Hong Kong Exchanges and Clearing Limited — Proxy Solicitation & Information Statement 2016

May 10, 2016

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action you should take, you should consult an exchange participant or other securities dealer licensed as a licensed person under the Securities and Futures Ordinance, bank manager, solicitor, certified public accountant or other professional adviser.

Pursuant to Chapter 38 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the Securities and Futures Commission regulates Hong Kong Exchanges and Clearing Limited in relation to the listing of its shares on The Stock Exchange of Hong Kong Limited. The Securities and Futures Commission takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness, and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

No Shareholder receiving a copy of this circular, an Election Form or a Revocation Notice in any territory outside Hong Kong may treat the same as an invitation to elect for new Shares unless in that relevant territory such invitation could lawfully be made to that Shareholder without the Company having to comply with any registration or other legal requirements, governmental or regulatory procedures or any other similar formalities. It is the responsibility of any Shareholder outside Hong Kong who wishes to receive New Shares under the Scrip Dividend Scheme to comply with the laws of the relevant jurisdictions including any applicable procedures or any other similar formalities.

In particular, this circular does not constitute an offer to sell or the solicitation of an offer to buy any of the Shares in the United States. The Shares may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. No public offer of the Shares is to be made in the United States.

香港交易及結算所有限公司 HONG KONG EXCHANGES AND CLEARING LIMITED

(Incorporated in Hong Kong with limited liability) (Stock Code: 388)

SCRIP DIVIDEND SCHEME IN RELATION TO THE FINAL DIVIDEND FOR THE YEAR ENDED 31 DECEMBER 2015

If you wish to receive your Final Dividend wholly or partly in the form of New Shares instead of in cash, or to revoke your Permanent Election to receive your Final Dividend wholly or partly in cash, you should complete the Election Form or Revocation Notice (as the case may be) in accordance with the instructions printed on it and return the completed Election Form or Revocation Notice to the Share Registrar as soon as possible so as to enable it to be received before the Closing Time.

11 May 2016

Definitions

In this circular, the following expressions have the following meanings unless the context otherwise requires:

• “Board” the board of directors of the Company; “CCASS” the Central Clearing and Settlement System; “Closing Time” the closing time for the return of the completed Election Form or Revocation Notice (as the case may be) to the Share Registrar, being 4:30 pm on Thursday, 26 May 2016;

• “Company” Hong Kong Exchanges and Clearing Limited, a company incorporated in Hong Kong with limited liability, whose shares are listed on the Main Board of the Stock Exchange;

• “Election Form” the form of election for use by the Shareholders who wish to receive the Final Dividend wholly or partly in New Shares instead of in cash and, where applicable, to make a Permanent Election;

• “Excluded Shareholders” has the meaning given to it in paragraph 7 of the Appendix of this circular;

• “Final Dividend” the final dividend of $2.87 per Share for the year ended 31 December 2015 payable to the Shareholders whose names appeared on the Company’s register of members on the Record Date;

• “Hong Kong” Hong Kong Special Administrative Region of the People’s Republic of China;

• “Market Value” the price for converting cash dividend to scrip under the Scrip Dividend Scheme, as described in paragraph 1.2 of the Appendix of this circular;

• “New Share(s)” new fully paid Share(s) to be issued under the Scrip Dividend Scheme;

• “Permanent Election” election made by a Shareholder to receive new Shares instead of cash in respect of all future dividends to be paid by the Company for which a scrip alternative is available for such Shareholder’s entire registered holding of Shares held on the relevant record date(s);

• “Record Date” Friday, 6 May 2016, being the date for determining the Shareholders’ respective entitlements to the Final Dividend;

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Definitions

“Revocation Notice”	the form of revocation for use by the Shareholders
	who have previously made a Permanent Election
	but wish to receive the Final Dividend wholly or
	partly in cash;
“Scrip Dividend Scheme”	the scheme under which the eligible Shareholders
	may elect to receive the Final Dividend wholly or
	partly by the allotment of New Shares instead of
	in cash;
“SFC”	Securities and Futures Commission;
“Share(s)”	share(s) of the Company;
“Share Registrar”	Hong Kong Registrars Limited, at 17M Floor,
	Hopewell Centre, 183 Queen’s Road East, Wanchai,
	Hong Kong;
“Shareholder(s)”	holder(s) of the Shares;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited, a
	wholly-owned subsidiary of the Company, being a
	recognized exchange company under the
	Securities and Futures Ordinance (Chapter 571 of
	the Laws of Hong Kong);
“United States”	United States of America or any of its territories or
	possessions;
“$”	Hong Kong dollar; and
“%”	per cent.

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Timetable

A timetable summarising the events in relation to the Final Dividend is set out below:

Event

Date

Last date cum-Final Dividend

Friday, 29 April 2016

Ex-Final Dividend date

Tuesday, 3 May 2016

• Closure of the Company’s register of members for the purpose of determining the Shareholders’ respective entitlements to the Final Dividend

• Thursday, 5 May 2016 to Friday, 6 May 2016

• (both dates inclusive)

Record Date

Friday, 6 May 2016

• Announcement of the Market Value (which will be available on the HKEXnews website (www.hkexnews.hk) and the Company’s website (www.hkex.com.hk))

Tuesday, 17 May 2016

• Closing Time[(Note][1)]

• Despatch of dividend warrants and/or definitive certificates for the New Shares

• Expected first day of dealings in the New Shares

• 4:30 pm on Thursday, 26 May 2016 Thursday, 2 June 2016 Thursday, 2 June 2016

• (subject to the proper receipt of

• definitive certificates for the New

• Shares by the relevant Shareholders)

Notes:

• (1) If a Typhoon Signal No. 8 or above is hoisted or a Black Rainstorm Warning Signal is in force at or at any time prior to 4:30 pm on Thursday, 26 May 2016, the closing time for returning the Election Form and Revocation Notice will be extended. Further information is set out in paragraph 4 of the Appendix of this circular.

• (2) References to time and dates in this circular are to Hong Kong time and dates.

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Letter from the Board

香港交易及結算所有限公司 HONG KONG EXCHANGES AND CLEARING LIMITED

(Incorporated in Hong Kong with limited liability) (Stock Code: 388)

Independent Non-executive Directors Registered Office CHOW Chung Kong* (Chairman) 12th Floor Apurv BAGRI One International Finance Centre CHAN Tze Ching, Ignatius 1 Harbour View Street Timothy George FRESHWATER Central FUNG Yuen Mei, Anita Hong Kong Rafael GIL-TIENDA John Barrie HARRISON HU Zuliu, Fred KWOK Chi Piu, Bill LEE Kwan Ho, Vincent Marshall LEUNG KO May Yee, Margaret John Mackay McCulloch WILLIAMSON

Executive Director

LI Xiaojia, Charles (Chief Executive)

• As at 6 May 2016, being the latest practicable date prior to the printing of this circular, the written

• approval of the Chief Executive of Hong Kong in respect of Mr Chow's chairmanship under Section 69 of the Securities and Futures Ordinance is pending.

11 May 2016

Dear Shareholders,

SCRIP DIVIDEND SCHEME IN RELATION TO THE FINAL DIVIDEND FOR THE YEAR ENDED 31 DECEMBER 2015

At the annual general meeting held on 28 April 2016, the Shareholders approved the payment of the final dividend of $2.87 per Share for the year ended 31 December 2015, as recommended by the Board, which will be payable in cash with a scrip alternative to the Shareholders whose names appeared on the Company’s register of members on the Record Date. Pursuant to the Scrip Dividend Scheme and subject to the terms set out in this circular, the eligible Shareholders have the right to elect to receive the Final Dividend in New Shares instead of in cash, or partly in New Shares and partly in cash.

To facilitate the Shareholders’ reinvestment of their dividends into Shares, the Board has approved to offer a 5% discount on the subscription price for the Shareholders who elect the scrip alternative. The Market Value for determining the scrip entitlement will be announced on the Company’s and HKEXnews websites on 17 May 2016.

In addition, the Shareholders have the right to choose to receive new Shares instead of cash for all future dividends to be paid by the Company if a scrip alternative is available to them, until they revoke such election by notice in writing to the Share Registrar.

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Letter from the Board

The scrip alternative will enable the Shareholders to increase their investment in the Company without incurring brokerage fees, stamp duty and related dealing costs. To the extent that the Shareholders elect to receive New Shares, the Company will benefit by retaining the cash as working capital which would otherwise be payable by way of dividends.

An Election Form is enclosed with this circular for use by the Shareholders who wish to receive the Final Dividend wholly or partly in New Shares instead of in cash and, where applicable, to make a Permanent Election. No Election Form is sent to those Shareholders (i) who have previously made the Permanent Election (instead a Revocation Notice is enclosed with this circular for their use, if applicable) or (ii) whose registered addresses are in the United States.

The procedures and conditions which apply to the Scrip Dividend Scheme and the actions which should be taken by the Shareholders who wish to participate or withdraw from participating in the Scrip Dividend Scheme are set out in the Appendix of this circular. Please read this circular, in particular, the Appendix carefully to ascertain the action you need to take.

No action is required by the following Shareholders:

• (A) Shareholders who have not made a Permanent Election and wish to receive the Final Dividend in cash only; and

• (B) Shareholders who have made a Permanent Election and do not intend to revoke it in order to receive the Final Dividend in cash.

If you are a non-registered Shareholder, ie, your Shares are held through an intermediary (for example, a bank, a custodian or a securities broker) or registered in the name of your nominee, you will not receive the Election Form or Revocation Notice. If you wish to (i) receive New Shares instead of cash, in whole or in part, in respect of the Final Dividend, (ii) receive new Shares instead of cash in respect of all future dividends to be paid by the Company or (iii) revoke your Permanent Election, please contact your intermediary or nominee directly.

Whether or not it is to your advantage to elect to receive New Shares instead of cash, in whole or in part, in respect of the Final Dividend and, where applicable, to receive new Shares instead of cash in respect of all future dividends to be paid by the Company, will depend upon your own individual circumstances. The decision in this regard, and all effects resulting from your decision are solely your responsibility and the Company does not accept any responsibility for your decision. If you are in any doubt as to what to do, you should consult an exchange participant or other licensed securities dealer, bank manager, solicitor, certified public accountant or other professional adviser. Shareholders who are trustees are recommended to take professional advice as to whether an election to receive New Shares is within their powers and the effect of such election having regard to the terms of the relevant trust instrument.

If you have any queries in relation to the Scrip Dividend Scheme, please contact the Share Registrar at +852 2862 8555.

Yours faithfully, On behalf of the Board Joseph Mau Company Secretary

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Appendix

1. DETAILS OF THE SCRIP DIVIDEND SCHEME

1.1 Options

Under the Scrip Dividend Scheme, the Shareholders have the following alternative choices in respect of the Final Dividend. These choices are to receive the Final Dividend:

• (a) in cash; or

• (b) by way of an allotment of New Shares at the Market Value (except for adjustments for fractions) equal to the total amount of the Final Dividend that such Shareholder would otherwise be entitled to receive in cash; or

• (c) partly in cash and partly in New Shares.

For the purpose of determining the Shareholders’ respective entitlements to the Final Dividend, the Company’s register of members was closed from Thursday, 5 May 2016 to Friday, 6 May 2016 (both dates inclusive). The latest time by which transfers were accepted for registration for entitlement to the Final Dividend was 4:30 pm on Wednesday, 4 May 2016.

1.2 Market Value

The Market Value for the issue of each New Share will be calculated as an amount equal to 95% of the average closing price per Share as quoted on the Stock Exchange for the five (5) consecutive trading days commencing on 11 May until 17 May 2016 (both dates inclusive). The Market Value will be published on the Company’s and HKEXnews websites after the close of business on Tuesday, 17 May 2016.

The exact number of New Shares to which a Shareholder electing a scrip alternative is entitled will be determined based on the published Market Value.

1.3 Basis of Allotment of New Shares

The number of New Shares which a Shareholder electing a scrip alternative will receive in respect of the Final Dividend that he/she is entitled will be calculated as follows:

Number of New Shares to be received (rounded down to the nearest whole number) = Number of registered Shares held on Record Date for which election for New Shares is made X	Final Dividendper Share($2.87)
	Average closing price per Share for the five consecutive trading days commencing on 11 May until 17 May 2016 (both dates inclusive) X 95%

Fractional entitlements to the New Shares will not be issued and the residual dividend entitlement, if any, will be paid in cash (rounded down to the nearest cent) to the relevant Shareholders.

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Appendix

2. ELECTION FORM

An Election Form is enclosed with this circular for use by the Shareholders who wish to receive the Final Dividend wholly or partly in New Shares instead of in cash. The Election Form also allows the Shareholders to permanently elect to receive all future dividends in the form of new Shares in the event that a scrip alternative is offered by the Company. No Election Form is sent to those Shareholders (i) who have previously made the Permanent Election or (ii) whose registered addresses are in the United States.

Please read carefully the instructions below and the instructions printed on the Election Form.

2.1 Final Dividend Election

The instructions as set out in this paragraph and paragraph 2.2 below are only applicable to those Shareholders who have not previously made the Permanent Election. If you have already made the Permanent Election, please read carefully the instructions set out in paragraph 3 below.

(a) To receive cash only

If you wish to receive the Final Dividend in cash only, no action is required. Please DO NOT return the Election Form.

(b) To receive New Shares only

If you wish to receive the Final Dividend in New Shares only, please SIGN, DATE and RETURN the Election Form as soon as possible so as to enable it to be received by the Share Registrar before the Closing Time. Late submissions of the Election Form will not be accepted.

(c) To receive partly cash and partly New Shares

If you wish to receive the Final Dividend partly in cash and partly in New Shares, please ENTER in Box C of the Election Form the number of Shares registered in your name on the Record Date for which you wish the Final Dividend to be paid to you in New Shares. Please SIGN, DATE and RETURN the Election Form as soon as possible so as to enable it to be received by the Share Registrar before the Closing Time. Late submissions of the Election Form will not be accepted.

If you do not specify the number of Shares for which you wish to receive the Final Dividend in New Shares or if your specified number is greater than your registered holding on the Record Date, in your signed and returned Election Form, you will be deemed to have elected to receive New Shares only in respect of ALL the Shares registered in your name on the Record Date, and you will receive the Final Dividend in New Shares only.

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Appendix

2.2 Permanent Election

If you also wish to make a Permanent Election (ie, choose to receive new Shares instead of cash permanently for all future dividends to be paid by the Company after the Final Dividend), please insert a tick (✔) in Box D of the Election Form, and then SIGN, DATE and RETURN the Election Form as soon as possible so as to enable it to be received by the Share Registrar before the Closing Time. Late submissions of the Election Form will not be accepted.

Please note that you cannot choose to receive your future dividend entitlements partly in cash and partly in new Shares. Therefore, if you insert a tick (✔) in Box D of the Election Form, unless and until you revoke your Permanent Election by notice in writing to the Share Registrar, you will receive new Shares only in respect of all future dividends to be paid by the Company for which a scrip alternative is offered by the Company. The Company will not accept any special instructions from the Shareholders given in the Election Form. No election form will be sent to you if you have made the Permanent Election until such election is revoked by you.

Please note that if the Election Form is not completed correctly and/or not received by the Share Registrar before the Closing Time, all the Final Dividend in respect of your shareholding will be paid in cash only, and the Permanent Election (if any) that you may have made in that Election Form will have no effect.

3. REVOCATION NOTICE

A Revocation Notice instead of the Election Form is enclosed with this circular for use by those Shareholders who have previously made the Permanent Election. Please read carefully the instructions below and the instructions printed on the Revocation Notice.

(a) To receive New Shares only

If you wish to receive the Final Dividend in New Shares only, no action is required. Please DO NOT return the Revocation Notice.

(b) To receive cash only

If you wish to receive the Final Dividend in cash only, you have to revoke your Permanent Election. Please SIGN, DATE and RETURN the Revocation Notice as soon as possible so as to enable it to be received by the Share Registrar before the Closing Time. Late submissions of the Revocation Notice will not be accepted.

(c) To receive partly cash and partly New Shares

If you wish to receive the Final Dividend partly in cash and partly in New Shares, please ENTER in Box 3 of the Revocation Notice the number of Shares registered in your name on the Record Date for which you wish the Final Dividend to be paid to you in New Shares. Please SIGN, DATE and RETURN the Revocation Notice as soon as possible so as to enable it to be received by the Share Registrar before the Closing Time. Late submissions of the Revocation Notice will not be accepted.

8

Appendix

If your specified number is greater than your registered holding on the Record Date in your signed and returned Revocation Notice, you will be deemed to have elected to receive New Shares only in respect of ALL the Shares registered in your name on the Record Date, and you will receive the Final Dividend in New Shares only.

Please note that once you sign and return the Revocation Notice, any Permanent Election you have previously made will be voided and have no effect. However, if your Revocation Notice is not completed correctly and/or not received by the Share Registrar before the Closing Time, all the Final Dividend in respect of your registered holding will be paid in New Shares in accordance with the Permanent Election that you have made.

4. HOW AND WHEN TO RETURN YOUR ELECTION FORM OR REVOCATION NOTICE

If you need to return an Election Form or a Revocation Notice (as the case may be), you must complete it in accordance with the instructions printed on it and return it by post (using the enclosed prepaid envelope) or by hand as soon as possible to the Share Registrar so as to enable it to be received before the Closing Time.

The Closing Time will be extended, as the case may be, in accordance with (a) or (b) below if a Typhoon Signal No. 8 or above is hoisted, or a Black Rainstorm Warning Signal is in force in Hong Kong:

• (a) at any time before 12:00 noon on Thursday, 26 May 2016. In such a case, the closing time for the return of the Election Form and Revocation Notice will be extended to 5:00 pm on the same business day; or

• (b) at any time between 12:00 noon and 4:30 pm on Thursday, 26 May 2016. In such a case, the closing time for the return of the Election Form and Revocation Notice will be extended to 4:30 pm on the next business day (excluding Saturday) where none of the above signals is hoisted or in force at any time between 9:00 am and 4:30 pm.

No acknowledgement of receipt of the Election Form or Revocation Notice will be issued. No election or revocation in respect of the Final Dividend may, after the relevant Election Forms or Revocation Notices are signed and returned to the Share Registrar in accordance with the instructions printed on them, be in any way withdrawn, revoked, superseded or altered.

5. CONDITION OF THE SCRIP DIVIDEND SCHEME

The Scrip Dividend Scheme is conditional upon the SFC granting the listing of, and permission to deal in, the New Shares to be issued pursuant to the Scrip Dividend Scheme. If this condition is not satisfied, the Final Dividend will then be paid wholly in cash.

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Appendix

6. EFFECT OF THE SCRIP DIVIDEND SCHEME

Shareholders should note that the New Shares to be issued under the Scrip Dividend Scheme may give rise to disclosure requirements under the provisions of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). Shareholders who are in any doubt about how these provisions may affect them as a result of the issue of the New Shares under the Scrip Dividend Scheme are recommended to seek their own professional advice.

7. SHAREHOLDERS RESIDING OUTSIDE HONG KONG

No Shareholder receiving a copy of this circular, an Election Form or a Revocation Notice in any territory outside Hong Kong may treat the same as an invitation to participate in the Scrip Dividend Scheme unless in that relevant territory such invitation could lawfully be made to that Shareholder without the Company having to comply with any registration or other legal requirements, governmental or regulatory procedures or any other similar formalities.

Shareholders with registered addresses in the United States appearing on the Company’s register of members on the Record Date (“Excluded Shareholders”) are not permitted to participate in the Scrip Dividend Scheme and will receive the Final Dividend wholly in cash. The Board has made enquiries with its legal advisers in respect of the above jurisdiction and, on the basis of the results of such enquiries, has considered the exclusion of the Excluded Shareholders to be necessary and expedient pursuant to Rule 13.36(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. No Election Form or Revocation Notice is sent to the Excluded Shareholders.

Notwithstanding the enquiries made by the Company with its legal advisers, it is the responsibility of the Shareholders with a registered address outside Hong Kong or otherwise residing outside Hong Kong to consult their professional advisers as to whether they are permitted to receive New Shares under the Scrip Dividend Scheme or if any governmental or other consent is required or other formalities need to be observed, the taxation consequences of their decision and whether there are any restrictions on their handling of any New Shares so acquired (such as the sale of them). Overseas Shareholders residing in a jurisdiction where their participation in the Scrip Dividend Scheme is not permitted under the law of that place will be deemed to have received this circular, an Election Form or a Revocation Notice for information only.

8. LISTING AND DEALINGS

The Company has applied to the SFC for the listing of, and permission to deal in, the New Shares. It is expected that the dividend warrants and/or, subject to the SFC’s approval of the above application, definitive certificates for the New Shares will be despatched by ordinary mail to the respective Shareholders concerned at their own risk on Thursday, 2 June 2016. The New Shares will, on issue, rank equally in all other respects with the existing Shares save that they will not be eligible for the Final Dividend.

Subject to the proper receipt of definitive certificates for the New Shares by the relevant Shareholders, dealings in the New Shares on the Stock Exchange are expected to commence on Thursday, 2 June 2016.

10

Appendix

Subject to the granting of the listing of, and permission to deal in, the New Shares on the Stock Exchange, the New Shares will be accepted as eligible securities by Hong Kong Securities Clearing Company Limited for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the New Shares on the Stock Exchange or such other date as determined by Hong Kong Securities Clearing Company Limited. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. Shareholders should seek the advice of their licensed securities dealers or other professional advisers for details of these settlement arrangements and how such arrangements will affect their rights and interests.

The Shares are listed, and dealt in, on the Stock Exchange. There is no other stock exchange on which the Shares are listed or dealt in or on which listing or permission to deal is being or proposed to be sought.

9. GENERAL

The New Shares issued to the Shareholders pursuant to an election to receive some or all of their Final Dividend in New Shares may be allocated in odd lots (of fewer than a board lot of 100 Shares). No special dealing arrangements will be put in place by the Company to facilitate the trading or disposal of the New Shares to be issued in odd lots. Shareholders should be aware that odd lots usually trade at a discount to the price of board lots.

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