HKSI Paper 1 Business operations and practices question: Board Rule 3.13A

HKSI Paper 1Business operations and practices

Mr Siu was an INED of a Main Board issuer from June 2015 to June 2021, left for two years, and was re-appointed in June 2023. Under Main Board Rule 3.13A, which of the following statements are CORRECT? I. His two-year break counts towards his nine-year tenure. II. His tenure restarted in June 2023, so he reaches nine years only in 2032. III. After nine years, he could later be re-appointed as its INED after three years off its group's boards, if independent. IV. On reaching nine years, he may be re-designated a non-executive director instead of leaving the board.

A I, III and IV only
B II and IV only
C I and III only
D II, III and IV only

Show the answer and explanation

Answer: A. I, III and IV only

Note 2 to Main Board Rule 3.13A (effective 1 July 2025) counts tenure from the first appointment, and any break of less than three years before the nine years are served counts towards tenure. Mr Siu's two-year gap therefore counts, so statement I is true and statement II is false: his nine years ran from June 2015 and ended in June 2024. Statement III is true: Note 3 allows re-appointment if he meets the Rule 3.13 independence guidelines and has not been a director of the issuer, its holding company, their subsidiaries or core connected persons in the previous three years (the cooling-off period was lengthened from the proposed two years to three). Statement IV is true: HKEX's conclusions confirm issuers may re-designate long serving INEDs as non-executive directors. Source: Main Board Listing Rule 3.13A Notes 2 and 3 (effective 1 July 2025); HKEX Consultation Conclusions (December 2024) paras 128-129 (as at October 2026).

Common mistake

Candidates assume stepping down resets the clock. A break of under three years counts towards the nine years, so short gaps cannot be used to extend tenure.

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Related HKSI Paper 1 questions

Lion Peak Holdings Ltd, a Main Board issuer, has three INEDs: two have served since 2014 and one since 2023. Under the Listing Rules' cap on INED tenure, what must its board achieve by the conclusion of its first AGM held on or after 1 July 2028?Mr Fung is an INED of four Main Board issuers, an executive director of one GEM issuer and an INED of a company listed only in Singapore. In 2029 a fifth Main Board issuer invites him to become its INED. Under Main Board Rule 3.12A, may he accept?Ms Chen joined the board of a Main Board issuer on 2 March 2026. She has never been a director of a Main Board or GEM issuer, but until December 2025 she was a director of a Nasdaq-listed company. What minimum training must she complete under the Listing Rules?

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