In its Quarterly Report released today, the Securities and Futures Commission (SFC) summarises key regulatory developments in the April to June 2013 reporting period.
On regulatory reforms, the SFC:
- worked with The Stock Exchange of Hong Kong Limited (SEHK) on amendments to the Listing Rules relating to the new requirements for IPO (initial public offering) sponsors, which will become effective on 1 October 2013;
- began in May a three-month consultation on proposals concerning the professional investor regime and the client agreement requirements in the Code of Conduct
(Note 1); - issued consultation conclusions on proposals to enhance the regulatory regime for non-corporate entities which are listed on the SEHK;
- introduced to the Legislative Council the Securities and Futures (Amendment) Bill 2013, which is mainly concerned with over-the-counter derivatives and their regulation pursuant to agreements reached amongst the G20 countries following the global financial crisis; and
- finalised important disclosure enhancements to be made in investment-linked assurance schemes’ product key facts statements.
On enforcement:
- in a landmark ruling in April, the Court of Final Appeal dismissed the appeal of Tiger Asia Management LLC and three of its officers against legal proceedings brought by the SFC under section 213 of the Securities and Futures Ordinance;
- the Cheung Kong parties (Note 2) agreed to unwind the sale of The Apex Horizon’s hotel room units by reimbursing deposits and any part payments together with interest and reasonable expenses to all purchasers. This followed the SFC’s decision that the sale amounted to an invitation to acquire an interest in or to participate in a collective investment scheme;
- the SFC obtained court orders to appoint provisional liquidators for Salisbury Securities Limited to investigate its affairs and to verify clients’ claims and assets following a restriction notice (Note 3);
- commenced legal proceedings against the founder and former Chairman of First Natural Foods Holdings Limited over alleged embezzlement of corporate assets and false accounting; and
- successfully prosecuted two retail investors for market manipulation activities and disciplined 14 licensees, including four corporations and 10 licensed representatives. The SFC’s prosecutions and disciplinary action resulted in total fines of over $7.4 million.
The report is available under "Published resources> Corporate publications> Quarterly reports" of the SFC website.
Notes:
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- The Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission
- Comprising Cheung Kong (Holdings) Limited, Cheung Kong Property Development Limited, Pearl Wisdom Limited and Horizon Hotels & Suites Limited.
- The restriction notice prohibited Salisbury Securities Limited from carrying on regulated activities and dealing with client assets until further notice.