The Securities and Futures Commission (SFC) today began a one-month consultation on proposals to amend the Guidelines for the Exemption of Listed Corporations from Part XV of the Securities and Futures Ordinance (Disclosure of Interests) (the Guidelines).
The amendments would provide two additional categories for exemption under the Guidelines to cover participants of The Stock Exchange of Hong Kong Limited (SEHK) as well as clearing participants of a recognized clearing house that are themselves clearing houses (Note 1).
"These changes are necessary to provide a level playing field for market participants involved in Shanghai-Hong Kong Stock Connect (Note 2) whose roles are similar to those who are currently eligible for an exemption from disclosure obligations under Part XV of the Securities and Futures Ordinance," said Mr Ashley Alder, the SFC’s Chief Executive Officer.
Under Shanghai-Hong Kong Stock Connect, orders from eligible Mainland investors will be routed to SEHK via a securities trading service company established by the Shanghai Stock Exchange in Hong Kong. In addition, China Securities Depository and Clearing Corporation Limited (ChinaClear) will provide Mainland investors with clearing, settlement, custody and nominee services for SEHK-listed shares. The securities trading service company and ChinaClear will each come under the existing disclosure obligations under Part XV of the Securities and Futures Ordinance if they hold at least a 5% interest in an SEHK-listed company, but would be eligible for exemptions under the proposed amendments (Note 3).
The public is invited to submit their comments to the SFC on or before 17 July 2014. Written comments may be sent on line via the SFC site (www.sfc.hk), by email to AmendmentsGuidelinesPtXV@sfc.hk, by post or by fax to 2810 5385.
Notes:
- Under the proposal, the Guidelines will also be renamed "Guidelines for the Exemption of Listed Corporations and Other Persons from Part XV of the Securities and Futures Ordinance (Disclosure of Interests)".
- On 10 April 2014, the SFC and the China Securities Regulatory Commission (CSRC) jointly announced Shanghai-Hong Kong Stock Connect, a pilot programme for establishing mutual stock market access between Shanghai and Hong Kong. The Shanghai Stock Exchange and The Stock Exchange of Hong Kong Limited will enable investors in each market to trade eligible shares listed on the other market through local securities firms or brokers. Please refer to the joint announcementby the SFC and CSRC for details.
- The securities trading service company will be admitted as a participant of SEHK and China Clear will be admitted as a participant of Hong Kong Securities Clearing Company Limited (HKSCC). Services provided by the securities trading service company are similar to those provided by an SEHK participant who is an SFC-licensed person while services provided by ChinaClear are similar to those provided by HKSCC. SEHK participants who are SFC-licensed persons and HKSCC are currently exempted from the Part XV disclosure requirements if certain conditions are met.