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SFC consultation on proposals to enhance the regulatory regime for non-corporate listed issuers

The Securities and Futures Commission (SFC) is consulting on proposals to enhance the regulatory regime for non-corporate entities that are listed on The Stock Exchange of Hong Kong Ltd (SEHK). You have until 24 December 2012 to make a submission on the proposals.

The proposals seek to apply the same level of regulation and market transparency to all listed entities, regardless of their legal form. Currently, some provisions in Parts XIII to XV of the Securities and Futures Ordinance (SFO) (which relate to market misconduct and disclosure of interests) apply only to listed entities that are in corporate form. In 2010, the SFC consulted on proposals to extend Parts XIII to XV of the SFO to listed collective investment schemes (CIS). The current proposals build on that consultation and also include other vehicles such as business trusts and partnerships that may be listed on SEHK.

Key elements of the proposals include:

  • amending the provisions of Parts XIII to XV of the SFO to expressly cover all forms of listed entities, with an exclusion for listed open-ended CIS from the disclosure of interests regime;
  • extending the SFC’s powers to investigate and take action against breaches under Parts VIII and X of the SFO to cover all forms of listed entities;
  • extending the statutory disclosure requirement for price-sensitive information regarding listed corporations under Part XIVA of the SFO to all forms of listed entities (Part XIVA will come into effect on 1 January 2013). Listed CIS (primarily REITs and ETFs) are currently subject to various non-statutory disclosure requirements under the relevant SFC product codes;
  • 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 entities whose only listed securities are debentures from the disclosure of interests regime. This proposal will remove the current need for such entities to apply to the SFC for an exemption from the disclosure of interests regime.

Key Contacts

Scott Carnachan

Consultant | Financial Services

Email or call +852 2825 9265

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