The Securities and Futures Commission (SFC) has begun today a one-month consultation on proposals to enhance the regulatory regime for non-corporate entities that are listed on The Stock Exchange of Hong Kong Ltd (SEHK).
The key elements of the proposals include:
- amending the provisions of Parts XIII to XV of the Securities and Futures Ordinance (SFO) regarding market misconduct and disclosure of interests to expressly cover all forms of listed entities (Note 1);
- extending the SFC’s powers to investigate and take action against breaches under Parts VIII and X to cover all listed entities, regardless of their legal form;
- extending the statutory disclosure requirement for price-sensitive information regarding listed corporations under Part XIVA of the SFO (Note 2) to all listed collective investment schemes (CIS) and other non-corporate-form listed entities;
- clarifying that, for the purposes of the SFO, the "issuer" or the "listed corporation" of a listed depository receipt is the issuer of the underlying shares or units (and not the depository bank); and
- excluding from the disclosure of interest regime entities whose only listed securities are debentures.
"Our proposals are aimed at promoting consistency of regulation and enhancing market transparency for all listed entities, whether they are companies or other types of business organisation," said Mr Ashley Alder, the SFC’s Chief Executive Officer.
Currently, some provisions in Parts XIII to XV of the SFO apply only to listed entities that are in corporate form. The market was supportive in general when in 2010, the SFC consulted on proposals to extend Parts XIII to XV of the SFO to listed CIS (Note 3). Besides corporations and CIS, other vehicles such as business trusts and partnerships may be listed on SEHK and should also be covered by these provisions.
The public is invited to submit their comments to the SFC on or before 24 December 2012. Written comments may be sent on line via the SFC site (www.sfc.hk), by email to SFOAmendments@sfc.hk, by post or by fax to 2810 5385.
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Notes:
- Other than listed open-ended CIS for the purposes of Part XV of the SFO.
- This requirement will come into effect on 1 January 2013.
- A consultation paper on: (1) the proposal to extend the application of the Codes on Takeovers and Mergers and Share Repurchases to SFC-authorized real estate investment trusts and related amendments; and (2) the proposal to extend Parts XIII to XV of the SFO to listed CIS was issued in January 2010. The conclusions were issued in June 2010. It was proposed that listed open-ended CIS would be exempted from Part XV of the SFO.