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A Placement Agreement sets out the terms when a company wants to sell new shares through a placement agent in Hong Kong's financial markets. It's the key contract between the issuing company and the investment bank or broker handling the share placement, covering crucial details like pricing, timing, and commission structures.

These agreements play a vital role in Hong Kong's capital markets, helping companies raise funds while ensuring compliance with Securities and Futures Commission (SFC) requirements. The document spells out each party's obligations, including due diligence requirements, marketing restrictions, and the specific conditions that must be met before the placement can proceed.

Use a Placement Agreement when your company needs to raise capital by selling new shares through an investment bank or broker in Hong Kong. This becomes essential for both listed companies planning follow-on offerings and private companies preparing for IPOs or significant fundraising rounds.

The timing typically aligns with your capital raising strategy - for example, when expanding operations, funding acquisitions, or strengthening your balance sheet. Having this agreement in place helps secure favorable terms with placement agents, ensures SFC compliance, and provides a clear framework for the entire share placement process, from pricing mechanisms to marketing restrictions.

• Private Placement Agreement: Core document for selling shares to specific investors, with detailed subscription terms and investor qualifications
• Placement Confirmation Letter: Shorter form agreement confirming key placement terms and conditions after initial negotiations
• Recruiting Service Level Agreement: Specialized version focused on placement agent performance metrics and service standards in recruitment contexts

• Issuing Companies: Hong Kong listed companies or private firms seeking to raise capital through share placements
• Investment Banks: Act as placement agents, managing the share offering process and finding qualified investors
• Legal Counsel: Draft and review agreements to ensure SFC compliance and protect their clients' interests
• Company Directors: Authorize and execute the agreement on behalf of the issuing company
• Compliance Officers: Monitor adherence to placement terms and regulatory requirements throughout the process
• Target Investors: Professional or institutional buyers who meet placement qualification criteria

• Company Details: Gather corporate information, share structure, and board resolutions authorizing the placement
• Placement Terms: Define share quantity, price range, target investors, and timeline for the offering
• Agent Information: Confirm placement agent details, commission structure, and specific services they'll provide
• Legal Requirements: Check SFC regulations and listing rules applicable to your placement type
• Risk Factors: List potential risks and required disclosures for the placement memorandum
• Document Generation: Use our platform to create a customized, compliant agreement that includes all required elements
• Internal Review: Have key stakeholders verify business terms before finalizing

• Parties & Definitions: Full legal names of issuer and placement agent, plus key terms defined
• Placement Terms: Number of shares, price range, and placement period clearly specified
• Agent Obligations: Detailed responsibilities, marketing restrictions, and commission structure
• Representations: Company warranties about share validity and disclosure accuracy
• Conditions Precedent: Required approvals, documentation, and regulatory clearances
• Termination Rights: Events allowing either party to end the agreement
• Governing Law: Hong Kong law jurisdiction and dispute resolution procedures
• Regulatory Compliance: SFC requirements and listing rules adherence statements

A Placement Agreement differs significantly from a Bond Issuance Agreement in several key aspects, though both are used to raise capital in Hong Kong's financial markets. Let's explore the main differences:

• Asset Type: Placement Agreements deal with equity shares, while Bond Issuance Agreements cover debt securities
• Investment Duration: Equity placements represent permanent capital with no fixed repayment date, unlike bonds which have defined maturity periods
• Investor Rights: Share placements give investors ownership rights and potential dividends, whereas bonds only provide interest payments and principal repayment
• Regulatory Framework: While both require SFC oversight, placement agreements face additional requirements under Hong Kong's listing rules
• Risk Profile: Share placements carry higher risk but unlimited upside potential, compared to bonds' fixed returns and priority in liquidation