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Placement Agreement for Hong Kong

Placement Agreement Template for Hong Kong

A comprehensive legal agreement governed by Hong Kong law that establishes the terms and conditions under which a placement agent will assist a company in raising capital through the private placement of securities. The document outlines the scope of services, fees, responsibilities, and obligations of both the issuing company and the placement agent, while ensuring compliance with Hong Kong securities regulations and the Securities and Futures Ordinance. It includes crucial provisions for investor protection, due diligence requirements, and regulatory compliance mechanisms specific to the Hong Kong financial markets.

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What is a Placement Agreement?

The Placement Agreement serves as a crucial document in Hong Kong's capital markets, establishing the legal framework for private placement transactions. This agreement is typically used when a company seeks to raise capital by issuing securities to specific investors through a placement agent. The document details the appointment of the placement agent, their duties in identifying and securing investors, fee structures, and compliance requirements under Hong Kong securities laws. The Placement Agreement must adhere to the Securities and Futures Ordinance and other relevant Hong Kong regulations, making it essential for both the issuing company and placement agent to clearly define their roles, responsibilities, and risk allocations. It includes specific provisions for due diligence, marketing restrictions, and investor communications, while addressing unique aspects of Hong Kong's regulatory environment.

What sections should be included in a Placement Agreement?

1. Parties: Identifies the contracting parties - typically the company/issuer and the placement agent

2. Background: Provides context for the agreement, including the company's intention to raise capital and the placement agent's qualifications

3. Definitions: Defines key terms used throughout the agreement

4. Appointment and Scope of Services: Details the appointment of the placement agent and specific services to be provided

5. Exclusivity: Specifies whether the appointment is exclusive or non-exclusive and any related conditions

6. Fees and Expenses: Outlines the fee structure, payment terms, and reimbursable expenses

7. Representations and Warranties: Contains representations and warranties from both parties

8. Obligations of the Company: Lists the company's responsibilities and commitments

9. Obligations of the Placement Agent: Details the placement agent's duties and responsibilities

10. Regulatory Compliance: Addresses compliance with relevant Hong Kong securities laws and regulations

11. Confidentiality: Sets out confidentiality obligations of both parties

12. Term and Termination: Specifies the duration of the agreement and termination provisions

13. Indemnification: Details mutual indemnification provisions

14. General Provisions: Contains standard boilerplate clauses including governing law, notices, etc.

What sections are optional to include in a Placement Agreement?

1. Success Fee: Include when there is a performance-based compensation structure

2. Break Fee: Include when there are provisions for fees payable if the placement doesn't proceed

3. Sub-agents: Include when the placement agent may appoint sub-agents

4. Force Majeure: Include when specific force majeure provisions are needed beyond general provisions

5. Non-Competition: Include when restricting the placement agent from working with competitors

6. Marketing Materials: Include when specific provisions about marketing materials and their approval are needed

7. Data Protection: Include when significant personal data processing is involved

8. Anti-Corruption: Include when specific anti-corruption provisions are required beyond general compliance

What schedules should be included in a Placement Agreement?

1. Schedule 1: Scope of Services: Detailed description of services to be provided by the placement agent

2. Schedule 2: Fee Structure: Detailed breakdown of fees, including any success fees or milestone payments

3. Schedule 3: Target Investors: List of target investor categories or specific investors if pre-identified

4. Schedule 4: Due Diligence Requirements: Outline of required due diligence processes and documentation

5. Schedule 5: Marketing Materials Guidelines: Guidelines for preparation and approval of marketing materials

6. Appendix A: Form of Subscription Agreement: Template subscription agreement for investors

7. Appendix B: Compliance Checklist: Regulatory compliance requirements and checklist

8. Appendix C: Required Disclosures: Standard disclosures required under Hong Kong securities laws

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Hong Kong

Publisher

Genie AI

Document Type

Confirmation Letter

Sector

Sales

Cost

Free to use
Relevant legal definitions

















































Clauses


































Relevant Industries

Financial Services

Investment Banking

Securities and Capital Markets

Private Equity

Asset Management

Real Estate

Technology

Healthcare

Manufacturing

Energy

Infrastructure

Telecommunications

Relevant Teams

Legal

Finance

Compliance

Corporate Development

Investment Banking

Risk Management

Corporate Finance

Business Development

Company Secretarial

Treasury

Capital Markets

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Investment Banker

Corporate Lawyer

Compliance Officer

Company Secretary

Director of Capital Markets

Financial Controller

Investment Director

Head of Corporate Finance

Legal Counsel

Risk Manager

Business Development Director

Portfolio Manager

Relationship Manager

Industries








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