Continuing Training Requirements and Record Keeping for Directors Post-Listing

The SFC’s enforcement division issued 17 sanctions against listed company directors in 2024 for failures in corporate governance, with a significant portion stemming from inadequate continuing training and deficient record-keeping practices. This regulatory intensity is not an anomaly but a structural shift. With the HKEX’s enhanced Listing Rules amendments effective 1 January 2025, directors of Main Board and GEM issuers now face codified, stricter obligations under Chapter 3 of the Main Board Listing Rules and Chapter 5 of the GEM Rules. The era of treating director training as a perfunctory checkbox exercise is over. For the CFO, company secretary, and compliance officer, the cost of non-compliance now extends beyond a regulatory reprimand to potential directorship disqualification and personal liability. This article dissects the precise 2025 requirements, the mandatory record-keeping standards, and the practical implications for directors and their advisors.

The Codified 2025 Training Mandate

The HKEX’s 2025 Listing Rule amendments have transformed director continuing training from a recommended best practice into a binding obligation. The core requirement is unambiguous: every director of a listed issuer must undergo continuous professional development (CPD) each financial year. The rules are not aspirational; they are prescriptive, with specific hourly minima and defined subject matter scope.

Minimum Hourly Requirements and Subject Matter Scope

Under Main Board Listing Rule 3.08A, each director must complete no fewer than 15 hours of CPD per financial year. For GEM issuers, the equivalent requirement under GEM Rule 5.05A is identical. This is a material increase from the previous non-binding guidance of 8-10 hours annually. The 15-hour floor applies to all directors, including independent non-executive directors (INEDs) and non-executive directors (NEDs), who historically received less structured training.

The subject matter is not left to the director’s discretion. The SFC’s Code of Conduct for Persons Licensed by or Registered with the SFC (paragraph 12.1) and the HKEX’s Guidance Letter HKEX-GL94-18 (updated January 2025) specify that CPD must cover three mandatory pillars:

• Regulatory Updates: Amendments to the Listing Rules, the Securities and Futures Ordinance (Cap. 571), and the Companies Ordinance (Cap. 622).
• Financial Reporting and Internal Controls: IFRS/HKFRS updates, audit committee responsibilities, and internal control frameworks under COSO 2013.
• Industry-Specific Risk Management: ESG reporting (mandatory under Appendix 27 of the Main Board Rules), cybersecurity governance, and anti-corruption compliance.

A director who completes 15 hours of general management seminars but zero hours on regulatory updates has not satisfied the requirement. The burden of proof for compliance rests with the issuer’s board and company secretary.

Distinctions Between Executive, Non-Executive, and INEDs

The rule applies uniformly on a per-director basis, but the practical implementation differs. Executive directors typically have access to internal training programs provided by the issuer’s compliance department. NEDs and INEDs, who may not have the same institutional access, must independently source and document their CPD. The issuer is obligated under Main Board Rule 3.09 to facilitate this access, including paying reasonable costs for external training programs.

A 2024 survey by the Hong Kong Institute of Chartered Secretaries (HKICS) found that 42% of INEDs reported difficulty in identifying relevant, high-quality CPD programs that meet the specific regulatory requirements. This has created a market for specialist training providers, with the HKEX itself offering a Director Training Programme (DTP) that provides 6 hours of CPD credit per session. However, the DTP only covers regulatory updates, not the full 15-hour requirement.

Exemptions and Transitional Provisions

Exemptions are narrow. Directors who have been in office for less than 12 months at the end of the financial year are exempt from the 15-hour requirement for that year. Directors retiring by rotation who are re-elected within the same financial year do not receive a fresh exemption. The HKEX has confirmed, via Listing Decision HKEX-LD2024-12, that a director who resigns and is re-appointed within 30 days is considered continuous and must meet the full requirement.

For directors appointed mid-year, the requirement is pro-rated. A director appointed on 1 October 2025, for a 31 December 2025 year-end, must complete 3.75 hours of CPD (15 hours × 3/12 months). The pro-rata calculation is based on calendar months, not days, and the HKEX expects issuers to maintain a clear record of the appointment date.

Record-Keeping: The New Standard of Proof

The 2025 amendments do not merely mandate training; they require forensic-level record-keeping. The HKEX’s enforcement division has made clear that the absence of contemporaneous records is treated as evidence of non-compliance. The burden of proof has shifted: the issuer must demonstrate compliance, not merely assert it.

Mandatory Documentation Under Listing Rule 3.10

Main Board Listing Rule 3.10 now explicitly requires each issuer to maintain a CPD register for each director. The register must include, at minimum:

• The date, duration, and title of each training session.
• The provider’s name and qualifications (e.g., law firm, accounting firm, HKEX, SFC).
• A brief summary of the topics covered, cross-referenced to the three mandatory pillars.
• A signed confirmation from the director that they attended and completed the session.

The register must be updated within 14 days of the training session and retained for no fewer than 7 years from the end of the financial year to which it relates. This retention period aligns with the statute of limitations under the Securities and Futures Ordinance for regulatory actions.

The HKEX has indicated, through its enforcement manual, that it will request the CPD register during routine reviews and thematic inspections. In 2024, the HKEX conducted 23 thematic inspections focused on director training compliance, and in 12 cases, the issuer was unable to produce a complete register. Those 12 issuers received formal warning letters, and in 3 cases, the HKEX referred the matter to the SFC for potential disciplinary action.

Electronic Systems vs. Physical Records

The HKEX does not prescribe the format of the CPD register. Physical records, maintained in a bound ledger, are technically compliant. However, the practical reality of a 7-year retention period and the need for immediate production upon request makes electronic systems the only viable option for most issuers.

The recommended approach is a cloud-based compliance management system with version control and audit trail functionality. The system should:

• Automatically calculate pro-rata requirements for mid-year appointments.
• Send automated reminders to directors 30 days before the end of the financial year if their CPD hours are below 75% of the target.
• Generate a PDF report for the annual board review and the HKEX’s Annual Return (Form A1).

Issuers using the HKEX’s ESEF (Electronic Submission of Financial Reports) platform can link the CPD register to the director’s profile for seamless reporting. This integration is not mandatory but is strongly recommended by the SFC in its 2024 Annual Report.

Consequences of Record-Keeping Failures

The consequences of inadequate record-keeping are severe and escalate quickly. A failure to maintain the CPD register is a breach of Listing Rule 3.10 and can result in:

• A public censure from the HKEX, which must be disclosed in the issuer’s annual report.
• A referral to the SFC for potential disciplinary action under section 213 of the Securities and Futures Ordinance, which can lead to disqualification from serving as a director of any listed company for up to 5 years.
• In cases of intentional falsification, criminal liability under section 384 of the Securities and Futures Ordinance, with a maximum penalty of HKD 1,000,000 and imprisonment for 2 years.

In 2023, the SFC disqualified three directors of a Main Board listed company for 3 years each for knowingly submitting false CPD records. The directors had claimed attendance at training sessions that never occurred. The SFC’s investigation uncovered the fraud through cross-referencing the provider’s attendance logs with the issuer’s CPD register.

Practical Implementation for Issuers and Directors

Compliance with the 2025 requirements demands a structured, year-round approach. The annual board calendar must now include specific milestones for director training, not just the annual general meeting and financial reporting deadlines.

Board-Level Oversight and the Company Secretary’s Role

The board, as a whole, is responsible under Main Board Rule 3.08 for ensuring compliance with all Listing Rules, including the CPD requirements. The company secretary, appointed under Main Board Rule 3.28, is the designated officer responsible for the day-to-day management of the CPD program. The company secretary must:

• Prepare an annual CPD plan for board approval at the first board meeting of the financial year.
• Monitor each director’s progress against the plan on a quarterly basis.
• Report to the board at each quarterly meeting on the status of CPD compliance.

The annual CPD plan should identify specific training sessions, their dates, and the provider. The plan should also include a budget, which the board must approve. The HKEX expects the budget to be reasonable and sufficient to cover the full 15-hour requirement for each director. In 2024, the average cost per director for external CPD was HKD 18,000, according to a survey by the Hong Kong Institute of Directors.

Selecting Approved Training Providers

The HKEX does not maintain a list of approved CPD providers. However, the SFC’s Code of Conduct (paragraph 12.2) and the HKEX’s Guidance Letter HKEX-GL94-18 specify that the provider must be a “qualified person” with demonstrable expertise in the subject matter. Acceptable providers include:

• Law firms and barristers’ chambers with a dedicated securities and corporate governance practice.
• Accounting firms (Big Four and mid-tier) with a listed issuer advisory practice.
• The HKEX’s own Director Training Programme (DTP).
• The SFC’s training seminars.
• Recognized professional bodies (HKICS, HKICPA, HKiOD).

Training provided by the issuer’s own in-house legal or compliance department is acceptable, provided the department has the requisite expertise and the training is documented in the same manner as external training. The HKEX has cautioned, however, that in-house training should not constitute more than 50% of a director’s total CPD hours, to ensure exposure to external perspectives.

Cross-Border Considerations for PRC and Overseas Directors

Directors based in the PRC or other jurisdictions face additional challenges. The 15-hour requirement applies regardless of the director’s physical location. Virtual training sessions are acceptable, provided they are live (not pre-recorded) and include a mechanism for verifying attendance, such as a time-stamped login and a post-session quiz.

For PRC-based directors, the training must cover Hong Kong-specific regulations, not just PRC securities laws. The SFC has issued a specific circular (SFC Circular 2024-15) reminding issuers that PRC-based directors must complete training on the differences between the Hong Kong Listing Rules and the PRC Securities Law, particularly regarding connected transactions, disclosure obligations, and insider dealing.

The 2026 Horizon: Anticipated Tightening

The regulatory trajectory is clear. The HKEX and SFC are not finished with director training reform. Market participants should expect further tightening in 2026, based on the consultation paper issued in October 2024.

Proposed Mandatory Annual Certification

The HKEX’s October 2024 consultation paper proposes that each director be required to sign an annual certification, filed with the HKEX, confirming that they have completed the required CPD hours. This certification would be separate from the issuer’s CPD register and would be a public document. The certification would be subject to the same penalties for false statements as the annual return under the Companies Ordinance.

The consultation period closed on 31 January 2025, and the HKEX is expected to publish its conclusions and final rules by mid-2025, with an effective date of 1 January 2026. If adopted, this would represent a significant escalation in personal accountability for directors.

Integration with the New ESG Reporting Regime

The mandatory ESG reporting requirements under Appendix 27 of the Main Board Rules, effective for financial years commencing on or after 1 January 2025, include a specific requirement for directors to receive training on ESG governance. The HKEX’s ESG Reporting Guide (updated November 2024) states that the board must disclose, in the ESG report, the number of hours of ESG-specific training completed by each director.

This creates a dual-reporting obligation: the general CPD register under Listing Rule 3.10 and the ESG-specific disclosure under Appendix 27. Issuers must ensure their CPD register captures ESG training hours separately, to facilitate this disclosure. Failure to do so will result in a qualified audit opinion on the ESG report.

Actionable Takeaways

1. Audit existing CPD records immediately — any director with fewer than 15 hours documented for the current financial year must complete the shortfall by the year-end, with a signed confirmation from each director.
2. Implement a cloud-based CPD register by Q2 2025 — the register must capture date, duration, provider, topics, and director signature, with a 7-year retention period and immediate production capability.
3. Ensure the annual CPD plan is board-approved at the first board meeting of the financial year — the plan must include a budget, specific training sessions, and a quarterly monitoring mechanism.
4. Verify that all PRC-based directors have completed training on Hong Kong-specific regulations — the SFC Circular 2024-15 requires this, and the issuer must maintain separate documentation for this training.
5. Prepare for the 2026 mandatory annual certification — begin drafting the certification template and integrate it into the director onboarding and annual review process now, before the rules take effect.