The rules on connected transactions are set out in Chapter 14A of the Listing Rules. The objective of the connected transactions rules is to ensure that a listed issuer takes into account the interests of shareholders as a whole when it or one of its subsidiaries enters into connected transactions. Connected transactions include both capital and revenue nature transactions.
They may be one-off transactions or continuing transactions. The general requirements for connected transactions include disclosures in announcements, circulars and annual reports, and shareholders’ approval. Persons with material interests cannot vote on the resolution approving the transaction. Continuing connected transactions also require annual reviews by independent non-executive directors and the auditors. To reduce listed issuers’ compliance burden, exemptions and waivers from all or some of the connected transaction requirements are available for specific categories of connected transactions. These apply to connected transactions that are immaterial to the listed issuer’s group, or specific circumstances where the risk of abuse by connected persons is low. This article summarizes the exemptions and waivers with respect to the connected transactions requirements under the Listing Rules.
