In response to media enquiries, Hong Kong Exchanges and Clearing Limited (HKEx) issues the following statement regarding recent news reports about electronic voting at general meetings.
Recent reports suggested HKEx was behind other markets in terms of electronic voting and the implementation of a scripless market. They also suggested HKEx had failed to allocate adequate resources for the development of its market infrastructure and should provide facilities to enable investors to vote online or by telephone.
HKEx wishes to clarify that it has invested in its market infrastructure each year since its listing in 2000 and that electronic voting via CCASS, the Central Clearing and Settlement System for its securities market, has been possible since the mid-1990s.
Since 1996, CCASS Participants other than Investor Participants (IPs) have been able to give their voting instructions to HKSCC Nominees, a wholly-owned member of the HKEx group, via CCASS Terminals in respect of their holdings in CCASS.
As a result of a 1999 system enhancement, CCASS Participants were enabled to submit electronic instructions to HKSCC Nominees to appoint persons to attend listed companies' general meetings and vote at the meetings in person.
The Investor Participant service introduced in 1998 allows IPs to submit voting instructions to CCASS via the CCASS phone system. In 2000, the service was enhanced to give IPs Internet access to CCASS. IPs can use the Internet to submit their voting instructions or choose to attend a listed company's meeting when shares in the company are held in their CCASS stock account.
Since 2007, Stock Segregated Account with Statement (SSA) service users have been able to use the CCASS Internet system and CCASS phone system to submit voting instructions in relation to their holdings in the SSA, provided that they have been authorised by the Broker Participant or Custodian Participant associated with the account to use the service.
It should be noted that HKSCC Nominees only forms part of the Register of Members of listed companies, which is managed by listed companiies' share registrars. Registered members of listed companies whose shares are held outside CCASS are not able to vote through CCASS' electronic voting system.
Implementation of Scripless Market
The implementation of the scripless market initiative requires the enactment of enabling legislation. Therefore, the question of whether Hong Kong's securities market should be scripless is a matter of Government policy.
HKEx concluded with the Federation of Share Registrars a few years ago the operational arrangements and system changes for the implementation of the initial phase of the scripless market initiative, dematerialisation of physical scrip in the CCASS Depository.
HKEx will continue liaising with the Securities and Futures Commission (SFC) to work with the Government on the initiative.
Requirements for Shareholder Approval of Privatisation Schemes
The Takeovers Code administered by the SFC and the Companies Ordinance contain certain requirements for privatisation schemes, including shareholder approval at general meetings in terms of number of shareholders and value of shares held by shareholders. The requirements are neither stipulated in the CCASS rules nor administered by HKEx or its subsidiaries.