Blueprint
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the
month of March
HSBC Holdings plc
42nd
Floor, 8 Canada Square, London E14 5HQ, England
(Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F).
Form
20-F X Form 40-F
(Indicate
by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934).
Yes
No X
(If
"Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-
).
The
following regulated information, disseminated pursuant to DTR6.3.5,
comprises the Notice of Annual General Meeting for 2018 which was
sent to shareholders of HSBC Holdings plc on 7 March 2018. A copy
of the Notice of Annual General Meeting is available at
www.hsbc.com/agm.
HSBC
Holdings plc
Notice of Annual General Meeting at 11.00am on Friday, 20 April
2018
Queen
Elizabeth II Conference Centre Broad Sanctuary, London SW1P
3EE
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE
ATTENTION.
If you are in any doubt as to any aspect of the proposals referred
to in this document or as to the action you should take, you should
consult a stockbroker, solicitor, accountant or other appropriate
independent professional adviser.
If you have sold or transferred all your shares in HSBC Holdings
plc (the “Company”) you should at once forward this
document and all accompanying documents to the stockbroker, bank or
other agent through whom the sale or transfer was effected for
transmission to the purchaser or transferee.
Hong
Kong Exchanges and Clearing Limited and The Stock Exchange of Hong
Kong Limited take no responsibility for the contents of this
document, make no representation as to its accuracy or completeness
and expressly disclaim any liability whatsoever for any loss
howsoever arising from or in reliance upon the whole or any part of
the contents of this document. The ordinary shares of the Company
trade under stock code 5 on The Stock Exchange of Hong Kong
Limited.
A
Chinese translation of this Notice of Annual General Meeting is
available at www.hsbc.com. Alternatively, the Chinese translation
of this and future documents may be obtained by contacting the
Company’s registrar (see page 25).
Contents
2. Notice of the
2018 Annual General
Meeting
5
4. Information
about the 2018 Annual General
Meeting
21
5. General
information
25
7 March
2018
Dear
Shareholder
As your
new Group Chairman, I am particularly looking forward to welcoming
you to the HSBC Holdings plc 2018 Annual General Meeting
(“AGM”) to be held at 11.00am on Friday, 20 April at
the Queen Elizabeth II Conference Centre in central London. The
venue is easily accessible by public transport. If, however, you
are unable to attend in person, you may choose to watch the meeting
via a webcast at www.hsbc.com/agmwebcast.
I
encourage you to read the Notice of the AGM and the particulars of
the business to be considered at the meeting which are enclosed
with this letter. In addition to the standard items of business,
there are two items that I would like to specifically
highlight:
1. Directors
As well
as my own appointment as Group Chairman from 1 October last year,
2018 has seen the appointment of John Flint as your new Group Chief
Executive with effect from 21 February.
We bade
farewell to Douglas Flint in 2017 after 22 years’ service to
HSBC, with seven of those as Group Chairman. On behalf of all
shareholders, I would again like to thank Douglas for his dedicated
service to HSBC over a long and distinguished career. I would also
like to thank Stuart Gulliver who, as Group Chief Executive, led
HSBC through a challenging and difficult period with great energy
and commitment and who successfully re-shaped the business strategy
of the bank.
I would
like to extend my particular thanks on behalf of the Board to
Phillip Ameen, Joachim Faber and John Lipsky who have decided to
retire at the end of their term of office and who will not
therefore be seeking re-election at this year’s AGM. I am
incredibly grateful to each of them for their wise counsel,
valuable insights and important contributions to the Board and to
the committees on which they have served.
As is
customary, John Flint and I will stand for election for the first
time at this year’s AGM and all of the other continuing
Directors will stand for re-election. Our biographical details can
be found on pages 13 to 16. The current composition of the Board
can be found on pages 3 to 4.
At the
conclusion of this year’s AGM, subject to the election and
re-election of the Directors recommended above, your Board will
comprise a non-executive Chairman, three executive Directors and
ten independent non-executive Directors.
HSBC Holdings
plc
Incorporated
in England with limited liability. Registered in England: number
617987
Registered Office and Group Head
Office:
8 Canada Square, London E14 5HQ, United
Kingdom
2. Articles of Association
We are
proposing amendments to the Articles of Association, to align them
with current market practice and to ensure that we are positioned
to embrace technological advances to improve accessibility and
participation at our meetings. The remaining changes are mainly
administrative, further details of which can be found in Appendix 4
on pages 31 to 33.
Your Board and I consider that the proposals set out in this Notice
of the AGM are in the best interests of the Company and its
shareholders, and recommend that you vote in favour of all
resolutions. The Directors intend to do so in respect of their own
beneficial holdings.
A form
of proxy is enclosed or can be accessed at www.hsbc.com/proxy.
Whether or not you are able to attend the AGM, I encourage you to
complete and submit a form of proxy. Appointing a proxy will not
prevent you from attending the AGM and voting in person, should you
subsequently be able to attend.
Together
with the Board, I would like to thank you for your continued
support and I very much look forward to welcoming you at the
AGM.
Yours
sincerely
Mark E.
Tucker
Group
Chairman
Directors
Mark E. Tucker,
60
Non-executive
Group Chairman
Phillip Ameen,
69
Independent
non-executive Director
Kathleen Casey,
51
Independent
non-executive Director
Laura Cha, GBM, 68
Independent
non-executive Director
Henri de Castries,
63
Independent
non-executive Director
Lord Evans of Weardale,
60
Independent
non-executive Director
Joachim Faber,
67
Independent
non-executive Director
John Flint, 49
Group Chief Executive
Irene Lee, 64
Independent non-executive Director
John Lipsky, 71
Independent non-executive Director
Iain Mackay, 56
Group Finance Director
Heidi Miller, 64
Independent non-executive Director
Marc Moses, 60
Group Chief Risk Officer
David Nish, 57
Independent non-executive Director
Jonathan Symonds,
CBE, 59
Senior
independent non‑executive
Director
Jackson Tai,
67
Independent
non-executive Director
Pauline van der Meer Mohr, 58
Independent
non-executive Director
Secretary
Ben Mathews,
51
Group
Company Secretary
HSBC Holdings plc
Notice of the 2018 Annual General Meeting
Notice
is hereby given that the 2018 Annual General Meeting of HSBC
Holdings plc will be held at the Queen Elizabeth II Conference
Centre, Broad Sanctuary, London SW1P 3EE, United Kingdom at 11.00am
on Friday, 20 April 2018 to consider and, if thought fit, pass the
resolutions below. Resolutions 1 to 7, 10, 12 and 14 will be
proposed as ordinary resolutions. Resolutions 8, 9, 11, 13, 15 and
16 will be proposed as special resolutions.
1.
Annual Report & Accounts*
To
receive the Annual Accounts and Report of the Directors and of the
Auditor for the year ended 31 December 2017.
2.
Directors’ Remuneration Report*
To
approve the Directors’ Remuneration Report set out on pages
141 to 164 of the Annual Report & Accounts for the year ended
31 December 2017, excluding the Directors’ Remuneration
Policy set out on pages 143 to 144.
3.
Election and re-election of Directors*
To
elect by separate resolutions each of:
To
re-elect by separate resolutions each of:
|
(c)
|
Kathleen
Casey;
|
(i)
|
Heidi
Miller;
|
|
(d)
|
Laura
Cha;
|
(j)
|
Marc
Moses;
|
|
(e)
|
Henri
de Castries;
|
(k)
|
David
Nish;
|
|
(f)
|
Lord
Evans of Weardale;
|
(l)
|
Jonathan
Symonds;
|
|
(g)
|
Irene
Lee;
|
(m)
|
Jackson
Tai; and
|
|
(h)
|
Iain
Mackay;
|
(n)
|
Pauline
van der Meer Mohr.
|
|
4.
|
Re-appointment of Auditor*
|
|
|
|
To
re-appoint PricewaterhouseCoopers LLP as Auditor of the
Company.
|
|
5.
|
Remuneration of Auditor*
|
|
|
To
authorise the Group Audit Committee to determine the remuneration
of the Auditor.
THAT in
accordance with sections 366 and 367 of the UK Companies Act 2006
(the “Act”) the Company, and any company which is a
subsidiary of the Company at any time during the period for which
this resolution has effect, be authorised to:
(a)
make political
donations to political parties and/or independent election
candidates;
(b)
make political
donations to political organisations other than political parties;
and
(c)
incur political
expenditure,
in each
case during the period starting on the date of passing of this
Resolution 6 and expiring at the conclusion of the Annual General
Meeting of the Company to be held in 2019 or at the close of
business on 30 June 2019, whichever is earlier, provided the
aggregate amount of any such donations and expenditure shall not
exceed £200,000 during the period for which this Resolution 6
has effect. For the purposes of this resolution, the terms
‘political donations’, ‘political parties’,
‘independent election candidates’, ‘political
organisations’ and ‘political expenditure’ shall
have the meanings given to them by sections 363 to 365 of the
Act.
*
Ordinary Resolution
# Special
Resolution
7.
Authority to allot shares*
THAT
the Directors be generally and unconditionally authorised pursuant
to and for the purposes of section 551 of the UK Companies Act 2006
(the “Act”) to exercise all the powers of the Company
to allot shares in the Company and to grant rights to subscribe
for, or to convert any security into, shares in the
Company:
(a)
up to an aggregate
nominal amount of US$1,999,610,418 (such amount to be restricted to
the extent that any allotments or grants are made under paragraphs
(b) or (c) of this resolution so that in total no more than
US$3,332,684,030 can be allotted or granted under paragraphs (a)
and (b) of this resolution and no more than US$6,665,368,060 can be
allotted under paragraphs (a), (b) and (c) of this resolution);
and
(b)
up to an aggregate
nominal amount of US$3,332,684,030 (such amount to be restricted to
the extent that any allotments or grants are made under paragraphs
(a) or (c) of this resolution so that in total no more than
US$3,332,684,030 can be allotted or granted under paragraphs (a)
and (b) of this resolution and no more than US$6,665,368,060 can be
allotted under paragraphs (a), (b) and (c) of this resolution) in
connection with an offer or invitation to:
(i)
holders of ordinary
shares in proportion (as nearly as may be practicable) to the
respective number of ordinary shares held by them; and
(ii)
holders of other
securities, bonds, debentures or warrants which, in accordance with
the rights attaching thereto, are entitled to participate in such
an offer or invitation or as the Directors consider
necessary,
but in
each case subject to such exclusions or other arrangements as the
Directors may deem necessary or expedient in relation to record
dates, fractional entitlements, treasury shares or securities
represented by depositary receipts or having regard to any
restrictions, obligations, practical or legal problems under the
laws of or the requirements of any regulatory body or stock
exchange in any territory or otherwise howsoever; and
(c)
comprising equity
securities (as defined in section 560 of the Act) up to an
aggregate nominal amount of US$6,665,368,060 (such amount to be
restricted to the extent that any allotments or grants are made
under paragraphs (a) or (b) of this resolution so that in total no
more than US$6,665,368,060 can be allotted under paragraphs (a),
(b) and (c) of this resolution) in connection with a rights issue
to:
(i)
holders of ordinary
shares in proportion (as nearly as may be practicable) to the
respective number of ordinary shares held by them; and
(ii)
holders of other
securities, bonds, debentures or warrants which, in accordance with
the rights attaching thereto, are entitled to participate in such
an issue or as the Directors consider necessary,
but in
each case subject to such exclusions or other arrangements as the
Directors may deem necessary or expedient in relation to record
dates, fractional entitlements, treasury shares or securities
represented by depositary receipts or having regard to any
restrictions, obligations, practical or legal problems under the
laws of or the requirements of any regulatory body or stock
exchange in any territory or otherwise howsoever; and
(d)
up to an aggregate
nominal amount of £150,000 (in the form of 15,000,000
non-cumulative preference shares of £0.01 each),
€150,000 (in the form of 15,000,000 non-cumulative preference
shares of €0.01 each) and US$150,000 (in the form of
15,000,000 non-cumulative preference shares of US$0.01
each),
provided
that such authority shall expire at the conclusion of the Annual
General Meeting of the Company to be held in 2019 or at the close
of business on 30 June 2019, whichever is the earlier, save that
this authority shall allow the Company before the expiry of this
authority to make offers, and enter into agreements, which would or
might require shares to be allotted or rights to subscribe for, or
to convert any security into, shares to be granted after the
authority expires and the Directors may allot shares or grant
rights to subscribe for, or to convert any security into, shares
(as the case may be) in pursuance of such offers or agreements as
if the authority conferred hereby had not expired.
*
Ordinary Resolution
# Special
Resolution
8.
Disapplication of pre-emption rights#
THAT if
Resolution 7 set out in the Notice convening this meeting is
passed, the Directors be authorised to allot equity securities (as
defined in the UK Companies Act 2006 (the “Act”)) for
cash under the authority given by Resolution 7 and/or to sell
shares held by the Company as treasury shares for cash as if
section 561(1) of the Act did not apply to any such allotment or
sale, such authority to be limited:
(a)
to the allotment of
equity securities or sale of treasury shares for cash in connection
with any rights issue, or other offer or invitation (but in the
case of the authority granted under paragraph (c) of Resolution 7,
by way of a rights issue only) to:
(i)
holders of ordinary
shares in proportion (as nearly as may be practicable) to the
respective number of ordinary shares held by them; and
(ii)
holders of other
securities, bonds, debentures or warrants which, in accordance with
the rights attaching thereto, are entitled to participate in such
an issue, offer or invitation or as the Directors consider
necessary,
but in
each case subject to such exclusions or other arrangements as the
Directors may deem necessary or expedient in relation to record
dates, fractional entitlements, treasury shares or securities
represented by depositary receipts or having regard to any
restrictions, obligations, practical or legal problems under the
laws of or the requirements of any regulatory body or stock
exchange in any territory or otherwise howsoever; and
(b)
to the allotment of
equity securities or sale of treasury shares (otherwise than under
paragraph (a) above) up to an aggregate nominal amount of
US$499,902,604,
provided
that such authority shall expire at the conclusion of the Annual
General Meeting of the Company to be held in 2019 or at the close
of business on 30 June 2019, whichever is the earlier, save that
this authority shall allow the Company before expiry of this
authority to make offers, and enter into agreements, which would or
might require equity securities to be allotted (or treasury shares
to be sold) after the authority expires and the Directors may allot
equity securities (or sell treasury shares) under any such offer or
agreement as if the authority had not expired.
9.
Further disapplication of pre-emption rights for acquisitions
etc.#
THAT if
Resolution 7 set out in the Notice convening this meeting is
passed, the Directors be authorised (in addition to any authority
granted under Resolution 8 set out in the Notice convening this
meeting) to allot equity securities (as defined in the UK Companies
Act 2006 (the “Act”)) for cash under the authority
given by Resolution 7 and/or to sell shares held by the Company as
treasury shares for cash as if section 561(1) of the Act did not
apply to any such allotment or sale, such authority to
be:
(a) limited to the allotment of equity securities or
sale of treasury shares up to a nominal amount of US$499,902,604;
and
(b)
used only for the
purposes of financing (or refinancing, if the authority is to be
used within six months after the original transaction) a
transaction which the Directors determine to be an acquisition or
other capital investment of a kind contemplated by the Statement of
Principles on Disapplying Pre- Emption Rights most recently
published by the Pre-Emption Group prior to the date of the Notice
convening this meeting,
provided
that such authority shall expire at the conclusion of the Annual
General Meeting of the Company to be held in 2019 or at the close
of business on 30 June 2019, whichever is the earlier, save that
this authority shall allow the Company before expiry of this
authority to make offers, and enter into agreements, which would or
might require equity securities to be allotted (or treasury shares
to be sold) after the authority expires and the Directors may allot
equity securities (or sell treasury shares) under any such offer or
agreement as if the authority had not expired.
10. Addition of any repurchased shares to general authority to
allot shares*
THAT
the authority granted to the Directors to allot shares or grant
rights to subscribe for, or convert any security into, shares in
the Company pursuant to paragraph (a) of Resolution 7 set out in
the Notice convening this meeting be extended by the addition of
such number of ordinary shares of US$0.50 each representing the
nominal amount of the Company’s share capital repurchased by
the Company under the authority granted pursuant to Resolution 11
set out in the Notice convening this meeting, to the extent that
such extension would not result in any increase
*
Ordinary Resolution
# Special
Resolution
in the
authority to allot shares or grant rights to subscribe for or
convert securities into shares pursuant to paragraphs (b) and (c)
of Resolution 7 set out in the Notice convening this
meeting.
11. Purchases of
Ordinary Shares by the Company#
THAT
the Company be and is hereby generally and unconditionally
authorised for the purposes of section 701 of the UK Companies Act
2006 (the “Act”) to make market purchases (within the
meaning of section 693 of the Act) of Ordinary Shares of US$0.50
each (“Ordinary Shares”) and on such terms and in such
manner as the Directors shall from time to time determine provided
that:
(a)
the maximum
aggregate number of Ordinary Shares hereby authorised to be
purchased is 1,999,610,418 Ordinary Shares;
(b)
the minimum price
(exclusive of expenses) which may be paid for each Ordinary Share
is US$0.50 or the equivalent in the relevant currency in which the
purchase is effected calculated by reference to the spot rate of
exchange for the purchase of United States dollars with such other
currency as quoted by HSBC Bank plc in the London Foreign Exchange
Market at or about 11.00am (London time) on the business day (being
a day on which banks are ordinarily open for the transaction of
normal banking business in London) prior to the date on which the
Ordinary Share is contracted to be purchased, in each case such
rate to be the rate as conclusively certified by an officer of HSBC
Bank plc;
(c)
the maximum price
(exclusive of expenses) which may be paid for each Ordinary Share
is the lower of (i) 105 per cent of the average of the middle
market quotations for the Ordinary Shares (as derived from the
Daily Official List of the London Stock Exchange plc) for the five
dealing days immediately preceding the day on which the Ordinary
Share is contracted to be purchased, or (ii) 105 per cent of the
average of the closing prices of the Ordinary Shares on The Stock
Exchange of Hong Kong Limited for the five dealing days immediately
preceding the day on which the Ordinary Share is contracted to be
purchased, in each case converted (where relevant) into the
relevant currency in which the purchase is effected calculated by
reference to the spot rate of exchange for the purchase of such
currency with the currency in which the quotation and/or price is
given as quoted by HSBC Bank plc in the London Foreign Exchange
Market at or about 11.00am (London time) on the business day prior
to the date on which the Ordinary Share is contracted to be
purchased, in each case such rate to be the rate as conclusively
certified by an officer of HSBC Bank plc;
(d)
unless previously
revoked or varied this authority shall expire at the conclusion of
the Annual General Meeting of the Company to be held in 2019 or at
the close of business on 30 June 2019, whichever is the earlier;
and
(e)
the Company may
prior to the expiry of this authority make a contract or contracts
to purchase Ordinary Shares under this authority which will or may
be completed or executed wholly or partly after such expiry and may
make a purchase of Ordinary Shares pursuant to any such contract or
contracts as if the authority conferred hereby had not
expired.
12.
Additional authority to allot equity securities in relation to the
issue of Contingent Convertible Securities*
THAT in
addition to any authority granted pursuant to Resolution 7 set out
in the Notice convening this meeting, the Directors be generally
and unconditionally authorised under and for the purposes of
section 551 of the UK Companies Act 2006 (the “Act”) to
exercise all the powers of the Company to allot shares in the
Company and to grant rights to subscribe for, or to convert any
security into, shares in the Company up to an aggregate nominal
amount of US$1,999,610,418 in relation to any issue by the Company
or any member of the Group of Contingent Convertible Securities
(“CCSs”) that automatically convert into or are
exchanged for ordinary shares in the Company in prescribed
circumstances where the Directors consider such an issue of CCSs
would be desirable in connection with, or for the purposes of,
complying with or maintaining compliance with regulatory capital
requirements or targets applicable to the Group from time to time
and otherwise on terms as may be determined by the Directors,
provided that such authority shall expire at the conclusion of the
Annual General Meeting of the Company to be held in 2019 or at the
close of business on 30 June 2019, whichever is the earlier, save
that this authority shall allow the Company before the expiry of
this authority to make offers, and enter into agreements, which
would or might require shares to be allotted or rights to subscribe
for, or to convert any security into, shares to be granted after
the authority expires and the Directors may allot shares or grant
rights to subscribe for, or to convert any security into, shares
(as the case may be) in pursuance of such offers or agreements as
if the authority conferred hereby had not expired.
*
Ordinary Resolution
# Special
Resolution
13.
Limited disapplication of pre-emption rights in relation to the
issue of Contingent Convertible Securities#
THAT if
Resolution 12 set out in the Notice convening this meeting is
passed, the Directors be authorised (in addition to any authority
granted under Resolutions 8 and 9 set out in the Notice convening
this meeting) to allot equity securities (as defined in the UK
Companies Act 2006 (the “Act”)) for cash under the
authority given by Resolution 12 and/or to sell shares held by the
Company as treasury shares for cash as if section 561(1) of the Act
did not apply to any such allotment or sale, provided that such
authority shall expire at the conclusion of the Annual General
Meeting of the Company to be held in 2019 or at the close of
business on 30 June 2019, whichever is the earlier, save that this
authority shall allow the Company before expiry of this authority
to make offers, and enter into agreements, which would or might
require equity securities to be allotted (or treasury shares to be
sold) after the authority expires and the Directors may allot
equity securities (or sell treasury shares) under any such offer or
agreement as if the authority had not expired.
14. Renewal of scrip dividend authority*
THAT
the Directors be and are hereby empowered to exercise the powers
conferred upon them by Article 157.1 of the Articles of Association
of the Company or, if Resolution 15 set out in the Notice convening
this meeting is passed, Article 155.1 of the Articles of
Association of the Company (as from time to time varied) so that,
to the extent and in the manner determined by the Directors, the
holders of Ordinary Shares of US$0.50 each (“Ordinary
Shares”) be permitted to elect to receive Ordinary Shares
instead of all or part of any dividend (including interim
dividends) declared up to the conclusion of the Annual General
Meeting of the Company to be held in 2019.
15. Amendment to the
Articles of Association#
THAT,
with effect from the conclusion of the Annual General Meeting, the
Articles of Association produced to the meeting, and initialled for
the purpose of identification by the Chairman, be and are hereby
adopted as the Articles of Association of the Company, in
substitution for, and to the exclusion of, the existing Articles of
Association.
16. Notice of general
meetings#
THAT
the Company hereby approves general meetings (other than annual
general meetings) being called on a minimum of 14 clear days’
notice.
By
order of the Board
B J S
Mathews
7 March
2018
Group
Company Secretary
*
Ordinary Resolution
# Special
Resolution
HSBC Holdings plc
Incorporated in
England with limited liability. Registered in England: number
617987 Registered Office and Group Head Office:
8
Canada Square, London E14 5HQ, United Kingdom
Explanatory notes
Information
about the business to be considered at the 2018 Annual General
Meeting (“AGM”) is set out below.
These
explanatory notes should be read in conjunction with the Annual
Report & Accounts in respect of the year ended 31 December
2017. This Notice of AGM, the Annual Report & Accounts and the
Strategic Report are available at www.hsbc.com.
For the
purpose of this Notice, the issued share capital (excluding
treasury shares) of the Company on 20 February 2018, being the
latest practicable date prior to the printing of this document, was
19,996,104,179 Ordinary Shares of US$0.50 each.
1.
Annual Report & Accounts
The
purpose of this item is for shareholders to receive and consider
the Annual Accounts and the Reports of the Directors and of the
Auditor for the year ended 31 December 2017.
2.
Directors’ Remuneration Report
The
purpose of this item is to seek shareholder approval of the
Directors’ Remuneration Report for the year ended 31 December
2017 (other than the part containing the Directors’
Remuneration Policy on pages 143 to 144 of the Annual Report &
Accounts). The Directors’ Remuneration Report is on pages 141
to 164 of the Annual Report & Accounts. The actual remuneration
paid to Directors in 2017 was made within the boundaries of the
Directors’ Remuneration Policy approved by shareholders at
the 2016 Annual General Meeting. The vote on the Directors’
Remuneration Report is advisory in nature and cannot impact what is
paid under the shareholder-approved Policy.
3.
Election and re-election of Directors
The
Board has concluded that all of the non-executive Directors
standing for election or re-election at the AGM are independent in
character and judgement.
When
considering independence, the Board calculates the length of
service of a non-executive Director by reference to the date of his
or her election by shareholders following their appointment. The
Board has determined that there are no relationships or
circumstances which are likely to affect the judgement of any of
the non-executive Directors. Any relationships or circumstances
which could appear to do so are not considered to be material. Each
of the Directors standing for election or re-election has confirmed
that they have no material relationship with another Director, a
member of senior management or any substantial or controlling
shareholder of HSBC Holdings plc.
Election of new Directors
Mark
Tucker and John Flint will offer themselves for election as
Directors, having been appointed to the Board on 1 September 2017
and 21 February 2018, respectively. Mark Tucker, who assumed the
role of non-executive Group Chairman on 1 October 2017, was
determined by the Board to be independent upon his appointment to
the Board. John Flint, formerly Chief Executive Officer of the
Group’s Retail Banking and Wealth Management business, was
announced as the successor to Stuart Gulliver, Group Chief
Executive, who stepped down from his role on 20 February 2018,
following the announcement of the Company’s 2017 financial
results.
Re-election of Directors
The
Board, both prior to a Director’s appointment and when
nominating a Director for re-election enquires, and obtains
assurance, that each Director is, or will be, capable of
contributing the time both expected of them and unanticipated,
should additional demands be placed on them in relation to HSBC and
in relation to their other commitments.
The
Board has considered carefully the directorships held by the
Directors and has applied the same standard of enquiry for each of
them. Our focus as a Group is in determining the ability of each
Director to commit and to ensure that they have sufficient time to
fulfil their individual obligations, rather than a strict adherence
to a numeric count of directorships. In addition, individual
performance evaluations and assessment of contributions to Board
discussion have been undertaken which have confirmed that all of
the Directors are performing effectively and demonstrate commitment
to their roles, with each of the Directors being fully able to
discharge his or her duties.
The
Board notes the following in relation to two of the Directors
seeking re-election:
Irene Lee
The
Board has given very careful consideration to the concerns
registered by some shareholders in connection with the proposed
re-election of Irene Lee at the 2017 Annual General Meeting due to
her external commitments.
Irene
Lee is a highly-valued and experienced Director with specific
geographic and commercial experience which is of particular
relevance to the delivery of the Group’s strategy. The Board
attaches great importance to the contribution that Ms Lee makes to
HSBC and, following very constructive discussions with her led by
the Group Chairman, the Board believes that she is and remains
resolutely committed to her role. In relation to her executive
accountabilities as Chairman of Hysan Development Company Limited,
Ms Lee has delegated day to day operational responsibility to her
executive team. Since the 2017 Annual General Meeting, Ms Lee has
stepped down from one of her external directorships which has given
her greater time to focus on HSBC and her related HSBC
responsibilities, including the subsidiary boards of The Hongkong
and Shanghai Banking Corporation Limited and Hang Seng Bank Limited
on which she serves. Furthermore, it is also Ms Lee’s
intention to step down from one of her other external directorships
at the conclusion of her term in office in May 2018. By that time,
HSBC will have become her single most significant external,
non-executive commitment, thereby reinforcing the focus of
attention and importance she attaches to her role with
HSBC.
The
Board is extremely supportive of Ms Lee and is very grateful for
the continued commitment that she has shown. It unreservedly
endorses her re-election and strongly encourages shareholders to
support her re-election.
Laura Cha
Laura
Cha is a non-executive Director with considerable geographic
expertise and experience and a deep-rooted knowledge and
understanding of Asian business and culture. The breadth and
diversity of her experience makes her an invaluable member of, and
an active contributor to, the Board.
In
addition to her principal directorship with the Company and its
subsidiary, The Hongkong and Shanghai Banking Corporation Limited,
Ms Cha has a number of external public and private interests. From
April 2018, she will be joining the board of Hong Kong Exchanges
and Clearing Limited as a non-executive Director. In order to
ensure that she is best placed to continue making a valuable and
active contribution to her role with HSBC, Ms Cha has reviewed her
current external commitments. She stepped down from her role as a
Hong Kong Delegate to the 12th National People’s Congress of
China and from her membership of the London Stock Exchange
Regulatory Advisory Group. Additionally, she will be resigning from
one of her other external directorships at the conclusion of her
term in office in May 2018. HSBC will therefore continue to be a
significant external, non-executive commitment for Ms Cha and the
Board is grateful for the consideration that she has shown in
ensuring that she is able to commit sufficient time to her role and
the importance that she clearly attaches to it.
The
Board fully endorses the recommendation for her
re-election.
Based upon the review undertaken, the Board has satisfied itself
that each of the Directors is fully able to discharge his or her
duties to the Company and that they each have sufficient capacity
to meet their commitments to the Company. The Board has therefore
concluded that all of the Directors except, as previously
announced, Phillip Ameen, Joachim Faber and John Lipsky, should
offer themselves for election and re-election in accordance with
the Group’s regular practice.
Non-executive Directors’ fees
With
the exception of the non-executive Group Chairman who receives a
fee of £1.5 million per annum, each non-executive Director
receives a fee of £110,000 per annum in accordance with the
Directors’ Remuneration Policy approved by shareholders at
the 2016 Annual General Meeting. The fees paid to non-executive
Directors who are standing for election/re-election as members of
Board committees are set out below (these and Board fees are
pro-rated for part year service where relevant):
|
Committee*
|
Fees
(per annum)
|
Committee
members standing for
|
|
|
|
|
|
election/re-election
|
|
|
|
|
|
|
|
|
|
Chairman
|
Member
|
|
|
|
|
|
|
|
|
|
Group
Audit Committee
|
£60,000
|
£30,000
|
Jonathan Symonds
(Chairman), Kathleen
|
|
|
Casey,
David Nish
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group
Risk Committee
|
£60,000
|
£30,000
|
Jackson
Tai (Chairman), Heidi Miller
|
|
|
|
|
|
|
|
|
Group
Remuneration Committee
|
£60,000
|
£30,000
|
Pauline
van der Meer Mohr (Chairman), Henri
|
|
|
de
Castries, David Nish
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial System
Vulnerabilities
|
£60,000
|
£30,000
|
Lord
Evans of Weardale (Chairman), Kathleen
|
|
|
Committee
|
Casey,
Jackson Tai
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pauline
van der Meer Mohr (Chairman), Laura
|
|
|
Conduct
& Values Committee
|
£60,000
|
£30,000
|
Cha,
Lord Evans of Weardale, Jonathan
|
|
|
|
|
|
Symonds
|
|
|
Nomination
Committee
|
£40,000
|
£25,000
|
Mark
Tucker (Chairman), Laura Cha, Jonathan
|
|
|
Symonds, Pauline
van der Meer Mohr
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philanthropic &
Community
|
£25,000
|
£15,000
|
Laura
Cha (Chairman), Lord Evans of
|
|
|
Investment
Oversight Committee
|
Weardale
|
|
|
|
|
|
|
|
|
|
|
|
*
For further details
of the roles and accountabilities of each of these Board
committees, see pages 128 to 134 of the Annual Report &
Accounts.
Laura
Cha, as a non-executive Director, Deputy Chairman and a member of
the Nomination Committee of The Hongkong and Shanghai Banking
Corporation Limited, receives fees in those capacities of
HK$550,000, HK$125,000, HK$75,000 respectively per annum. These
fees were authorised by the shareholders of The Hongkong and
Shanghai Banking Corporation Limited.
Irene
Lee, as a non-executive Director, a member of the Audit Committee
and a member of the Risk Committee of The Hongkong and Shanghai
Banking Corporation Limited, receives fees of HK$550,000,
HK$200,000 and HK$200,000 respectively per annum. In addition, as a
non-executive Director, Chairman of the Risk Committee and member
of the Audit Committee of Hang Seng Bank Limited, she receives fees
of HK$ 500,000, HK$260,000 and HK$160,000 respectively per annum.
These fees were authorised by shareholders and the Board of The
Hongkong and Shanghai Banking Corporation Limited and Hang Seng
Bank Limited respectively.
Heidi
Miller receives a separate fee of US$550,000 per annum as
non-executive Chairman of HSBC North America Holdings Inc. This fee
was approved by the Group Remuneration Committee of HSBC Holdings
plc on 5 November 2015 and authorised by the Board of HSBC North
America Holdings Inc.
Jonathan
Symonds receives a separate fee of £400,000 per annum as non-
executive Chairman of HSBC Bank plc. This fee was approved by the
Group Remuneration Committee of HSBC Holdings plc on 25 May
2017.
Each
non-executive Director, not based in the UK, receives a travel
allowance of £4,000 per annum.
Non-executive Directors’ terms of appointment
Non-executive
Directors do not have service contracts with HSBC Holdings plc.
Subject to their election or re-election by shareholders, the terms
of appointment of the non-executive Directors standing for election
or re-election will expire as follows: Henri de Castries, Irene Lee
and Pauline van der Meer Mohr – 2019; Mark Tucker, Kathleen
Casey, Laura Cha, Lord Evans of Weardale, David Nish, Jonathan
Symonds and Jackson Tai – 2020; and Heidi Miller –
2021.
Executive Directors’ service contracts and
remuneration
The
executive Directors have rolling service contracts with a notice
period of 12 months for either party. The dates of the service
contracts are:
John
Flint
21 February
2018
Iain
Mackay
4 February
2011
Marc
Moses
27 November
2014
Under
the terms of their employment: John Flint, Iain Mackay and Marc
Moses each receive fixed pay consisting of base salary, cash in
lieu of pension and fixed pay allowance and are eligible to receive
discretionary variable pay awards. The base salaries paid to John
Flint, Iain Mackay and Marc Moses are £1,200,000,
£700,000 and £700,000 per annum respectively. The cash in
lieu of pension paid to John Flint, Iain Mackay and Marc Moses are
£360,000, £210,000 and £210,000 per annum
respectively. Fixed pay allowances are delivered in shares in four
equal instalments and the shares (net of shares sold to cover any
income tax and social security) will be subject to a retention
period. Shares will be released annually on a pro rata basis over
five years starting from the March immediately following the end of
the financial year in respect of which the shares are granted. The
fixed pay allowances paid to John Flint, Iain Mackay and Marc Moses
are £1,700,000, £950,000 and £950,000 per annum
respectively.
Further
details of the Directors’ emoluments are set out in the
Directors’ Remuneration Report contained in the Annual Report
& Accounts on pages 144 to 164.
The
Directors at the date of this document are: Phillip Ameen†,
Kathleen Casey†, Laura Cha†, Henri de Castries†,
Lord Evans of Weardale†, Joachim Faber†, John Flint,
Irene Lee†, John Lipsky†, Iain Mackay, Heidi
Miller†, Marc Moses, David Nish†, Jonathan
Symonds†, Jackson Tai†, Mark Tucker* and Pauline van
der Meer Mohr†.
*
Non-executive Group Chairman
†
Independent non-executive Director
Biographical details
Brief
biographical details of each of the Directors standing for election
and re-election are set out below.
Mark Tucker*, 60
Non-executive Group
Chairman
Appointed to the
Board: September 2017, Non-executive Group Chairman since October
2017
Chairman
of the Nomination Committee
Skills and Experience: Mark has extensive experience in the
financial services industry in Asia and the UK. Most recently he was Group Chief
Executive and President of AIA Group Limited (“AIA”).
Before joining AIA, Mark was Group Chief Executive of Prudential
plc and the founding Chief Executive of Prudential Corporation Asia
Limited. Mark also previously served as a non-executive director of
the Court of The Bank of England, as an independent non-executive
director of the Goldman Sachs Group and as Group Finance Director
of HBOS plc.
Current appointments include: Serves on the Asia Business
Council and the Advisory Board of the Asia Global Institute.
John Flint, 49
Group
Chief Executive
Appointed to the
Board: February 2018
Skills and Experience: John joined HSBC in 1989 and became a
Group Managing Director in 2013. Former appointments include: a director
of HSBC Private Banking Holdings (Suisse) SA, a director of HSBC
Bank Canada, Chief of Staff to the Group Chief Executive and Group
Head of Strategy and Planning, Chief Executive Officer HSBC Global
Asset Management, Group Treasurer and Deputy Head of Global
Markets. John was Chief Executive Officer of Retail Banking and
Wealth Management until January 2018. John was appointed as a
director of The Hongkong and Shanghai Banking Corporation Limited
on 16 January 2018 and as the Chairman of the Board with effect
from 21 February 2018 in succession to Stuart Gulliver, who stepped
down as a Director and the Chairman of the Board on 20 February
2018. He took over from Stuart Gulliver as Group Chief Executive on
21 February 2018.
Kathleen Casey†, 51
Appointed to the
Board: March 2014
Member
of the Group Audit Committee and the Financial System
Vulnerabilities Committee
Skills and Experience: Kathleen has extensive financial
regulatory policy experience. She is a former Commissioner of the US Securities
and Exchange Commission, and acted as its principal representative
in multilateral and bilateral regulatory dialogues with the G-20
Financial Stability Board and the International Organisation of
Securities Commissions. Other former appointments include Staff
Director and Counsel to the United States Senate Committee on
Banking, Housing, and Urban Affairs; Chair of the Alternative
Investment Management Association; and Legislative Director and
Chief of Staff for a US Senator.
Current appointments include: Senior adviser to Patomak
Global Partners and to a number of public bodies in the US, and a member of the Board
of Trustees of the Financial Accounting Foundation.
Laura Cha†, GBM, 68
Appointed to the
Board: March 2011
Chairman
of the Philanthropic & Community Investment Oversight Committee
and a member of the Conduct & Values Committee and the
Nomination Committee
Skills and Experience: Laura has extensive regulatory and
policy making experience in the finance and securities sector in Hong Kong and mainland
China. She is the former Vice Chairman of the China Securities
Regulatory Commission. Other former appointments include serving as
a non-executive director of Bank of Communications Co., Limited,
and Tata Consultancy Services Limited. She also served as Deputy
Chairman of the Securities and Futures Commission in Hong
Kong.
Current appointments include: A non-executive Deputy
Chairman of The Hongkong and Shanghai Banking Corporation Limited, Chairman of
Hong Kong’s Financial Services Development Council and a
non-executive director of China Telecom Corporation Limited,
Unilever PLC and Unilever N.V.
Henri de Castries†, 63
Appointed to the
Board: March 2016
Member
of the Group Remuneration Committee
Skills and Experience: Henri has more than 25 years
international experience in the financial services
industry. He joined AXA
in 1989 holding a number of senior roles, ultimately as Chairman
and Chief Executive Officer of AXA SA until 1 September
2016.
Current appointments include: Chairman of Europe and Special
Adviser of General Atlantic, Chairman of Institut Montaigne, a French
think-tank; the lead independent director of Nestlé S.A. and a
non-executive director of the French National Foundation for
Political Science.
Lord Evans of Weardale†,
60
Appointed to the
Board: August 2013
Chairman
of the Financial System Vulnerabilities Committee and a member of
the Conduct & Values Committee and the Philanthropic &
Community Investment Oversight Committee
Skills and Experience: Jonathan has 30 years of experience
in national security policy and operations. He was formerly Director General of the
UK‘s Security Service (MI5) and had oversight of the Joint
Terrorist Analysis Centre and the Centre for the Protection of
National Infrastructure, and attended the National Security
Council.
Current appointments include: A non-executive director of
Ark Data Centres and an adviser to various cybersecurity and technology
companies.
Irene Lee†, 64
Appointed to the
Board: July 2015
Skills and Experience: Irene has more than 40 years’
finance industry experience, having held senior
investment banking and
fund management positions in the UK, the US and Australia,
including positions at Citibank and the Commonwealth Bank of
Australia. Other former appointments include serving as a member of
the Advisory Council of J.P. Morgan Australia and the Australian
Takeovers Panel.
Current appointments include: Executive Chairman of Hysan
Development Company Limited and a non-executive director of The
Hongkong and Shanghai Banking Corporation Limited, Hang Seng Bank
Limited, Cathay Pacific Airways Limited and CLP Holdings
Limited.
Iain Mackay, 56
Group
Finance Director
Appointed to the
Board: December 2010
Skills and Experience: Iain has extensive financial and
international experience, having worked in London,
Paris, the US, Africa
and Asia. He joined HSBC in 2007 as Chief Financial Officer of HSBC
North America Holdings Inc. Other former appointments include
director of Hang Seng Bank Limited and Chief Financial Officer,
HSBC Asia-Pacific. Before joining HSBC, Iain worked at General
Electric (‘GE’), serving as Controller of its Global
Consumer Finance Unit, Chief Financial Officer of GE Consumer
Finance Americas, and Chief Financial Officer of GE Healthcare
– Global Diagnostic Imaging. Iain is a member of the
Institute of Chartered Accountants of Scotland.
Current appointments include: Member of the Board of
Trustees of the British Heart Foundation and Chairman of its audit and risk committee.
Iain is also an Independent Member of the Court of the University
of Aberdeen.
Heidi Miller†, 64
Appointed to the
Board: September 2014
Member
of the Group Risk Committee
Skills and Experience: Heidi is a former President of
International at JP Morgan Chase, and was responsible
for leading the global
expansion and the international business strategy across its
investment bank, asset management, and treasury and securities
services divisions. She was also a non-executive director of Merck
& Co., Inc. and Progressive Corp.; Executive Vice President and
Chief Financial Officer of Bank One Corporation; Senior Executive
Vice President of Priceline.com Inc.; and Executive Vice President
and Chief Financial Officer of Citigroup Inc.
Current appointments include: Chairman of HSBC North
American Holdings Inc., a non-executive director of First Data Corporation and General
Mills Inc., and an advisory director of SRS Acquiom
LLC.
Marc Moses, 60
Group
Chief Risk Officer
Appointed to the
Board: January 2014
Skills and Experience: Marc joined HSBC in 2005 as Chief
Financial and Risk Officer for Global Banking and Markets, and in December 2010
became Group Chief Risk Officer. He has extensive risk management
and financial experience. Marc is a Fellow of the Institute of
Chartered Accountants in England and Wales. He was European Chief
Financial Officer at J.P. Morgan and an audit partner at Price
Waterhouse.
David Nish†, 57
Appointed to the
Board: May 2016
Member
of the Group Audit Committee and Group Remuneration
Committee
Skills and Experience: David served as Chief Executive
Officer of Standard Life plc between 2010 and 2015, having joined as Finance Director
in 2006. Other former appointments include non-executive director
of the UK Green Investment Bank plc, Group Finance Director of
Scottish Power plc, non-executive director of HDFC Life (India) and
partner of Price Waterhouse. He is a qualified chartered
accountant.
Current appointments include: A non-executive director of
Vodafone plc, London Stock Exchange Group plc and Zurich Insurance
Group.
Jonathan Symonds†, CBE,
59
Appointed to the
Board: April 2014. Senior Independent Director since April
2017
Chairman
of the Group Audit Committee and a member of the Nomination
Committee and the Conduct & Values Committee
Skills and Experience: Jonathan is a former Chief Financial
Officer of Novartis AG and AstraZeneca plc. He was also a partner and Managing
Director of Goldman Sachs, a partner of KPMG, and a non-executive
director and chair of the Audit Committee of Diageo plc. He is a
Fellow of the Institute of Chartered Accountants in England and
Wales.
Current appointments include: Chairman of HSBC Bank plc and
Proteus Digital Health Inc., and a non-executive director of Genomics England
Limited.
Jackson Tai†, 67
Appointed to the
Board: September 2016
Chairman
of the Group Risk Committee and member of the Financial System
Vulnerabilities Committee
Skills and Experience: Jackson was formerly Vice Chairman
and Chief Executive of DBS Group and DBS Bank Ltd, having served the group as
Chief Financial Officer and then as President and Chief Operating
Officer. He previously worked at J.P. Morgan & Co. Incorporated
as an investment banker in New York, Tokyo and San Francisco. Other
former appointments include non-executive director of Bank of China
Limited, Singapore Airlines, NYSE Euronext, ING Groep N.V.,
CapitaLand Ltd, SingTel Ltd. and Jones Lang LaSalle Inc. Jackson
also served as Vice Chairman of Islamic Bank of Asia.
Current appointments include: Non-executive director of Eli
Lilly and Company, Koninklijke Philips Electronics N.V., Mastercard Incorporated and
the Canada Pension Plan Investment Board.
Pauline van der Meer Mohr†,
58
Appointed to the
Board: September 2015
Chairman
of the Group Remuneration Committee and the Conduct & Values
Committee and member of the Group Nomination Committee
Skills and Experience: Pauline has extensive legal and human
resources experience across a number of different sectors, and contributed
to the Dutch Banking Code Monitoring Commission. Former
appointments include President of Erasmus University Rotterdam;
Senior Executive Vice President and Head of Group Human Resources
at ABN AMRO Bank NV; Group Human Resources Director at TNT NV; HR
Director, Information Technology, Royal Dutch Shell Group; and
Senior Legal Counsel, Shell International.
Current appointments include: Chair of the supervisory board
of EY Netherlands and member of the supervisory boards of ASML Holding N.V. and
Royal DSM N.V.
*
Non-executive Group Chairman
†
Independent non-executive Director
Save as
disclosed above and in Appendix 3 there are no further matters or
particulars required to be disclosed pursuant to Rule 13.51(2) of
the Rules Governing the Listing of Securities on The Stock Exchange
of Hong Kong Limited (“Hong Kong Listing
Rules”).
4 and 5. Re-appointment of Auditor and remuneration of
Auditor
The
current appointment of PricewaterhouseCoopers LLP
(“PwC”) as Auditor of the Company terminates at the
conclusion of this year’s AGM. PwC has expressed its
willingness to continue in office. The Group Audit Committee and
the Board have recommended that PwC be re-appointed until the
conclusion of the 2019 Annual General Meeting and that the Group
Audit Committee be authorised to determine its
remuneration.
An
analysis of the remuneration paid in respect of audit and non-audit
services provided by our Auditor and their affiliates for each of
the past three years is disclosed on page 203 in the Annual Report
& Accounts.
6. Political Donations
The UK
Companies Act 2006 (the “Act”) requires companies to
obtain shareholder authority for donations to registered political
parties and other political organisations, totalling more than
£5,000 in any 12 month period and for any political
expenditure, subject to limited exceptions.
In
accordance with Group policy, HSBC does not make any political
donations or incur political expenditure within the ordinary
meaning of those words. We have no intention of altering this
policy. However, the definitions of political donations, political
parties, political organisations and political expenditure used in
the Act are very wide. As a result, they may cover routine
activities that form part of the normal business activities of the
Group and are an accepted part of engaging with stakeholders to
ensure that issues and concerns which affect the Group’s
operations are considered and addressed, but which would not be
considered as political donations or political expenditure in the
ordinary sense of those words. Activities including contributions
to or support for bodies such as those concerned with policy review
and law reform or with the representation of the business community
or sections of it may be deemed to be political donations or
expenditure as defined by the Act. The activities referred to above
are not designed to influence public support for any political
party or political outcome. The authority is being sought on a
precautionary basis only to ensure that neither the Company nor any
of its subsidiaries inadvertently breaches the Act. Resolution 6
proposes an aggregate overall cap of £200,000 per annum for
all such political donations and expenditure.
If
Resolution 6 is passed, this authority will be effective until the
conclusion of the 2019 Annual General Meeting or the close of
business on 30 June 2019, whichever is the earlier.
7. Authority to allot shares
This
year, the Directors are again seeking authority under section 551
of the Act to allot shares up to an aggregate total nominal amount
of two-thirds of the Company’s issued ordinary share capital
subject to the restrictions set out in Resolution 7 and explained
below. The authority given to the Directors at the 2017 Annual
General Meeting will expire at the conclusion of the 2018 Annual
General Meeting. Resolution 7 will give the Directors authority to
allot new ordinary shares (or rights to ordinary shares) of up to
an aggregate nominal amount of US$6,665,368,060, representing
two-thirds of the Company’s issued ordinary share capital.
However, that authority is limited as follows:
(a)
under paragraph (a)
of Resolution 7, up to an aggregate nominal amount of
US$1,999,610,418, representing approximately 20 per cent of the
Company’s issued ordinary share capital, may be used for
general allotments;
(b)
under paragraph (b)
of Resolution 7, the Directors would have authority to make
allotments which exceed the 20 per cent authority in paragraph (a)
of Resolution 7 in connection with a pre-emptive offering such as a
rights issue, open offer or a scrip dividend up to an aggregate
nominal amount, when combined with allotments made under paragraph
(a), of US$3,332,684,030. This represents approximately one-third
of the issued ordinary share capital of the Company;
and
(c)
under paragraph (c)
of Resolution 7, the Directors would have authority to allot up to
an aggregate nominal amount of US$6,665,368,060 in connection with
a rights issue only. This represents approximately two-thirds of
the Company’s issued ordinary share capital. Any allotments
or grants under paragraphs (a) or (b) of Resolution 7 will reduce
the level of this two-thirds authority.
In
Resolution 7 paragraph (d), the Board is again seeking authority to
issue sterling, US dollar and euro preference shares without having
first to obtain the consent of shareholders at a general meeting.
These preference shares were created to underpin issues of
preferred securities, which are a tax efficient form of regulatory
capital. If approved by shareholders, this authority will give
Directors the flexibility to raise regulatory capital should
circumstances so require. If any preference shares were to be
issued they would, subject to regulatory approval, be redeemable at
the Company’s option and carry no voting rights other than in
exceptional circumstances, but would rank in priority to the
Company’s ordinary shares with respect to participation in
any return of capital. The Board has no present intention of
exercising this authority.
If
granted, this authority will be effective until the conclusion of
the 2019 Annual General Meeting or the close of business on 30 June
2019, whichever is the earlier.
As at
20 February 2018, being the latest practicable date prior to
printing of this document, the Company held 325,273,407 of its
ordinary shares in treasury, representing 1.60 per cent of the
issued ordinary share capital (including treasury shares) and 1.63
per cent of the issued ordinary share capital (excluding treasury
shares).
8 and 9. Disapplication of pre-emption rights
Resolutions
8 and 9 are to approve the disapplication of statutory pre-emption
rights under the Act in respect of certain allotments of shares
made under the authorities in Resolution 7, in line with the
guidelines on share capital management issued by the UK’s
Investment Association (the “IA Guidelines”) and the
Pre-Emption Group’s Statement of Principles on Disapplying
Pre-Emption Rights. If the Directors wish to exercise the authority
under Resolution 7 and offer shares (or sell any shares which the
Company may purchase or elect to hold as treasury shares) for cash,
the Act requires that unless shareholders have given specific
authority for the disapplication of their statutory pre-emption
rights, the new shares must be offered first to existing
shareholders in proportion to their existing shareholdings.
Resolutions 8 and 9 seek to give the Directors’ flexibility,
in certain circumstances, to allot new shares (or to grant rights
over shares) for cash or to sell treasury shares for cash without
first offering them to existing shareholders in proportion to their
holdings.
Resolution
8 seeks to give the Directors additional flexibility in the context
of pre-emptive offerings such as a rights issue, open offer, or
scrip dividend, to deal with legal or practical difficulties in
countries outside the UK which prevent the offer being made on a
purely pro rata basis. It also seeks a disapplication of
pre-emption rights in respect of allotments or sales of treasury
shares for cash up to an aggregate nominal amount of
US$499,902,604, representing approximately five per cent of the
Company’s issued ordinary share capital. This is designed to
reflect the guidelines contained in the Pre-Emption Group’s
Statement of Principles on Disapplying Pre-Emption Rights, which
impose a five per cent limit for non-pre-emptive allotments for
cash, excluding certain allotments such as those under employee
share plans.
Resolution
9 is proposed as a separate resolution, in accordance with a
recommendation of the Pre-Emption Group released during 2016 and
the IA Guidelines, to authorise the Directors to allot an
additional quantity of shares (or sell treasury shares) for cash
otherwise than to existing shareholders pro rata to their holdings
up to an aggregate nominal amount of US$499,902,604, representing a
further five per cent of the Company’s issued share capital.
The additional authority in Resolution 9 may be used only in
connection with the financing (or refinancing) of an acquisition or
specified capital investment. In accordance with the Pre-Emption
Group’s Statement of Principles, the Directors confirm that
they intend to use the authority sought in Resolution 9 only in
connection with such an acquisition or specified capital investment
which is announced contemporaneously with the issue, or which has
taken place in the preceding six month period and is disclosed in
the announcement of the issue, and will provide shareholders with
information regarding the transaction if the authority is used.
Other than pursuant to the Company’s scrip dividend plan and
except for allotments under employee share plans, the Board has no
present intention of issuing any further ordinary shares pursuant
to the new general authorities in Resolutions 8 and 9. No issue
will be made which would effectively change the control of the
Company or the nature of its business without the prior approval of
shareholders at a general meeting.
If
granted, the authorities sought in Resolutions 8 and 9 will be
effective until the conclusion of the 2019 Annual General Meeting
or the close of business on 30 June 2019, whichever is the
earlier.
In
addition, the Company is seeking authority under Resolution 12 to
allot shares or rights to subscribe for shares in connection with
the issue of Contingent Convertible Securities
(“CCSs”), and to disapply statutory pre-emption rights
in respect of such allotment, in each case up to an amount
equivalent to approximately 20 per cent of the Company’s
issued ordinary share capital. Assuming Resolutions 12 and 13 are
passed, the authority sought under Resolutions 7, 8 and 9 would not
be utilised for the purpose of the issuance of CCSs.
The
Company also confirms that it does not intend to issue more than
7.5 per cent of its issued ordinary share capital (excluding
treasury shares) in any rolling three-year period, without prior
consultation with shareholders, save as permitted in connection
with an acquisition or specified capital investment as described
above. However, if passed, Resolutions 12 and 13 would permit this
level to be exceeded in connection with the issue of CCSs or the
conversion or exchange of CCSs.
Unless
otherwise stated, references in these Explanatory Notes to the
issued ordinary share capital, and to percentages or fractions of
the issued ordinary share capital, are to the issued ordinary share
capital of the Company (calculated exclusive of treasury shares) as
at 20 February 2018, being the latest practicable date prior to
printing this document.
10. Addition of any repurchased shares to general authority
to allot shares
Resolution
10 seeks to extend the Directors’ authority to allot shares
and grant rights to subscribe for or convert any security into
shares pursuant to paragraph (a) of Resolution 7 to include the
shares repurchased by the Company under the authority sought by
Resolution 11. This is permitted by the Hong Kong Listing
Rules.
11. Purchase of ordinary shares by the Company
The
purpose of the authority to be conferred by this item is to enable
the Company to make market purchases of its own
shares.
The
Directors consider that it is appropriate to seek authority for the
Company to make market purchases of up to 10 per cent of its own
ordinary shares and the maximum and minimum prices at which they
may be bought, exclusive of expenses, are specified in the
resolution. It remains the Directors’ policy to maintain a
robust capital base, a policy which has consistently been one of
the Group’s strengths. As the Group executes its strategy,
the appropriate level of capital to be held will be continually
reviewed. Having this authority will give Directors the
flexibility, if they consider it in the interests of the Company
and shareholders, to purchase ordinary shares in the market in
appropriate circumstances, for example, in the event that the
Company is unable to deploy the retained capital to create
incremental value for shareholders or to neutralise the dilutive
impact of scrip dividends, subject to regulatory approval. The
Company may decide to retain any shares it purchases as treasury
shares with a view to possible re-issue at a later date, transfer
in connection with an employee scheme, or it may cancel the
shares.
Shareholders
should note that under section 693 of the Act, the Company is only
permitted to make market purchases of its ordinary shares on a
recognised investment exchange. Of the venues where the
Company’s ordinary shares are listed, only the London Stock
Exchange is currently designated as a recognised investment
exchange.
The Act
permits the Company to elect to hold in treasury any ordinary
shares it may repurchase, rather than automatically cancelling
those shares. Approval has been received from the relevant
regulatory authorities in Hong Kong to enable the Company to hold
repurchased shares in treasury. The conditional waiver granted by
the Hong Kong Stock Exchange on 19 December 2005 was granted on the
basis of certain agreed modifications to the Hong Kong Listing
Rules applicable to the Company. Details of the modifications are
available at www.hsbc.com and the Hong Kong Stock Exchange’s
HKEX news website at www.hkexnews.hk. Copies of the modifications
are also available from the Group Company Secretary, HSBC Holdings
plc, 8 Canada Square, London E14 5HQ, United Kingdom and the
Corporation Secretary and Regional Company Secretary Asia-Pacific,
The Hongkong and Shanghai Banking Corporation Limited, 1
Queen’s Road Central, Hong Kong SAR.
The
Company exercised its authority to make market purchases of its own
shares pursuant to the authority granted at last year’s
Annual General Meeting. Pursuant to the buy-back implemented on 1
August 2017 and completed on 20 November 2017, (the “Second
2017 Buy-back”), the Company repurchased 205,624,077 of its
ordinary shares, all of which were cancelled.
Further
details regarding the proposed authority to be given to the Company
to purchase its own shares, the waiver granted by the Hong Kong
Stock Exchange, the Second 2017 Buy-back (including shares
purchased and prices paid on a monthly basis up to the latest
practicable date prior to printing this document) are set out in
Appendix 2.
The
total number of options to subscribe for ordinary shares
outstanding on 20 February 2018, being the latest practicable date
prior to printing of this document, was 63,366,118 which
represented 0.32 per cent of the issued ordinary share capital
(excluding treasury shares) as at that date. If the Company were to
purchase the maximum number of ordinary shares permitted by this
resolution, the options outstanding on 20 February 2018 would
represent 0.32 per cent of the issued ordinary share capital
(excluding treasury shares).
12 and 13. Additional authority to allot equity securities
in relation to the issue of Contingent Convertible Securities
(“CCSs”) and limited disapplication of pre-emption
rights
The
effect of Resolution 12 is to give the Directors the authority to
allot shares and grant rights to subscribe for, or to convert, any
security into ordinary shares in the Company up to an aggregate
nominal amount of US$1,999,610,418 equivalent to approximately 20
per cent of the ordinary shares in issue on 20 February 2018, being
the latest practicable date prior to printing this document. This
authority relates to the issue of CCSs.
CCSs
are debt securities which benefit from a specific regulatory
capital treatment under European Union legislation. They are
treated as Additional Tier 1 Capital and, as a banking group, HSBC
is able to hold a certain amount of its Tier 1 Capital in the form
of Additional Tier 1 Capital. The CCSs will be converted or
exchanged
into
ordinary shares if a defined trigger event occurs (which currently
is the HSBC Group’s Common Equity Tier 1 Capital ratio
falling below 7 per cent). Issuing CCSs gives the Company greater
flexibility to manage its capital in the most efficient and
economic way for the benefit of the shareholders. Please see
Appendix 1 for more information on CCSs.
This
authority is in addition to the authority proposed in Resolutions
7, 8 and 9, which contain the general authority sought on an annual
basis in line with the IA Guidelines and the Hong Kong Listing
Rules. If Resolutions 12 and 13 are passed, the Company will only
issue CCSs pursuant to the authority granted under these
resolutions and not under the authority granted under Resolutions
7, 8 and 9. Although the authority in Resolutions 12 and 13 is not
contemplated by the IA Guidelines, it has previously been discussed
with the Investment Association.
The
effect of Resolution 13 is to give the Directors’ authority
to allot CCSs, or shares issued upon conversion or exchange of
CCSs, without the need to first offer them to existing
shareholders. If passed, Resolution 13 will authorise the Directors
to allot shares and grant rights to subscribe for or to convert any
security into shares in the Company (or to sell treasury shares
held by the Company following any purchase of its own shares) on a
non-pre-emptive basis up to an aggregate nominal amount of
US$1,999,610,418, representing approximately 20 per cent of the
ordinary shares in issue on 20 February 2018, such authority to be
exercised in connection with the issue of CCSs. As at 20 February
2018, being the latest practicable date prior to printing of this
document, the Company held 325,273,407 of its ordinary shares in
treasury, representing 1.60 per cent of the issued ordinary share
capital (including treasury shares) and 1.63 per cent of the issued
ordinary share capital (excluding treasury shares).
The
authorities in Resolutions 12 and 13 will be utilised as considered
desirable to comply with or maintain compliance with the regulatory
capital requirements arising in connection with the relevant
European Union legislation and the prudential regulatory
requirements imposed by the Prudential Regulation Authority
(“PRA”) and only for those purposes. The Company will
not utilise the authority in Resolutions 12 and 13 to issue new
securities for any other purposes. However, pursuant to the
authority under Resolutions 12 and 13, the Company may issue
additional securities in order to manage the redemption of
outstanding CCSs.
The
approvals would be effective until the Company’s 2019 Annual
General Meeting or the close of business on 30 June 2019, whichever
is the earlier. The Directors expect to seek similar authorities on
an annual basis.
14. Renewal of scrip dividend authority
The
authority for the Directors to offer a scrip dividend alternative,
whereby shareholders may elect to receive new ordinary shares
instead of dividends in cash was last renewed at the 2016 Annual
General Meeting. Under the IA Guidelines, shareholder approval to
renew the authority for the Directors to offer a scrip dividend
alternative is required to be sought every three years. While the
three-year period approved at the 2016 Annual General Meeting has
not yet expired, the Directors are seeking a fresh approval to
offer a scrip dividend alternative for a further three years
expiring on the conclusion of the Annual General Meeting in 2021.
The reason for seeking the approval at this year’s Annual
General Meeting is to amend the authority to permit the Directors
to exercise their power under the new Articles of Association being
proposed under Resolution 15, at their discretion, to satisfy
elections for scrip dividends not only by the issue of new ordinary
shares, credited as fully paid, but also by the sale of treasury
shares.
15. Articles of Association
This
year, the Directors are seeking shareholder authority to adopt new
Articles of Association which update certain aspects of the
Company’s Articles of Association to take account of
developments in market practice since they were last updated in
2010. The principal changes are set out in Appendix 4 on pages 31
to 33.
16. Notice period for meetings
The UK
Companies Act 2006 provides that the minimum notice period for
general meetings of the Company is 21 days unless shareholders
approve a shorter notice period. The passing of this resolution
would enable the Company to call general meetings (other than
annual general meetings) on a minimum of 14 clear days’
notice. This shorter notice period of between 14 and 20 days would
not be used as a matter of routine, but only when the Directors
determine that calling a meeting on less than 21 days’ notice
is merited by the business of the meeting and consider it to be to
the advantage of shareholders as a whole. The approval would be
effective until the Company’s 2019 Annual General Meeting or
the close of business on 30 June 2019, whichever is the earlier,
when it is intended that a similar resolution will be
proposed.
Information about the 2018 Annual General Meeting
Venue
The AGM
will be held at the Queen Elizabeth II Conference Centre
(“QEII Centre”) which is located on Broad Sanctuary in
Westminster, central London and can easily be reached by public
transport. The full address is Broad Sanctuary, Westminster, London
SW1P 3EE, United Kingdom. A location map is below.
Refreshments
will be available prior to the AGM. Take-away lunch bags will be
provided in the catering area at the conclusion of the
AGM.
Access
The
QEII Centre is accessible by wheelchair. The auditorium is fitted
with an induction loop.
To help
us ensure that the AGM is fully accessible to all shareholders,
please contact Romana Lewis, Assistant Group Company Secretary
(telephone: +44 (0)20 7991 0100, email: romana.lewis@hsbc.com) if
you have any particular access requirements or other
needs.
Security
Security
checks will be carried out on entry to the AGM. Shareholders are
reminded that cameras and recording equipment will not be allowed
and all mobile telephones must be switched off or set to silent.
Shareholders are encouraged to leave coats and bags in the
cloakroom provided.
To
ensure optimum security within the auditorium, please note that you
will be provided with a wristband once you have been through the
security checks at the venue. You must show your wristband to gain
entry to the AGM.
Attendance and voting
Pursuant
to the Uncertificated Securities Regulations 2001 (as amended),
changes to entries on the principal register of members of the
Company maintained in England (the “Principal
Register”) or either the Hong Kong or Bermuda Overseas Branch
Registers of the Company (the “Branch Registers”), as
appropriate, after 12.01am (London time) on Thursday, 19 April 2018
or 12.01am (London time) on the day immediately before the day of
any adjourned meeting (as the case may be) shall be disregarded in
determining the rights of a member to attend or vote at the AGM or
any adjourned meeting (as the case may be). Accordingly, a member
entered on the Principal Register or the Branch Registers at
12.01am (London time) on Thursday, 19 April 2018 or 12.01am (London
time) on the day immediately before the day of any adjourned
meeting (as the case may be) shall be entitled to attend and vote
at the AGM or any adjourned meeting (as the case may be) in respect
of the number of such shares entered against the member’s
name at that time.
Voting
Voting
at the AGM will be conducted by way of a poll. This means that each
shareholder present or represented will be able to exercise one
vote for each share held. In the case of joint registered holders
of any share, the vote of the senior who tenders a vote, whether in
person or by proxy, shall be accepted to the exclusion of the votes
of the other joint holder(s). For this purpose, seniority shall be
determined by the order in which the names of the holders stand in
the Principal Register or the Branch Registers of the Company, as
appropriate.
Voting
results will be published on our website following the conclusion
of the AGM.
Appointing a proxy
You may
appoint the chairman of the AGM or a person of your choice to be
your proxy to attend, speak and vote on your behalf. A proxy need
not be a member of the Company. You may appoint more than one
proxy, provided that each proxy is appointed to exercise the rights
attached to a different share or shares held by you. If you require
additional forms of proxy, you may photocopy the original form of
proxy enclosed or ask our registrar to send you additional forms
(see “How to submit your form of proxy” below for the
registrar’s address).
A form
of proxy is enclosed with this document or may be accessed at
www.hsbc.com/proxy.
Whether
or not you propose to attend the AGM, you are requested to complete
and submit a form of proxy in accordance with the instructions
shown on it. The completion and submission of a form of proxy will
not preclude you from attending and voting in person at the
AGM.
How to submit your form of proxy
The
form of proxy must be received by 11.00am (London time) on Wednesday, 18 April
2018, or not less than 48 hours before the time of the
holding of any adjourned meeting.
You may
submit your form of proxy electronically at www.hsbc.com/proxy by
entering your Shareholder Reference Number and the Personal
Identification Number which is either printed on your form of proxy
or which has been sent to you by email if you have registered an
email address to receive electronic communications.
Alternatively,
you may send your completed form of proxy to:
●
Computershare
Investor Services PLC, PO Box 1064, The Pavilions, Bridgwater Road,
Bristol, BS99 6BD, United Kingdom;
●
Computershare Hong
Kong Investor Services Limited, Rooms 1712‑1716, 17th Floor,
Hopewell Centre, 183 Queen’s Road East, Hong Kong SAR;
or
●
Investor Relations
Team, HSBC Bank Bermuda Limited, 37 Front Street, Hamilton HM 11,
Bermuda.
For
shares held through CREST, proxy appointments may be submitted via
the CREST proxy voting system (see section on “CREST”
set out below).
In
order to be valid, the completed form of proxy (together with any
power of attorney or other authority under which it is signed, or a
copy of such authority certified notarially or in some other way
approved by the Board) must be deposited by 11.00am (London time)
on Wednesday, 18 April 2018, or not less than 48 hours before the
time of the holding of any adjourned meeting, at the offices of the
Company’s registrar (see above for the registrar’s
address). Any power of attorney or other authority relating to an
appointment of a proxy cannot be submitted electronically and must
be deposited as referred to above for the appointment to be
valid.
Asking questions at the AGM
You
have the right to ask questions in relation to the business of the
AGM but no answer need be given if (a) to do so would interfere
unduly with the preparation for the AGM or involve the disclosure
of confidential information,
(b) the
answer has already been given on a website in the form of an answer
to a question, or (c) it is undesirable in the interests of the
Company or good order of the AGM that the question be
answered.
If you
have any questions relating to the business of the AGM that you
would like to be addressed, please send an email to
shareholderquestions@hsbc.com including your Shareholder Reference
Number and we will endeavour to address the issues
raised.
Any
questions submitted that are not relevant to the business of the
AGM will be forwarded for the attention of a relevant executive or
the registrar, as appropriate. These might include matters relating
to a shareholder’s bank account or affairs which are unlikely
to be relevant to the business of the AGM.
Submitting
a question in advance of the AGM does not affect your rights as a
shareholder to attend and speak at the AGM.
Webcast
The AGM
will be webcast live at www.hsbc.com/agmwebcast and a recording
will be available for viewing until Sunday, 20 May
2018.
CREST
CREST
members who wish to appoint a proxy or proxies by using the CREST
electronic proxy appointment service may do so for the AGM or any
adjourned meeting by following the procedures described in the
CREST manual. CREST personal members or other CREST sponsored
members, and those CREST members who have appointed a voting
service provider, should refer to their CREST sponsor or voting
service provider, who will be able to take the appropriate action
on their behalf.
In
order for a proxy appointment or instruction made by means of CREST
to be valid, the appropriate CREST message (a “CREST Proxy
Instruction”) must be properly authenticated in accordance
with Euroclear UK & Ireland Limited’s specifications and
must contain the information required for such instructions, as
described in the CREST manual. The message, regardless of whether
it constitutes the appointment of a proxy or is an amendment to the
instruction given to a previously appointed proxy, must, in order
to be valid, be transmitted so as to be received by the
issuer’s agent (ID 3RA50) by 11.00am (London time) on
Wednesday, 18 April 2018, or not less than 48 hours before the time
of the holding of any adjourned meeting. For this purpose, the time
of receipt will be taken to be the time (as determined by the
timestamp applied to the message by the CREST Applications Host)
from which the issuer’s agent is able to retrieve the message
by enquiry to CREST in the manner prescribed by CREST. After this
time, any change of instructions to proxies appointed through CREST
should be communicated to the appointees through other
means.
CREST
members, and, where applicable, their CREST sponsor or voting
service providers should note that Euroclear UK & Ireland
Limited does not make available special procedures in CREST for any
particular messages. Normal system timings and limitations will
therefore apply in relation to the input of CREST Proxy
Instructions. It is the responsibility of the CREST member
concerned to take (or, if the CREST member is a CREST personal
member or sponsored member or has appointed a voting service
provider, to procure that his CREST sponsor or voting service
provider takes) such action as shall be necessary to ensure that a
message is transmitted by means of the CREST system by any
particular time. In this connection, CREST members and, where
applicable, their CREST sponsors or voting service providers are
referred, in particular, to those sections of the CREST manual
concerning practical limitations of the CREST system and
timings.
Pursuant
to Regulation 35(5)(a) of the Uncertificated Securities Regulations
2001 (as amended) the Company may treat as invalid a CREST Proxy
Instruction if the Company has actual notice that:
●
information in the
instruction is incorrect;
●
the person
expressed to have sent the instruction did not in fact send it;
or
●
the person sending
the instruction on behalf of the relevant shareholder did not have
the authority to do so.
Nominated persons
The
right to appoint a proxy does not apply to persons whose shares are
held on their behalf by another person who has been nominated to
receive communications from the Company in accordance with section
146 of the UK Companies Act 2006 (the “Act”)
(“nominated persons”). Nominated persons may have a
right under an agreement with the registered shareholder who holds
the shares on their behalf to be appointed (or to have someone else
appointed) as a proxy for the AGM. Alternatively, if nominated
persons do not have such a right, or do not wish to exercise it,
they may have a right under such an agreement to give instructions
to the person holding the shares as to the exercise of voting
rights at the AGM.
The
main point of contact for nominated persons remains the registered
shareholder (for example the stockbroker, investment manager,
custodian or other person who manages the investment). Any changes
or queries relating
to
nominated persons’ personal details and holdings (including
any administration thereof) must continue to be directed to the
registered shareholder and not the Company’s registrar. The
only exception is where the Company, in exercising one of its
powers under the Act, writes to nominated persons directly for a
response.
Corporate representatives
Any
corporation which is a shareholder can appoint one or more
corporate representatives who may exercise on its behalf all of its
powers as a shareholder provided that, if it is appointing more
than one corporate representative, it does not do so in relation to
the same share or shares. Any such representative should bring to
the meeting written evidence of his appointment, such as a
certified copy of a board resolution of, or a letter from, the
corporation concerned confirming the appointment.
Members’ power to require website publication of audit
concerns
Under
section 527 of the Act, members meeting the threshold requirements
in that section may require the Company to publish on its website a
statement setting out any matter that the members propose to raise
at the AGM relating to (i) the audit of the Company’s
accounts (including the Auditor’s report and the conduct of
the audit) that are to be laid before the AGM or (ii) any
circumstance connected with an Auditor of the Company ceasing to
hold office since the previous meeting at which annual accounts and
reports were laid. The Company may not require the members
requesting any such website publication to pay its expenses in
complying with sections 527 or 528 of the Act. Where the Company is
required to place a statement on a website under section 527 of the
Act, it must forward the statement to the Company’s Auditor
no later than the time when it makes the statement available on the
website. The business which may be dealt with at the AGM includes
any statement that the Company has been required under section 527
of the Act to publish on its website.
If you
have general queries about your shareholding, please contact the
relevant registrar at the address shown on page 25.
General information
Company’s registrar
For
general enquiries, requests for copies of corporate communications,
or a Chinese translation of this Notice and any future documents,
please contact:
●
Computershare
Investor Services PLC, The Pavilions, Bridgwater Road, Bristol,
BS99 6ZZ, United Kingdom (email via website:
www.investorcentre.co.uk/contactus);
●
Computershare Hong
Kong Investor Services Limited, Rooms 1712‑1716, 17th Floor,
Hopewell Centre, 183 Queen’s Road East, Hong Kong SAR (email:
hsbc.ecom@computershare.com.hk); or
●
Investor Relations
Team, HSBC Bank Bermuda Limited, 37 Front Street, Hamilton HM 11,
Bermuda (email: hbbm.shareholder.services@hsbc.bm).
Holders
of American Depositary Shares may obtain copies of this document by
calling +1 631 918 4040 or by writing to Proxy Services Corporation
(BNY Mellon ADR Team), 2180 5th Avenue – Suite #4,
Ronkonkoma, NY 11779, USA.
Information available on the website
A copy
of this Notice, and other information required by section 311A of
the UK Companies Act 2006, can be found on the Company’s
website (www.hsbc.com/agm).
Receiving corporate communications
Shareholders
may at any time choose to receive corporate communications in
printed form or to receive email notification of their availability
on HSBC’s website. To receive future notifications of the
availability of corporate communications on HSBC’s website by
email, or to revoke or amend an instruction to receive such
notifications by email, go to www.hsbc.com/ecomms.
If you
received a notification of the availability of this document on
HSBC’s website and for any reason have difficulty in
receiving or gaining access to the document, or you would like to
receive a printed copy of it, or if you would like to receive
future corporate communications in printed form, please write or
send an email (quoting your Shareholder Reference Number) to the
registrars at the relevant address set out above. Printed copies
will be provided without charge.
Further
copies of this document and future documents may also be obtained
by contacting the registrar. You may amend your election to receive
corporate communications in English or Chinese by contacting the
registrar at the relevant address set out above.
Documents available for inspection
Copies
of the terms of appointment for the non-executive Directors and the
service contracts of the Group Chairman and executive Directors are
available for inspection through the Group Company Secretary at the
Company’s registered office at 8 Canada Square, London E14
5HQ, United Kingdom and at 1 Queen’s Road Central, Hong Kong
SAR during usual business hours on any business day from the date
of this Notice until the date of the AGM and at the place and on
the date of the AGM from at least 15 minutes before the AGM begins
until the conclusion of the AGM.
Information set out in this Notice
Shareholders
are advised that any telephone number, website or email address set
out in the Notice of AGM, the form of proxy or accompanying
documents should not be used for the purposes of serving
information on the Company (including the service of documents or
information relating to the proceedings at the AGM) unless
otherwise stated.
This
document, for which the Directors of HSBC Holdings plc collectively
and individually accept full responsibility, includes particulars
given in compliance with the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited for the
purpose of giving information with regard to HSBC Holdings plc. The
Directors, having made all reasonable enquiries, confirm that to
the best of their knowledge and belief the information contained in
this document is accurate and complete in all material aspects and
not misleading or deceptive, and there are no other matters the
omission of which would make any statement herein or this document
misleading.
In the
event of a conflict between any translation and the English text
hereof, the English text will prevail.
Directors’ interests in the ordinary shares and debentures of
HSBC
Details
of interests of Directors who are standing for election or
re-election in the ordinary shares and debentures of HSBC are set
out in Appendix 3.
Appendix 1
Questions and Answers on Contingent Convertible Securities
(“CCSs”)
What are CCSs?
CCSs
are debt securities that benefit from a particular regulatory
capital treatment under European Union legislation. CCSs will be
converted or exchanged into ordinary shares if a defined trigger
event occurs. The terms of HSBC’s existing CCSs have received
regulatory approval from the Prudential Regulation Authority
(“PRA”).
As a
banking group, HSBC must meet minimum regulatory capital
requirements in the countries in which it operates. These include
compliance with European Union legislation under which banks and
bank holding companies are required to maintain Tier 1 Capital of
at least 6 per cent of their risk weighted assets. Of that, 1.5 per
cent of risk weighted assets may be in the form of Additional Tier
1 Capital. In addition, HSBC is required to satisfy an additional
capital requirement defined by the PRA by maintaining an additional
0.7 per cent of risk weighted assets in the form of Additional Tier
1 Capital.
In
order to qualify as Additional Tier 1 Capital, a security must
contain certain features designed to increase the resilience of the
issuing bank should the bank’s financial condition
deteriorate materially. The CCSs would qualify as Additional Tier 1
Capital on the basis that, on the occurrence of a defined trigger
event, they would be mandatorily converted into or exchanged for
ordinary shares of HSBC. The conversion or exchange would have the
effect of increasing the issuer’s Common Equity Tier 1
capital ratio.
What are the trigger events for the CCSs and what will happen if a
trigger event occurs?
Should
HSBC’s Common Equity Tier 1 capital ratio fall below the
defined capital trigger (the “Trigger Event”), the CCSs
would be converted into or exchanged for new ordinary shares in
HSBC on their prescribed terms. The defined capital trigger will be
specified in the terms of the CCSs when they are issued.
HSBC’s existing CCSs contain a Common Equity Tier 1 capital
trigger of 7.0 per cent on a Capital Requirements Directive IV
(“CRD IV”) end point basis which has been approved by
the PRA. It is HSBC’s current expectation that future CCSs
issued by the Group would contain the same capital trigger subject
to approval by the PRA.
What steps can HSBC take to mitigate a potential Trigger
Event?
HSBC is
required by its regulators to have in place a recovery plan in case
its regulatory capital levels come under pressure. Accordingly, if
HSBC’s capital ratios were to fall materially and in any
event in advance of a Trigger Event, HSBC would seek to commence
recovery actions in order to restore the HSBC Group’s
regulatory capital ratios and reduce the likelihood of a Trigger
Event occurring. HSBC’s recovery plan includes a number of
actions it may take, including reducing distributions, reducing
risk weighted assets or selling or liquidating assets.
HSBC’s
CRD IV end point basis Common Equity Tier 1 capital ratio was 14.5
per cent as at 31 December 2017. HSBC remains a strongly
capitalised bank, able to support both organic growth and dividend
returns to shareholders. HSBC remains well placed to meet expected
future capital requirements, and will continue to take actions to
remain in that position, taking into account the evolution of the
regulatory environment. Given its current capital position and the
planned recovery actions it would take if a Trigger Event was
deemed likely to arise, HSBC considers the circumstances in which a
Trigger Event might occur in practice to be remote.
The
CCSs which HSBC has issued to date have included a term which
provides that on the occurrence of a Trigger Event, the Directors
may elect, at their discretion, to give shareholders the
opportunity to purchase ordinary shares issued on conversion or
exchange of any CCSs on a pro rata basis, where practicable and
subject to applicable laws and regulations. This would be at the
same price as the holders of the CCSs would have acquired the
ordinary shares. Where permitted by law and regulation to do so,
the Company will continue to issue future CCSs including terms
which provide the Company with the discretion to offer the
opportunity to shareholders to purchase ordinary shares issued on
conversion or exchange of CCSs.
Will CCSs be redeemable?
There
is no general right of redemption for the holders of the CCSs. It
is expected that HSBC would have the right to redeem the CCSs after
a minimum period of five years and in certain other specified
circumstances, but any redemption features would need to be
approved by the PRA prior to issue and any redemption would be
subject to PRA approval at the time of redemption.
Will all CCSs be in the form of Additional Tier 1
Capital?
Yes.
The Company has no intention to issue capital securities pursuant
to Resolutions 12 and 13 except for securities which constitute
Additional Tier 1 Capital under applicable banking
regulations.
Why is HSBC seeking authority to issue CCSs?
Issuing
CCSs gives HSBC greater flexibility to manage its capital in the
most efficient and economical way. It is expected that Additional
Tier 1 Capital will be a cheaper form of capital than issuing and
maintaining Common Equity Tier 1 capital (e.g. ordinary shares) to
satisfy the Tier 1 Capital requirement and (provided the Trigger
Event does not occur) is non-dilutive to existing shareholders.
This should improve the returns available to existing shareholders
whilst maintaining HSBC’s capital strength, in line with
prevailing banking regulations.
The
authorities in Resolutions 12 and 13 are required because the
Directors are only permitted to issue up to 10 per cent of the
issued ordinary share capital for cash on a non-pre-emptive basis
under the general authorisation in Resolutions 7, 8 and 9 and five
per cent of that may only be used for the purposes of an
acquisition or other capital investment. Given the administrative
burden both in cost and time for a company the size of HSBC to
obtain these types of authorities, the Directors do not consider it
practical or in the interests of shareholders to seek a new
authority each time an issue of CCSs is proposed. It is important
to have the flexibility to react quickly to market and regulatory
demand. Furthermore, in order to obtain PRA approval to the
issuance of CCSs, all necessary allotment authorities need to be in
place, so the process of seeking a new authority in addition to PRA
approval would lead to unacceptable delay.
At what price will the CCSs be issued and how will the conversion
price be fixed?
As the
CCSs are debt securities, they will be issued at or close to their
face value in a manner typical for debt securities. The terms and
conditions for the CCSs will specify a fixed conversion price or a
mechanism for setting a conversion price (which could include a
variable conversion price determined by reference to the prevailing
market price on conversion subject to a minimum “floor”
price) which will determine how many ordinary shares are issued on
conversion or exchange of the CCSs if a Trigger Event occurred. In
respect of any CCSs issued (or shares issued on conversion or
exchange of CCSs) under the authorities in Resolutions 12 and 13,
the conversion price on issue of the CCSs will not be less than
£2.70, being the lowest trading price (recorded on 9 March
2009) of HSBC’s ordinary shares over the last 10 years (and
will be subject to typical adjustments for securities of this
type).
How have you calculated the size of the authorities you are
seeking?
The
size of the authorities refllected in Resolutions 12 and 13 have
been determined to provide flexibility to enable HSBC to optimise
its capital structure in light of the regulatory capital
requirements arising from the European Union legislation and PRA
requirements. The authority sought is based on the Directors’
assessment of the appropriate amount required to enable HSBC to
hold the maximum amount of Additional Tier 1 Capital taking into
account its expected risk weighted asset figures and applying the
conversion price based on historic lows of HSBC’s share price
over the last 10 years referred to above. The intention is to give
the Directors’ flexibility in managing HSBC’s capital
structure. For this reason, the resolutions give the
Directors’ authority to set the specifiic terms of the CCSs
after considering market practice and requirements at the
time.
Waiver granted by the Hong Kong Stock Exchange
The
Hong Kong Stock Exchange has granted the Company a waiver from
strict compliance with the requirements of Rule 13.36(1) of the
Hong Kong Listing Rules pursuant to which the Company is permitted
to seek (and, if approved, to utilise) the authority under
Resolutions 12 and 13 to issue CCSs (and to allot ordinary shares
into which they may be converted or exchanged) in excess of the
limit of the general mandate of 20 per cent of the Company’s
issued share capital (the “Mandate”). The waiver has
been granted on terms that permit the Mandate, if approved, to
continue in force until:
(i)
the conclusion of
the first annual general meeting of the Company following the date
on which the Mandate is approved (or the close of business on 30
June 2019, whichever is the earlier) at which time the Mandate
shall lapse unless it is renewed, either unconditionally or subject
to conditions; or
(ii)
such time as it is
revoked or varied by ordinary resolution of the shareholders in a
general meeting.
Appendix 2
Purchase of Ordinary Shares by the Company
Set out
below is information concerning the proposed general mandate for
the purchase of shares by the Company (Resolution 11), which
incorporates the Explanatory Statement required to be sent to
shareholders in accordance with the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited (“Hong
Kong Listing Rules”) as well as details of the conditional
waiver granted by the Hong Kong Stock Exchange to enable the
Company to hold in treasury any shares it may
repurchase.
(a)
It is proposed that
the Company be given authority to purchase up to 1,999,610,418
ordinary shares of US$0.50 each (which represent 10 per cent of the
ordinary shares in issue on 20 February 2018 being the latest
practicable date prior to the printing of this document). Purchases
of shares would be at prices not below the nominal value of each
ordinary share, US$0.50 or the equivalent in the relevant currency
in which the purchase is effected, and at not more than 105 per
cent of the average of the middle market quotations for the
ordinary shares on the London Stock Exchange for the five dealing
days before the relevant purchase or 105 per cent of the average of
the closing prices of the ordinary shares on the Hong Kong Stock
Exchange for the five dealing days before the relevant purchase,
whichever is lower.
(b)
The Directors
believe that it is in the best interests of the Company and its
shareholders to have a general authority from shareholders to
enable the Company to purchase ordinary shares in the market and to
give power to the Directors to exercise such authority. The
Directors intend that purchases of ordinary shares should only be
made if they consider that the purchase would operate for the
benefit of the Company and shareholders, taking into account
relevant factors and circumstances at that time, for example the
effect on earnings per share.
(c)
It is expected that
purchases will be funded from the Company’s available cash
flow or liquid resources and will, in any event, be made out of
funds legally available for the purchase in accordance with the
Articles of Association of the Company and the applicable laws of
England and Wales.
(d)
The Directors would
not make purchases in circumstances where to do so would have a
material adverse effect on the capital requirements of the Company
or the liquidity levels which, in the opinion of the Directors, are
from time to time appropriate for the Company. If the power to make
purchases were to be carried out in full (equivalent to 10 per cent
of the ordinary shares in issue on 20 February 2018 being the
latest practicable date prior to the printing of this document)
there might be a material adverse impact on the capital or
liquidity position of the Company (as compared with the position
disclosed in its published audited accounts for the year ended 31
December 2017).
(e)
None of the
Directors, nor, to the best of the knowledge of the Directors
having made all reasonable enquiries, any close associates (as
defined in the Hong Kong Listing Rules) of the Directors, has a
present intention, in the event that Resolution 11 is approved by
shareholders, to sell any ordinary shares to the Company. No core
connected persons (as defined in the Hong Kong Listing Rules) of
the Company have notified the Company that they have a present
intention to sell shares in the Company to the Company or have
undertaken not to sell any of the shares in the Company held by
them to the Company, in the event that Resolution 11 is
approved.
(f)
Under the
provisions of the UK Companies Act 2006 (the “Act”) the
Company is permitted, following any repurchase of ordinary shares,
to retain and hold such shares in treasury. While that Act does not
impose a limit on the number of shares that a company can hold in
treasury, UK investor protection guidelines and market practice in
the United Kingdom is to limit the extent of any share purchase
authority to 10 per cent of issued share capital, exclusive of
treasury shares. On 19 December 2005, the Hong Kong Stock Exchange
granted a conditional waiver to the Company to enable it to hold
shares which it may repurchase in treasury (the “2005
Waiver”). The 2005 Waiver is subject to certain conditions,
including compliance by the Company with all applicable laws and
regulations in the United Kingdom in relation to the holding of
shares in treasury. As part of the 2005 Waiver, the Company has
agreed with the Hong Kong Stock Exchange a set of modifications to
the Hong Kong Listing Rules necessary to enable the Company to hold
treasury shares. The modifications also reflect various
consequential matters to deal with the fact that the Company may
hold treasury shares in the future. A full version of the
modifications is available on the Company’s
website,
www.hsbc.com, and
the Hong Kong Stock Exchange’s (“HKEX”) news
website, www.hkexnews.hk. Copies of the modifications are also
available from the Group Company Secretary, HSBC Holdings plc, 8
Canada Square, London E14 5HQ, United Kingdom and the Corporation
Secretary and Regional Company Secretary Asia-Pacific, The Hongkong
and Shanghai Banking Corporation Limited, 1 Queen’s Road
Central, Hong Kong SAR. In accordance with the terms of the 2005
Waiver, the Company has confirmed to the HKEX that it will comply
with the applicable law and regulation in the United Kingdom in
relation to the holding of any shares in treasury and with the
conditions of the 2005 Waiver in connection with any shares which
it may hold in treasury.
(g)
The Directors have
undertaken to the HKEX that, if they exercise any power of the
Company to make purchases pursuant to Resolution 11, they will do
so in accordance with the Hong Kong Listing Rules (as modified in
accordance with the terms of the 2005 Waiver to enable the Company
to hold in treasury any shares it may repurchase) and the
applicable laws of England and Wales.
(h)
The Directors are
not aware of any consequences which would arise under any
applicable Takeover Code as a result of any purchases made by the
Company pursuant to Resolution 11, if approved.
(i)
The Company
repurchased for cancellation 328,223,401 ordinary shares on the
London Stock Exchange pursuant to the two separate share buy-backs,
which concluded on 12 April 2017 and 20 November 2017 respectively.
The table below outlines the number of shares purchased during the
second of those buy-back programmes in 2017 on a monthly
basis.
|
|
Number of
|
Highest price
|
Lowest price
|
Average
price
|
Aggregate price
|
|
Month
|
shares
|
paid per share
|
paid per share
|
paid
per share
|
paid
|
|
|
|
(£)
|
(£)
|
(£)
|
(£)
|
|
August
2017
|
49,649,445
|
7.7090
|
7.3010
|
7.4789
|
371,323,631
|
|
September
2017
|
55,482,328
|
7.5260
|
7.0530
|
7.2806
|
403,943,040
|
|
October
2017
|
53,192,769
|
7.6880
|
7.3400
|
7.4595
|
396,791,032
|
|
November
2017
|
47,299,535
|
7.4650
|
7.2730
|
7.3513
|
347,711,753
|
|
|
|
|
|
|
|
(j)
The highest and
lowest mid-market prices at which ordinary shares or, in the case
of the New York Stock Exchange, American Depositary Shares
(“ADSs”), have traded on the Hong Kong, London, New
York, Paris and Bermuda Stock Exchanges during each of the twelve
completed months prior to the latest practicable date before
printing of this document were as follows:
|
|
|
|
|
|
New York
|
NYSE Euronext
|
|
|
|
|
Month
|
Hong Kong
|
London
|
Stock Exchange
|
Paris
|
Bermuda
|
|
|
Stock
Exchange Stock Exchange
|
(ADSs1)
|
Stock
Exchange Stock Exchange
|
|
|
|
Lowest Highest
|
Lowest Highest
|
Lowest Highest
|
Lowest Highest
|
Lowest Highest
|
|
|
|
(HK$) (HK$)
|
(£)
|
(£)
|
(US$) (US$)
|
(€)
|
(€)
|
(BD$) (BD$)
|
|
|
February
2017
|
62.50
|
69.00
|
6.46
|
7.12
|
40.30
|
44.11
|
7.56
|
8.35
|
8.40
|
8.60
|
|
|
March
2017
|
62.75
|
64.35
|
6.46
|
6.72
|
40.50
|
41.41
|
7.46
|
7.76
|
8.00
|
8.60
|
|
|
April
2017
|
62.10
|
64.40
|
6.21
|
6.58
|
39.73
|
41.43
|
7.40
|
7.72
|
7.95
|
8.30
|
|
|
May
2017
|
64.25
|
69.00
|
6.37
|
6.87
|
41.28
|
44.41
|
7.57
|
8.06
|
7.95
|
8.75
|
|
|
June
2017
|
67.65
|
72.80
|
6.77
|
7.16
|
43.31
|
46.53
|
7.73
|
8.14
|
8.65
|
8.75
|
|
|
July
2017
|
72.65
|
78.45
|
7.12
|
7.57
|
46.39
|
50.09
|
8.08
|
8.48
|
8.65
|
9.75
|
|
|
August
2017
|
73.75
|
79.35
|
7.34
|
7.70
|
47.21
|
50.80
|
8.00
|
8.55
|
9.45
|
9.90
|
|
|
September
2017
|
74.15
|
76.65
|
7.08
|
7.50
|
47.46
|
49.41
|
7.86
|
8.36
|
9.50
|
9.90
|
|
|
October
2017
|
76.00
|
78.60
|
7.34
|
7.63
|
48.74
|
50.60
|
8.27
|
8.53
|
9.80
|
9.90
|
|
|
November
2017
|
75.10
|
78.00
|
7.30
|
7.45
|
48.05
|
49.83
|
8.18
|
8.45
|
9.55
|
9.85
|
|
|
December
2017
|
76.10
|
80.00
|
7.25
|
7.69
|
48.55
|
51.66
|
8.23
|
8.74
|
9.55
|
10.30
|
|
|
January
2018
|
79.95
|
85.85
|
7.51
|
7.96
|
51.64
|
55.62
|
8.54
|
8.97
|
10.30
|
10.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Each
ADS represents five ordinary shares.
Appendix 3
Directors’ interests in the ordinary shares and debentures of
HSBC
According to the
register of Directors’ interests maintained by HSBC Holdings
plc pursuant to section 352 of the Securities and Futures Ordinance
of Hong Kong, the Directors who are standing for election or
re-election had the following interests, all beneficial unless
otherwise stated, in the shares and debentures of HSBC and its
associated corporations on the latest practicable date prior to the
printing of this document being 20 February 2018.
In this
Appendix, all references to “beneficial owner” means a
beneficial owner for the purposes of the Securities and Futures
Ordinance of Hong Kong.
|
|
|
|
Jointly
|
|
|
|
|
|
Child
|
with
|
|
|
|
|
Beneficial
|
under 18
|
another
|
|
Total
|
|
HSBC
Holdings plc Ordinary Shares
|
owner
|
or spouse
|
person
|
Trustee
|
interests
|
|
Kathleen Casey1
|
9,125
|
—
|
—
|
—
|
9,125
|
|
Laura Cha2
|
10,200
|
8,000
|
—
|
—
|
18,200
|
|
Henri
de Castries
|
17,116
|
—
|
—
|
—
|
17,116
|
|
Lord
Evans of Weardale
|
12,892
|
—
|
—
|
—
|
12,892
|
|
John Flint3
|
533,118
|
—
|
—
|
—
|
533,118
|
|
Irene
Lee
|
10,588
|
—
|
—
|
—
|
10,588
|
|
Iain Mackay3
|
442,118
|
—
|
—
|
—
|
442,118
|
|
Heidi Miller1
|
4,200
|
—
|
—
|
—
|
4,200
|
|
Marc Moses3
|
1,207,068
|
—
|
—
|
—
|
1,207,068
|
|
David
Nish
|
—
|
50,000
|
—
|
—
|
50,000
|
|
Jonathan
Symonds
|
37,936
|
4,885
|
—
|
—
|
42,821
|
|
Jackson Tai1 4
|
12,900
|
10,350
|
21,575
|
—
|
44,825
|
|
Mark
Tucker
|
276,000
|
—
|
—
|
—
|
276,000
|
|
Pauline
van der Meer Mohr
|
15,000
|
—
|
—
|
—
|
15,000
|
1
These are interests
in listed American Depository Shares (“ADSs”), which
are categorised as equity derivatives under Part XV of the
Securities and Futures Ordinance of Hong Kong: Kathleen Casey,
1,825; Heidi Miller, 840; and Jackson Tai, 8,965. Each ADS
represents five HSBC Holdings Ordinary Shares.
2
HSBC Holdings was
advised on 23 January 2018, that Laura Cha’s spouse acquired
8,000 shares on 24 August 2015.
3
Executive
Directors’ other interests in HSBC Holdings ordinary shares
arising from the HSBC Holdings savings-related share option plans
and the HSBC Share Plan 2011 are set out in the Scheme interests in
the Directors’ Remuneration Report on page 141 of the Annual
Report & Accounts 2017, with the exception of John Flint, who
was appointed as an executive Director on 21 February 2018. At 20
February 2018 the aggregate interests under the Securities and
Futures Ordinance of Hong Kong in HSBC Holdings ordinary shares,
including interests arising through employee share plans and the
interests above were: John Flint – 1,156,259; Iain Mackay
– 2,140,600; and Marc Moses – 2,920,384. Each
Director’s total interests represents less than 0.02 per cent
of the shares in issue and 0.02 per cent of the shares in issue
(excluding treasury shares).
4
Jackson Tai has a
non-beneficial interest in 10,350 shares of which he is
custodian.
Appendix 4
Summary of the proposed changes to the Articles of Association
– Resolution 15
It is
proposed to adopt new Articles of Association (“New
Articles”) with effect from the conclusion of the AGM
principally to reflect developments in market practice and to
reflect certain amendments to the UK Companies Act 2006 (the
“Act”). A copy of the proposed New Articles, marked to
show all changes proposed, and a copy of the current Articles of
Association (“Current Articles”) will be available for
inspection on the Company’s website (www.hsbc.com/agm) and at
the Company’s registered office at 8 Canada Square, London
E14 5HQ, United Kingdom from the date of this Notice until the
close of the AGM. They will be available for inspection at the
registered office during normal business hours, Monday to Friday
(excluding public holidays). The documents will also be available
for inspection at the Queen Elizabeth II Conference Centre, Broad
Sanctuary, London SW1P 3EE, United Kingdom, from 10.30am on the day
of the AGM until the conclusion of the AGM. The principal changes
to the Current Articles, which are included in the proposed New
Articles, are summarised below. As a result of the proposed
amendments the numbering of provisions in the New Articles does not
always correspond to the Current Articles and references to an
Article are references to the proposed New Articles unless
otherwise stated:
Electronic facility
A new
definition of “electronic facility” has been
incorporated and is referred to in relevant Articles to reflect the
electronic means for participating in, attending and voting at
general meetings (Articles 53.2, 54.4, 54.8, 56.1, 58.1, 61.1,
61.2, 62.1, 64.4, 64.5, 66.1, 70.1 and 74.1).
Share warrants to bearer
The
Small Business, Enterprise and Employment Act 2015 amended the Act
to prohibit the creation of bearer shares and required existing
bearer shares to be converted into registered shares or cancelled.
Since it is now unlawful to issue bearer shares, Article 13 in the
Current Articles has been deleted.
Uncertificated shares
Article
17.4 permits the Company to assume the completeness and accuracy of
entries on any record of securities maintained in accordance with
regulations and reconciled with the relevant operator.
Transmission of shares
Article
44.1 clarifies that all limitations, restrictions and provisions in
the Articles apply to any person entitled to a share in consequence
of death or bankruptcy or transmission by operation of law. Article
44.3 provides that a person entitled to a share who has elected for
that share to be transferred to another person ceases to be
entitled to any rights in relation to the share once the other
person is registered as the holder of the share.
Destruction of documents
In line
with market practice, Article 46 incorporates additional categories
of documents that may be destroyed, which includes the following:
(i) all paid dividends, warrants and cheques after one year from
the date of payment; (ii) all proxy appointments used for the
purposes of a poll can be destroyed after one year from the date of
use; and (iii) all proxy appointments not used for the purposes of
a poll can be destroyed after one month from the date of the end of
the meeting to which the proxy appointment relates and no poll was
demanded.
General meetings
Amendments
are proposed to allow for meetings to be held electronically as
well as physically, in accordance with the Companies
(Shareholders’ Rights) Regulations 2009 and the Act and to
clarify the circumstances in which satellite meetings can be held
in addition to meetings at a principal meeting place. The changes
will allow for meetings to be held and conducted in such a way that
persons who are not present together at the same place may attend,
speak and vote at the meeting by electronic means or at a different
satellite meeting location. This will allow the Board greater
flexibility to align with technological advances and changes in
investor sentiment and market practice. In line with the views
expressed by the Investment Association and Institutional
Shareholder’ Services, the changes will not permit meetings
to be held solely by electronic means. A physical meeting will
still be required.
The New
Articles also contain consequential changes to allow for physical,
satellite and electronic participation in meetings so that the
Company can continue to operate and comply with its legal and
regulatory obligations (Articles 53.2, 54.3 to 54.5, 54.7, 54.8,
56.1, 58.1, 61, 62, 64, 65, 66.1, 70.1 and 74).
Special business
To
reflect that there is no longer a requirement to distinguish
between ordinary and special business at a general meeting, Article
58 in the Current Articles has been deleted.
Voting
Article
66.1 is amended to provide that where a resolution is voted on at a
general meeting where shareholders are participating electronically
as well as at a physical meeting such a vote will be decided on a
poll.
Validity of meeting
Article
74 clarifies that any person attending or participating
electronically in a general meeting will be responsible for
maintaining adequate facilities to enable them to do
so.
Form of proxy
Article
77.2 incorporates changes to permit a proxy instruction from a
holder of shares in an uncertificated form to be appointed by
electronic communication in the form of an uncertificated proxy
instruction. Articles 77.3 and 77.4 provide for the Board to
determine how and when such instruction is received and
validated.
Untraced shareholders
Articles
85 and 86 amend the provisions of the Current Articles relating to
shareholders who are considered to be untraced after a period of 12
years. Under the Current Articles, the Company may sell the shares
of shareholders who have been untraced for a period of 12 years or
more and can use the proceeds of that sale for the purposes of its
business. The former shareholder remains a creditor of the Company,
so they may subsequently claim the proceeds at any time. Article 86
treats the proceeds of sale as forfeited by the former shareholder
following the sale of the shares and the former shareholder will
have no further rights to claim the proceeds. The Company may use
the money for such good causes as the Board thinks
fit.
The New
Articles also contain related changes in respect of unclaimed
dividends or other money payable on shares of untraced shareholders
which are sold.
Retirement of Directors
In line
with the recommendations in the UK Corporate Governance Code and to
reflect the Company’s established practice, the New Articles
incorporate amendments to provide for automatic retirement of all
of the Company’s Directors at each annual general meeting and
that they will be subject to annual re-election by shareholders
(Articles 94 and 95). The requirement for retirement by rotation
has been deleted. The New Articles also contain:
(i)
necessary related changes (to allow additional appointments or
automatic re-election (Article 95)) so that the Company can
continue to operate, and comply with its legal and regulatory
obligations in the event that not enough Directors are able to act
because the resolutions for re-election put to the annual general
meeting have not been passed (Article 96); and (ii) minor
consequential changes for drafting, numbering and cross-referencing
(Articles 94, 95 and 96).
Vacation of office by Director
To
reflect a provision in the Mental Health (Discrimination) Act 2013,
Article 100.1(d) in the Current Articles has been removed from
Article 98.1.
Proceedings of Directors and Committees – Quorum
Article
123.1 has been amended to clarify that if a Director ceases to be a
Director during a meeting of the Board that person may continue to
be present and to act as a Director and be counted in the quorum
until the end of the meeting provided that no other Director
objects and if otherwise a quorum would not be
present.
Proceedings of Directors and Committees – Voting
Article
125.1 incorporates amended wording to clarify that the Chairman
will not have a second or casting vote, in the case of an equality
of votes by the Board, if the Chairman is not entitled to vote on
the resolution in question, for example due to a conflict of
interest.
Application of seal
Article
142 is amended to reflect the change that a laser seal can be
adopted for the purposes of share certificates. The Company can
move away from the process of applying an embossed seal to every
share certificate produced.
Interim dividends
Article
147, which relates to interim dividends, has been updated in
connection with the proposal to permit treasury shares to be used
to satisfy scrip dividends and the related changes to Article 155.
In order to permit treasury shares to be used to satisfy elections
for a scrip dividend, the dividend needs to represent a debt of the
Company before the dividend is paid. In the ordinary course, an
interim dividend does not represent a debt of the Company until it
is paid. The changes to Article 147 permit the Company to resolve
that an interim dividend represents a debt at a time to be
specified by the Board. The consideration for the sale of the
treasury shares will be the release of the Company’s
liability to pay the dividend.
Distribution in specie
Article
150.1 has been amended to require the Board to have the authority
of an ordinary resolution of the Company to enable it to make
payment of any dividend declared either wholly or partly by a
distribution of assets of any kind, or of paid up shares,
securities or debentures of the Company.
Payment of dividends
Article
152 incorporates amendments to update the provisions of the Current
Articles that relate to the way dividends are paid. The Institute
of Chartered Secretaries and Administrators Registrars Group issued
guidance in 2014 that included recommended wording for articles of
association to allow sufficient flexibility for electronic payment
(or other similar means) of dividends. Article 152 allows the
payment of dividends by different methods (including by cheque,
bank transfer, electronic and other means). Additionally, it
permits the Board to decide which payment method is to be used on
any particular occasion.
Payment of scrip dividends
Article
155 incorporates amendments to permit use of treasury shares for
the payment of scrip dividends in addition to new shares and to
make changes to bring Article 155 in line with market
practice.
Strategic report and supplementary materials
Changes
to the Act mean that the Company is no longer required to prepare a
summary financial statement. Instead, if a shareholder agrees not
to receive the full annual report and accounts, the Company may
provide a copy of the strategic report together with certain
supplementary materials. Article 162.1 reflects the updated
provisions in the Act. However, shareholders can always view the
full annual report and accounts on the Company’s website or
request a hard copy from the Company’s
registrar.
General
As it
is proposed to adopt the New Articles in order to effect the
changes noted above, the opportunity has been taken to generally
include clarificatory amendments in other parts of the New Articles
to update them in line with common market practice. By way of
example, ensuring terminology is gender balanced by replacing
“he” with “he or she” and “him”
with “him or her”. Other such minor, technical and
clarifying changes have not been noted.
Photography
Directors
and Group Company Secretary by Charles Best, except John Flint by
Global Communications, HSBC Holdings plc
Printed
by Park Communications Limited, London, on Revive 50 Silk paper
using vegetable oil-based inks. Made in Italy, the paper comprises
50% virgin fibre, 25% de-inked post-consumer waste and 25%
pre-consumer waste. Pulps used are elemental
chlorine-free.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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HSBC
Holdings plc
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By:
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Name:
Ben J S Mathews
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Title:
Group Company Secretary
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Date:
7 March
2018
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