listed corporation in issue (i.e. the number in Box 4). This figure should have been rounded to two decimal places.
10. In calculating the total number of shares in which a director is interested he must include all joint interests (see Note to Box 21 below) interests through derivatives (see Note 10 below) and any such interests in shares of the same listed corporation that any of the following persons and trusts have :
(i) His spouse and any child of his under the age of 18 (see notes to Box 19);
(ii) A corporation which he controls (i.e. a corporation is a “controlled corporation” if he controls one-third or more of the voting power at general meetings of the corporation, or if the corporation or its directors are accustomed to act in accordance with his directions) (see notes to Box 20);
(iii) A trust, if he is a trustee of the trust (other than a trust where he is a bare trustee i.e. where he has no powers or duties except to transfer the shares according to the directions of the beneficial owner) (see notes to Box 22);
(iv) A discretionary trust, if he is the “founder” of the trust (e.g. he had the trust set up or put assets into it) and can influence how the trustee exercises his discretion (see notes to Box 22);
(v) A trust of which he is a beneficiary.
11. A director must also count as his short position any short positions that the persons and trusts mentioned in Note 10 have. This may create a short position (if you do not have a short position already) or increase the size of his short position.
12. In calculating the level of his interest in shares a director must add together both direct and indirect interests. He must not net off long positions and short positions but must disclose these separately. Indirect interests include interests in shares underlying “equity derivatives”. Equity derivatives include instruments such as options, warrants, stock futures and are referred to in these notes as “derivatives”. “Underlying shares” are the shares that may be required to be delivered to a person, or by a person, under the derivatives, and include the shares used to determine the price or value of the derivatives (e.g. In the case of an issue of “European Style Cash Settled Call Warrants 2001-2002 relating to ordinary shares of HK$10.00 each in XYZ Ltd. issued by ABC Investment Bank” the “underlying shares” are ordinary shares of HK$10.00 each in XYZ Ltd.).
“Long positions” and “short positions”
13. A director has a “long position” if he has an interest in shares, including interests through holding, writing or issuing derivatives under which, for example :
(i) he has a right to take the underlying shares;
(ii) he is under an obligation to take the underlying shares;
(iii) he has a right to receive money if the price of the underlying shares increases; or
(iv) he has a right to avoid or reduce a loss if the price of the underlying shares increases.
14. A director has a “short position” if he borrows shares under a securities borrowing and lending agreement, or if he holds, writes or issues financial instruments (including derivatives) under which, for example :
(i) he has a right to require another person to take the underlying shares;
(ii) he is under an obligation to deliver the underlying shares;
(iii) he has a right to receive money if the price of the underlying shares declines; or
(iv) he has a right to avoid a loss if the price of the underlying shares declines.
15. The number of shares in which a director are taken to be interested, or to have a short position, through derivatives is:
(i) the number of shares required to be delivered to him, or by him, under the derivatives;
(ii) the number of shares by reference to which the amount payable under the derivatives is derived or determined; or
(iii) (in the case of stock futures contracts) the contract multiplier times the number of contracts he holds.
If any party to a derivative can choose whether to settle in cash or by delivery then use (i) to work out the number of shares in which he is interested. If it is not possible to determine the number of shares in which a substantial shareholder is taken to be interested (or have a short position) at the date when he first acquires an interest in the underlying shares through an equity derivative then he need not file a notice. However, he should file a notice when he first becomes aware of the number of shares that will be delivered to him/will be required to be delivered by him. For example, if the number of shares that he will receive under an equity derivative is determined by the price of the shares on a given date in the future (and there is no minimum or maximum number that he is bound to get) then no duty of disclosure arises on entering into the derivative. Once the number of shares that he will receive is known a duty of disclosure arises.
16. Directors are asked not to send copies of share purchase agreements and other documents to SEHK or the listed corporation concerned when filing this Form 3A (except as indicated in the Notes to Box 23). Attaching a document that explains the transaction in question does not discharge the duty to complete the prescribed form. Copies of any documents that are sent to SEHK are maintained in a register and are available for inspection by the public. To inspect these documents please contact SEHK.
17. The “Outline of Part XV” (“Outline”) published by the Securities and Futures Commission (“SFC”) gives further guidance on the situations in which a notice has to be filed under Part XV. A copy of the Outline can be downloaded from the SFC’s web site http://www.hksfc.org.hk.
Specific Notes
If a director is giving notification that he has ceased to have a notifiable interest then you need only complete boxes 1 to 16 and 24 of Form 3A. In the case of other events all boxes that apply to the director should be completed. If there are some boxes in the Form that do not apply to a director he is instructed that these should be either left blank or he should insert “NIL”. A director who is also a substantial shareholder of the listed corporation concerned should have read the special notes for completion of Boxes 17 to 22 on page 13 and completed these boxes accordingly.
Information relating to the listed corporation
Box 1 This is the name of the listed corporation of which he is a director or chief executive.
Box 2 This is the stock code of the listed corporation in whose shares he is interested.
Box 3 A few corporations have two classes of share capital, each with voting rights (e.g. “A” and “B” shares). A director is instructed to state the class of shares in which he is interested. If he has an interest in two classes of shares then he should complete a separate notice for each class of shares.
Box 4 A director is instructed to state the number of shares (in the class of shares in which he is interested) which have been issued at the date of the relevant event. If the number of shares in issue is greater immediately after the relevant event than it was immediately before that event then he should have stated the higher figure.
Information relating to the director or chief executive
Boxes 5 to 11. A director is instructed to state the details as indicated. He should have stated his name in full as it appears on his Hong Kong identity card. If he has no Hong Kong identity card he should have stated his name in full as it appears on his passport, with his surname first. For example, a director whose name appears on his HKID Card as “ Wong, Ging Teng Anthony” would complete Box 5 as follows :
|
5. Name of director (English) as printed on HKID/Passport |
|
|
Wong |
Ging Teng Anthony |
|
(Surname) |
(Other names) |
Whereas a director who has no HKID Card and whose name appears in his passport as “Anthony James Hay Wood” would complete Box 5 as follows :
|
5. Name of director (English) as printed on HKID/Passport |
|
|
Wood |
Anthony James Hay |
|
(Surname) |
(Other names) |
A director need not fill in Boxes 8 and 9 if he does not have a Chinese name. Equally he need not fill in Box 5 if he does not have an English name. Box 11 is optional. The data entered in Boxes 6, 10 and 11, and the address in Box 19 is not be available for viewing by the public when searching the DI pages of the HKEx web-site.
Information relating to the relevant event
Box 12 A director is instructed to state the date of the relevant event (explained in Note 4) which gave rise to the Notice.
Box 13 In the case of events (i) to (vi) in Note 4, if he became aware of the relevant event on a date later than the date that it occurred, then the date that he became aware of the event that triggers the reporting obligation will appear in Box 13.
For an Initial Notification, if he was not aware that he had an interest, or a short position, at the date of the relevant event then he will have put the date that he became aware that he had such an interest in the shares in Box 13.
Box 14 Box 14 asks for details of the relevant event. This is the event that triggers the Notice. In the case of relevant events (i) to (vi) in Note 4 the details that the director should have given in Box 14 relate to the shares bought/sold or involved at that time – not the shares which he already has.
In the case of an Initial Notification the details that he must give relate to the shares bought by the director in the 4 months immediately before the date of the relevant event.
In Box 14 column 2 a director is instructed to enter the Code from Table 1 below which best describes the relevant event. You will see from Note 8 above that if a person connected with the director acquires an interest in shares their interest will be treated as his interest. For example, if a company that he controls acquires shares of the listed corporation he should treat the acquisition as his acquisition and use the appropriate Code – in this case Code 121.
A director is instructed to use the row entitled “short position” in Box 14 if he is filing the notice because of a change in a short position. The normal position is that either a long position or a short position will give rise to a duty of disclosure (not both simultaneously). However if the transaction creates both a long and a short position simultaneously (such as borrowing shares which gives rise to both a long and a short position) then he can complete both rows.
Table 1 – Event or change
|
Code |
LONG POSITIONS |
|
Acquiring an interest |
|
|
Becoming interested in shares of the listed corporation. This includes all acquisitions whether by purchase or gift, or by rights/bonus issue or taking a security interest in shares |
121 |
Ceasing to have an interest |
|
|
Ceasing to have an interest in shares of the listed corporation |
122 |
|
Changes in nature of an interest |
|
|
Entering into a contract to sell shares of the listed corporation |
123 |
|
Exercising a right or an option in respect of shares of the listed corporation |
124 |
Lending of shares of the listed corporation under a securities borrowing and lending agreement |
125 |
Return of shares of the listed corporation lent under a securities borrowing and lending agreement |
126 |
Other events |
|
|
Assigning a right granted by the listed corporation to subscribe for shares of the listed corporation |
127 |
|
On listing of the corporation if he has an interest in shares of the listed corporation |
128 |
|
On commencement of the Ordinance if he has an interest in shares of the corporation |
129 |
|
On becoming a director or chief executive if he has an interest in shares of the corporation |
130 |
SHORT POSITIONS |
|
|
Coming to have a short position in shares of the listed corporation. This includes a short position through holding derivatives and borrowing shares under a securities borrowing and lending agreement |
131 |
|
Ceasing to have a short position in shares of the listed corporation |
132 |
|
On listing of the corporation if he has a short position in shares of the corporation |
133 |
On commencement of the Ordinance if he has a short position in the shares of the listed corporation |
134 |
|
On becoming a director or chief executive if he has a short position in shares of the corporation |
135 |
|
MISCELLANEOUS(long and short positions) |
|
|
Other (This covers any notifiable event not mentioned above) |
136 |
A director is instructed to select from Table 2 below the Code which best describes the capacity or nature of his interest and enter the Code in Box 14 column 3 and/or 4. If he has disposed of an interest in shares he should have chosen the Code describing the capacity in which he held the shares immediately before he disposed of them and entered this Code in Box 14 column 3. If he has acquired an interest in shares he should have chosen the Code describing the capacity in which he held the shares immediately after he acquired them and enter this Code in Box 14 column 4. If he is giving notice of a change in the nature of his interest in shares, he should have completed the Codes describing the capacity in which he held his interest in those shares before and after the relevant event i.e he should have completed both columns 3 and 4. If he is the beneficial owner but another Code also applies, he should have used the latter Code rather than Code 201.
A director is instructed to use the row entitled “short position” if he is filing the notice because of a change in a short position.
|
Table 2 – Capacity
|
Code |
Beneficial owner |
201 |
|
Person having a security interest in shares |
203 |
|
Interests by attribution |
|
|
Interest of his child under 18 or spouse |
204 |
|
Interest of corporation controlled by the director |
205 |
|
Trusts and similar interests |
|
|
Nominee for another person (other than a bare trustee) |
206 |
|
Trustee (other than a bare trustee) |
207 |
|
Custodian |
208 |
|
Founder of a discretionary trust (see General Note 10(iv)) |
209 |
|
Beneficiary of a trust |
210 |
|
Persons acting in concert |
|
|
Interests of any parties to an agreement to acquire interests in a particular listed corporation required to be disclosed under s. 317 (1)(a) and s. 318 |
211 |
|
Interests of any parties to an agreement to acquire interests in a particular listed corporation required to be disclosed under s. 317 (1)(b) and s. 318 (controlling shareholder providing cash/making a loan to other parties to such an agreement) |
212 |
|
Miscellaneous |
|
|
Interests held jointly with another person |
213 |
|
Other |
214 |
In Box 14 column 5 a director is instructed to state the number of shares concerned (e.g. the number of shares he bought that triggered the Notice). For a change in the nature of an interest (e.g. on exercise of an option) he should have stated the number of shares affected by the change.
In Box 14 column 6 he should have chosen the currency in which the price for the interest in shares described in column 5 was paid or received.
Lastly, he should have stated the consideration per share paid or received (for the interest in shares described in column 5) in columns 7/8 or 9/10 of Box 14 under “On Exchange” or “Off Exchange” as appropriate. In column 7 he should state the highest price per share whilst in columns 8 and 9 he should state the average price/consideration per share. An acquisition or disposal is made “On-Exchange” when the transaction took place in the ordinary course of trading on a recognized exchange and “Off-Exchange” covers all other transactions. If no price or consideration has been paid or received, or if the consideration is services provided, the price or consideration should be stated as “0”. Codes describing the principal types of consideration for Off-Exchange transactions are set out in Table 3 below. Using Table 3 the director is instructed to select the Code which best describes the nature of the consideration he paid or received and enter it in Box 14 column 10.
In the case of an Initial Notification the details that must be given in column 8 or 9 of the average prices/consideration paid for the interest in shares described in column 5 relate to the average prices/consideration paid by him in the 4 months immediately before the relevant date. Similarly the nature of the consideration given in column 10 relates to the nature of the consideration paid by him in the 4 months immediately before the relevant date. If the transaction that prompts disclosure is a change in the nature of his interest in shares (e.g. a securities borrowing and lending transaction), a transaction in derivatives, or a change in a short position, the highest price per share and the average price per share (average amount and nature of the consideration for off-exchange trades) should have been left blank.
Table 3 – Nature of consideration |
Code |
Nature of consideration
|
Code |
Cash |
301 |
Surrender of rights to shares |
303 |
|
Assets other than cash |
302 |
Services |
304 |
Examples for completing Box 14
The first example shows how to complete Box 14 for relevant events (i) to (vi) in Note 4. Assume that the person completing the form is a director who already owns 4,500,000 shares in the listed corporation of which he is a director. On 31st December 2003 he purchased (through the Stock Exchange) 400,000 shares for HK$800,000 and 100,000 shares for HK$210,000 (all shares to be held beneficially). The relevant date to be inserted in Box 12 would be “31.12.2003” and he should complete Box 14 in the following manner.
14. Details of relevant event
|
|
Relevant event code describing circumstances ( see Table 1) |
Code describing capacity in which shares were held (see Table 2) |
Number of shares bought/ sold or involved |
Currency |
On Exchange |
Off Exchange |
|||
|
Before relevant event |
After relevant event |
Highest price per share |
Average price per share |
Average consideration per share |
Consideration Code (see Table 3) |
||||
|
Long position |
121 |
|
201 |
500,000 |
HKD |
2.10 |
2.02 |
0 |
|
|
Short position |
|
|
|
|
|
|
|
|
|
The second example shows how Box 14 should be completed in the case of an Initial Notification. Assume that the person completing the form is a shareholder who, prior to 1st September 2003 owns 4,500,000 shares in a listed corporation. On 31st December 2003 he is appointed a director of the listed corporation. On 15th September 2003 he had purchased (through the Stock Exchange) 400,000 shares for HK$800,000 and 100,000 shares for HK$210,000 (all shares held as trustee). The relevant date to be inserted in Box 12 would be “31.12.2003” and he should complete Box 14 in the following manner.
14. Details of relevant event
|
|
Relevant event code describing circumstances ( see Table 1) |
Code describing capacity in which shares were held (see Table 2) |
Number of shares bought/ sold or involved |
Currency |
On Exchange |
Off Exchange |
|||
|
Before relevant event |
After relevant event |
Highest price per share |
Average price per share |
Average consideration per share |
Consideration Code (see Table 3) |
||||
|
Long position |
130 |
|
207 |
500,000 |
HKD |
2.10 |
2.02 |
0 |
|
|
Short position |
|
|
|
|
|
|
|
|
|
Box 15 In column 2 of Box 15 a director is instructed to state the total number of shares in the listed corporation concerned in which he was interested, and those in which he had a short position, immediately before the relevant event. This figure includes all joint interests, interests through equity derivatives and deemed interests (see note 8). In column 3 please he should have stated the percentage figure of his interest immediately before the relevant event. Note 7 explains how to calculate the percentage figure.
Box 16 He should have completed Box 16 in the same manner as Box 15 specifying the number of shares in the listed corporation concerned in which he was interested, and those in which he had a short position immediately after the date of the relevant event. This figure includes all joint interests, interests through equity derivatives and deemed interests (see note 8).
Capacity in which interests in Box 16 are held
Box 17 If the notification is an Initial Notification a director is instructed to complete Box 17. He should have selected from Table 2 the Code which best describes the capacity in which he held the shares listed in Box 16 and enter that Code in Box 17 column 1. If he held some of his interests in one capacity (e.g. as beneficial owner), and other interests in another capacity (e.g. as trustee) then he should have used two Codes (on different rows) and stated the number of the interests in shares held in each capacity (on different rows) in column 2.
If he also had a short position he should have stated the capacity or capacities in which he held that short position, using the appropriate Code(s), in column 3.
However, a director who is also a substantial shareholder of the listed corporation concerned should have read the special notes for completion of Boxes 17 to 22 on page 13 and completed the boxes accordingly.
Derivative interests
Box 18 If this is an Initial Notification, he should have given details in relation to all the shares in which he is interested through derivatives.
If this is not an Initial Notification, he should only have given details in relation to the shares involved in the relevant event. However, a director who is also a substantial shareholder of the listed corporation concerned should have read the special notes for completion of Boxes 17 to 22 on page 12 and completed the boxes accordingly.
In either case, he should have selected from Table 4 the code which best describes those derivatives and entered it in Box 18 column 2.
Table 4 – Category of derivatives |
Code |
Category of derivatives
|
Code |
Derivatives listed or traded on a Stock Exchange or traded on a Futures Exchange |
|
Unlisted derivatives |
|
Physically settled options |
405 |
Physically settled options |
409 |
Cash settled options |
406 |
Cash settled options |
410 |
Cash settled futures |
407 |
Other |
411 |
Other |
408 |
|
|
If any party to a derivative can choose whether to settle in cash or by delivery then he should treat that derivative as physically settled.
If he has an option, he should have stated the first date that the option can be exercised in Box 18 column 3 and the last date on which any option can be exercised in column 4. If he has another type of derivative he should have stated the maturity date in column 4.
The director should have stated the number of shares in which he derives an interest (or a short position) from the derivatives in column 8. Note 13 explains this is worked out. If he has more than one derivative of the same category, the director should have added them together and stated the total number (in one row) in column 8. If he has more than one derivative but they are in different categories the director should have used 2 or more codes (on different rows) and stated the number of shares for each category of derivative (on different rows) in column 8.
Derivatives granted by the listed corporation
If the derivatives have been granted to the director by the listed corporation then he must give details of those equity derivatives on a separate row in Box 18 if the relevant event was :
(i) the grant of derivatives or rights under the derivatives - when he should state the price per share paid or received, or the consideration per share given or received, for the grant of the derivatives or rights under the derivatives in column 5.
(ii) the exercise of rights under the derivatives - when he should state the price per share paid or received, or the consideration per share given or received, on the exercise of rights under the derivatives in column 6.
(iii) the assignment of the derivatives or of rights under the derivatives - when he should state the price per share paid or received, or the consideration per share given or received, on the assignment of the derivatives or rights under the derivatives in column 7.
If no price was paid or received, and no consideration given or received, then he should insert the figure “0” in the column which applies to him.
If the derivatives were granted to any of the persons mentioned in Note 8 by the listed corporation, and the relevant event is the grant, the exercise of rights under or the assignment of those derivatives then he should have given the details mentioned in the preceding paragraph.
Interests of children under 18 and/or spouse
Box 19 If the director’s spouse (or child under 18) is interested in shares in the same listed corporation then his spouse’s interest/his child’s interest is taken to be his interest. Details of that interest should also have been taken into account in completing Boxes 15 and 16.
If this is an Initial Notification, he must complete Box 19 if his spouse/child has shares in the listed corporation. The director should have stated the name and address of the spouse (or child under 18), his/her address and the number of shares in which he is interested through his spouse (or child under 18) in Box 19.
If this is not an Initial Notification, he must only give details if his spouse (or child under 18) was interested in the shares involved in the relevant event. The director should have stated the name and address of the spouse (or child under 18), his/her address and the number of shares involved in the relevant event in which he/she was interested. However, a director who is also a substantial shareholder of the listed corporation concerned should have read the special notes for completion of Boxes 17 to 22 on page 12 and completed the boxes accordingly.
If his family member has a short position then the same principles apply.
The data entered in column 2 of Box 19 (the address of children and/or spouse) is not available for viewing by the public when searching the DI pages of the HKEx web-site.
Interests held by a corporation that the director controls
Box 20 If the director is (a) entitled to exercise, control the exercise of, one-third or more of the voting power at general meetings of a corporation, or (b) a corporation or its directors are accustomed to act in accordance with his directions, and that corporation is interested in shares of the listed corporation concerned then the corporation’s interest will be taken to be his interest. Details of that interest must also be taken into account in completing Boxes 15 and 16.
If this is an Initial Notification, the director should have completed Box 20 if a corporation that he controls (referred to in these notes as a “controlled corporation”) has shares in the listed corporation. If there is more than one corporation then details of each corporation should have been stated separately.
If this is not an Initial Notification, he must only give details if a corporation that he controls was interested in the shares involved in the relevant event. He should have stated the name and address of the corporation that he controls and the number of shares involved in the relevant event in which he was interested. However, a director who is also a substantial shareholder of the listed corporation concerned should have read the special notes for completion of Boxes 17 to 22 on page 13 and completed the boxes accordingly.
If the corporation that he controls has a short position then the same principles apply.
A director is instructed to complete Box 20 as follows -
Column 1 : State the name of the controlled corporation starting with the top controlled corporation in the group (if you control more than one corporation).
Column 2 : State the address and place of incorporation (in brackets) of the controlled corporation.
Column 3 : If he controls the controlled corporation state his name in column 3. If another corporation named in column 1 of Box 20 controls the controlled corporation then state that corporation’s name in column 3. (The substantial shareholder’s name will normally appear in the first row of column 3. The controlled corporation named in the first row of column 1 normally appears in the second row of column 3 and so on).
Column 4 : State the percentage of the shares in the controlled corporation that the person named in column 3 of the same row controls.
Column 5 : If the controlled corporation holds the interest in shares of the listed corporation directly (as opposed to the interest being a deemed interest) place a ”Y” in column 5, if the interest is a deemed interest place a “N” in column 5. If the controlled corporation holds some shares of the listed corporation directly, and some shares indirectly, details of the interest held directly should be given in one row of Box 20 and the shares held indirectly (the deemed interest) should be given in the following row (see the example below where the direct and indirect interests of Wong Industries Ltd. are stated separately).
Column 6 and 7 : State the number of shares of the listed corporation in which the controlled corporation is interested (has a short position).
Example of how Box 20 should have been completed.
Assume that Mr. Wong, a director of XYZ Ltd. (a listed corporation) owns 100% of the shares in a private corporation ABC (Hong Kong) Ltd. which owns 51% of the shares in DEF (Hong Kong) Ltd. which owns 35% of GHI (Hong Kong) Ltd. and 65% of Wong Industries Ltd. Wong Industries Ltd. in turn owns 100% of the shares in Wong Asset Management Ltd.
The group holdings in XYZ Ltd. are as follows : GHI (Hong Kong) Ltd. has a call option over 25,000,000 shares (physically settled) and has a short position in 10,000,000 shares under a cash settled equity derivative (details of these derivative interests will have been given in Box 18). Wong Industries Ltd. owns 10,000,000 shares and Wong Asset Management Ltd. owns 15,000,000 shares.
Group structure and holdings
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Wong Ging Teng Anthony |
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100% |
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ABC ( Hong Kong ) Ltd. |
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51% |
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DEF ( Hong Kong ) Ltd. |
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35% |
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65% |
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GHI ( Hong Kong ) Ltd. |
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Wong Industries Ltd. |
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25,000,000 shares |
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100% |
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(10,000,000 short position) |
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10,000,000 shares |
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Wong Asset Management Ltd. |
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15,000,000 shares |
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XYZ Ltd. ( A listed corporation ) |
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In this example the entries in Box 20 would be as follows –
20. Further information in relation to interests of corporations controlled by director
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Name of controlled corporation |
Address and place of incorporation |
Name of controlling Shareholder
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% control |
Direct Interest (Y/N) |
Number of shares |
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Long positions |
Short positions |
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ABC (Hong Kong) Ltd. |
Unit 1, 26/F Wong Industrial Bldg Chai Wan, HK (Hong Kong) |
Wong Ging Teng Anthony |
100% |
N |
50,000,000 |
10,000,000 |
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DEF (Hong Kong) Ltd. |
Unit 1, 26/F Wong Industrial Bldg Chai Wan, HK (Hong Kong) |
ABC (Hong Kong) Ltd. |
51% |
N |
50,000,000 |
10,000,000 |
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GHI (Hong Kong) Ltd. |
Unit 1, 26/F Wong Industrial Bldg Chai Wan, HK (Hong Kong) |
DEF (Hong Kong) Ltd. |
35% |
Y |
25,000,000 |
10,000,000 |
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Wong Industries Ltd. |
Unit 1, 26/F Wong Industrial Bldg Chai Wan, HK (Bermuda) |
DEF (Hong Kong) Ltd. |
65% |
Y |
10,000,000 |
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Wong Industries Ltd. |
Unit 1, 26/F Wong Industrial Bldg Chai Wan, HK (Bermuda) |
DEF (Hong Kong) Ltd. |
65% |
N |
15,000,000 |
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Wong Asset Management Ltd. |
Unit 1, 26/F Wong Industrial Bldg Chai Wan, HK (British Virgin Islands) |
Wong Industries Ltd. |
100% |
Y |
15,000,000 |
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Joint interests
Box 21 If the director is interested in shares of the listed corporation concerned jointly with another person then they are both taken to be interested in all of the shares held jointly. Details of that interest must also be taken into account in completing Boxes 15 and 16.
If this is an Initial Notification, he must complete Box 21 if he is interested in shares of the listed corporation concerned jointly with another person. The director should have stated the name of the person who owns the interest in the shares jointly with him, his/her address and the number of shares in which he/she is interested in Box 21.
If this is not an Initial Notification, he must only give details if the shares in which he is interested jointly with another person were involved in the relevant event. The director should have stated the name of the person who owns the interest in the shares jointly with the director, his/her address and the number of shares involved in the relevant event in which he/she was interested. However, a director who is also a substantial shareholder of the listed corporation concerned should have read the special notes for completion of Boxes 17 to 22 on page 12 and completed the boxes accordingly.
The same principles apply to short positions held jointly.
Interests of trustee or beneficiary of a trust or person who has set up a discretionary trust
Box 22 If the director is : (a) a trustee of a trust, (b) a beneficiary of a trust, or (c) a person who is the “founder” of a discretionary trust ( e.g. he has had a discretionary trust set up or put assets into a discretionary trust) and can influence how the trustee exercises his discretion, then he is taken to be interested in all of the shares of the listed corporation in which the trust has an interest (or a short position). Details of that interest should also have been taken into account in completing Boxes 15 and 16. He should ignore an interest in reversion or remainder, an interest of a bare trustee.
If this is an Initial Notification, the director must complete Box 22 if he is interested in shares of a listed corporation through a trust. The director may have stated the name of the Trust which owns the interest in the shares and its address in Box 22 columns 1 and 2 but is not required to do so if he wishes these details to remain private. He should have selected from Table 5 below the Code which best describes his status in relation to the trust and enter the Code in Box 22 column 3and stated the number of shares in which the trust is interested (has a short position) in Box 22 column 4 (and 5).
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Table 5 - Status in relation to a trust
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Code |
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Trustee of a trust |
501 |
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Beneficiary of a trust |
502 |
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Founder of a discretionary trust |
503 |
If this is not an Initial Notification, he must only give details if the shares in which he is interested through a trust were the shares involved in the relevant event. The director should have stated the name of the Trust which owns the interest in the shares, its address and the number of shares involved in the relevant event in which the trust was interested. However, a director who is also a substantial shareholder of the listed corporation concerned should have read the special notes for completion of Boxes 17 to 22 on page 12 and completed the boxes accordingly.
Box 23 If he is a party to an agreement with other parties to acquire interests in shares in the listed corporation in Box 1 in the circumstances set out in s. 317 (1)(a) or (b) then the director should have added any shares in which any other party to the agreement is interested to his own interests in working out whether (together) they were interested in 5% or more of the shares in a listed corporation and must file a notice. If (together) they were interested in more than 5% the director will be a substantial shareholder in addition to being a director. . Details of the interests of any other party must also be taken into account in completing Boxes 14 to 18. He must state the name of each of the other parties to the agreement, his/her address and the number of shares in which he/she is interested apart from the agreement in Box 23. In the last row of Box 23 he must state the number of shares in which he is interested under sections 317 and 318. This will be the total of firstly all shares which have been purchased pursuant to the agreement by any of the parties to the agreement and secondly all shares in which the other parties to the agreement are interested apart from the agreement(defined in s. 318(2)).
Example of how to complete Box 23
For example, assume that Mr. Wong Ging Teng and 2 other persons agree to buy shares in XYZ Ltd. (a listed corporation). They are each already interested in a number of shares of XYZ Ltd. which they purchased before they entered into the s.317 agreement. Under the s.317 agreement they each purchased a further 20,000,000 shares in XYZ Ltd. Their shareholdings are as follows –
Concert party |
Number of shares apart from the s.317 agreement |
Number of shares purchased pursuant to the s.317 agreement |
Total |
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Mr. Wong Ging Teng |
50,000,000 |
20,000,000 |
70,000,000 |
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Mr. A |
4,000,000 |
20,000,000 |
24,000,000 |
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Mr. B |
2,000,000 |
20,000,000 |
22,000,000 |
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Totals |
56,000,000 |
60,000,000 |
116,000,000 |
Assume also that Mr. Wong is completing the notice. He will already have stated in Box 16 that he is interested in 116,000,000 shares. He has to state the number of shares in which the other parties are interested “apart from the agreement” and the total shares in which he is interested by the application of s.317 and 318 (the 60,000,000 shares bought pursuant to the agreement and the further shares that the other parties are interested in “apart from the agreement”). Accordingly, Mr. Wong will then complete Box 23 as follows –
23. Further information from a party to an agreement under section 317 (Please see Notes for further information required)
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Names of other parties |
Address |
Number of shares |
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Mr. A |
Unit 1, 25/F Wong Industrial Bldg, Chai Wan, HK |
4,000,000 |
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Mr. B |
Unit 1, 24/F Wong Industrial Bldg, Chai Wan, HK |
2,000,000 |
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Total number of shares in which director is interested under section 317 and 318 |
66,000,000 |
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He must also -
(i) attach a separate sheet to the notification stating that he is a party to an agreement to which s. 317 (1)(a) or (b) applies;
(ii) include a copy of any written agreement, contract or other document which records any terms or details of the agreement; and
(iii) if there are no such papers as are mentioned in (ii), or if such papers do not record the material terms of the agreement, include a written memorandum setting out the material terms of the agreement.
The memorandum required under (iii) should include details of any cash or consideration involved and the identity of all persons between whom such cash or other consideration is passed or is intended to pass. If the parties are interested in any derivatives, the exercise or conversion price, expiration date and exercise period should be disclosed. The memorandum must be signed by the substantial shareholder or his duly authorized agent.
A notification that a person has ceased to be a party to an agreement to which s. 317 (1)(a) or (b) applies shall also state that he or the other party (as the case may be) has ceased to be a party to the agreement and, in the latter case, include the name and address of the other party.
Box 24 Form 3A should have been dated the same day as it was filed with SEHK.
Box 25 This number relates to the number of continuation sheets the director has completed. These are already displayed automatically in the search results.
Box 26 The director should have stated the number of attachments filed with the form. The only documents that should be submitted are those referred to in relation to Box 23. If he is filing electronically, or if there are no attachments, he need not complete Box 26.
Special Notes
Directors who are also substantial shareholders – Notes for completion of Boxes 17 to 22
1. If a director is also a substantial shareholder of the listed corporation concerned, he may have separate duties to file notices (one in each capacity) as a result of a single event. For example, a person who is interested in 5.9% of the shares of a listed corporation and buys a further 0.2% will have to file a notice because he is a director (and therefore has to disclose all transactions) and will also have to file a notice as a substantial shareholder because his interest has crossed the 6% level.
2. If a director is also a substantial shareholder then he must use Form 3A to discharge his duty to disclose his interests (short position) in his capacity as both a substantial shareholder and as a director. This avoids the need to file both Form 1 (Individual substantial shareholder notice) and Form 3A.
3. If he is completing Form 3A as both a director and a substantial shareholder he must complete Boxes 17 to 22 giving the details in respect of all the shares in which he is interested or has a short position. Hence in Box 17 he have to state the capacity in which he holds all the shares that he is interested in; in Box 18 he must give details in relation to all the shares in which he is interested through derivatives; in Box 19 he must give details of any interest his spouse/child has shares in the listed corporation; in Box 20 he must give details of any interest a corporation controlled by him has in such shares; in Box 21 he must give details of any joint interests he has; and in Box 22 he must give details of any shares he is interested in through a trust.