Basic HTML Version
11
The Role of the Depositary Bank
| Types of DR Programs
Table 6: Market Requirements
Hong Kong Stock Exchange
(HDRs)
(1)
London Stock Exchange (GDRs)
Main Market Professional
Securities Market (PSM)
NYSE (ADRs)
Minimum
Public Float
25% of total issued share capital
(inclusive of shares underlying in the
HDRs and all fungible shares) subject
to a minimum of ~US$6.4 million (HK
$50 million)
Minimum of 25% of shares in
public hands
FSA will consider lower FF if it is
satisfied that there is sufficient
liquidity in market
US$ 100 million worldwide or US$ 60
million for an affiliated company
Operating
History
3 years; and ownership continuity for
the most recent audited financial year
3 years from the date of the
prospectus; exceptions may apply
3 years or 12 months for an affiliated
company
Minimum
Market
Capitalization
Company must meet one of the
following financial standards:
1. Profit Test
2. Market Cap/Rev/Cash Flow Test
3. Market Cap/Rev Test
GBP £700,000
Company must meet one of the following
financial standards:
1. Earnings Test
2. Valuation/Revenue Test
• Valuation/Revenue with Cash Flow
Test; or
• Pure Valuation/Revenue Test
3. Affiliated Company Test
Accounting
Requirements
Hong Kong Financial Reporting
Standards or IFRS; U.S. GAAP
Main Market: IFRS or equivalent
accounting standards
PSM: National GAAP
Prepared to U.S. GAAP; reconciled to U.S.
GAAP; or prepared to IFRS for permitted
companies
Initial/Annual
Listing Fees
(2)
Based on Market Capitalization of
USD 1) $26 million; 2) $260 million;
3) $650 million
Initial:
Annual:
1. $22,750
1. US $18,850
2. US $58,500 2. US $70,330
3. US $78,000 3. US $138,970
Based on Market Capitalization of USD
1) £25 million; 2) £250 million;
3) £650 million
Initial:
Annual
(CCP/Non-CCP)
(2)
:
GBP £45,000 GBP £4,623 / £2,465
GBP £145,000 GBP £4,623 / £2,465
GBP £193,200 GBP £4,623 / £2,465
Fees are based on the number of shares
issued
Initial Fee (USD$):
• $0.0032 per share; plus
• A one-time fee of $50,000;
• Up to a maximum total fee of $250,000
Annual Fee (USD$):
0.001/share; with a minimum fee
of $45,000
Ongoing
Obligations/
Deadline for
the Disclosure
of Financial
Results
Annual reports published within
4 months of fiscal year-end. Semi-
annual reports published within
3 months after the date upon which
the financial period ended
Main Market: Annual financial reports
published within 4 months of fiscal
year-end. Semi-annual financial
reports published within 2 months of
the period end
PSM: Annual reports and accounts
published within 6 months of fiscal
year-end
Must file an annual report on Form 20-F
within 4 months of fiscal year-end
NYSE requires a Company to disclose
material information that may affect the
market in the Company’s securities by
notifying the NYSE
The Company is not required to file a
document with the NYSE if it has filed such
document with the SEC through EDGAR
1. Based on HK Main Board listing requirements. 2. Amounts are calculated in USD for illustration purposes using an exchange rate of 1 HK$ = US$0.13 as of January
2015. 3. LSE-listed issuers whose securities are subject to Central Counterparty (CCP) clearing services are subject to a £18,750 annual fee; LSE-listed issuers whose
securities are not subject to CCP clearing services are subject to a £10,000 annual fee. Sources: The Hong Kong Stock Exchange, London Stock Exchange and NYSE.
A Level I ADR can be “sponsored” by
a single depositary bank involving the
issuer or “unsponsored” by multiple
depositary banks with no involvement
from the issuer. Unsponsored ADRs
are created based on investor demand
and the result of access is the same
compared to a sponsored Level I
program as both trade on the OTC
market. In an unsponsored program,
the issuer must still qualify for 12g3-
2(b) exemption and the depositary
bank will file the F-6 and perform
most corporate action services.
Ultimately the choice between listed and
OTC-traded DRs depends on the issuer’s
strategic objectives and how it wants to
leverage the DR vehicle.