Corporate Finance Partner Peter Cheng was recently interviewed by Reuters for a topical article entitled ‘Explainer: UBS appeals IPO sponsor ban, tests HK's crackdown on misconduct’.
Swiss banking giant UBS Group AG is set to appeal against an unprecedented 18-month ban on leading IPOs in Hong Kong, imposed, sources say, for its role in the listing of a firm which subsequently collapsed. The case, which also involves Standard Chartered PLC, is a test of the Securities and Futures Commission’s (SFC) increased scrutiny of IPO practices in a city where helping firms list is particularly big business for banks.
This column outlines the UBS case, before looking at the role of the sponsor and explaining why the SFC is cracking down on IPO sponsors.
The article states that sponsors must conduct due diligence to assess the company being listed, and are responsible for assuring potential investors that its IPO prospectus is accurate. Following a string of scandals among newly traded companies earlier this decade, the SFC tightened oversight. Peter commented “The SFC felt that there were too many incidents of market misconduct, leading to an ever-expanding enforcement workload, and it was necessary to find ways to regulate listing more effectively”.
The piece concludes by taking a look at why the Hong Kong IPO market is so important.
Read the full article here. Reuters is the world’s largest international multimedia news provider, reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via the world's media organizations, and directly to consumers at Reuters.com