Investment in SFC regulated Hong Kong company



Our firm was contacted by a law firm in France to assist one of their clients who had recently moved to Hong Kong to commence an asset management company with a Chinese partner (Target). The Target had recently obtained the required licenses type 4 and 9 from the Securities and Finance Commission (SFC) and its 2 members had already entered into the full investment documentation with an investor company based in the United Kingdom (USD10M). The law firm in France was looking for a local firm to review the investment documentation, namely term sheet, investment agreement and shareholders agreement and make the necessary adaptation to Hong Kong law, as well as coordinate the completion of the investment.



The investment documentation had been already agreed and changes had to be kept minimal to avoid renegotiation delays. But the following steps had not been taken in consideration and the schedule had to be reviewed to anticipate for:

  • the required delays to obtain the SFC approval for change of more than 10% shareholding in a licensed company;
  • amendments to the articles of association to reflect the shareholders agreement;
  • coordination with the company secretary of the Target for preparation of the required resolutions for signature of the investment documentation (after localization) by the Target, allotment of new shares and appointment of new directors.



We prepared the following documents:

  • closing checklist including all required steps to comply with local rules in Hong Kong;
  • markup version for each document of the investment documentation: term sheet including added condition precedent (SFC’s approval of the change of shareholding), investment agreement and shareholders agreement;
  • amended articles of association.

We arranged to liaise with the company secretary of the Target to obtain an estimate of their fees for the supporting work required and delays required.

We explained the amendments to the investment documentation during a conference call organized by the 2 members of the Target with their investor based in the United Kingdom.



The amendments proposed were approved further to the conference call with all parties and the investment could materialise as intended by the parties after the required SFC approbation was granted.

Related Articles