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Hong Kong – Statutory PSI Disclosure Regime Approved.

13 May 2012

 

On April 25, 2012, the Legislative Council passed the Securities and Futures (Amendment) Bill 2011. The Bill obliges listed corporations to disclose price sensitive information (“PSI”). The Bill is intended to commence operation on January 1, 2013. 
 
Under the Bill, a listed corporation must disclose any PSI (defined as “inside information” in the Bill) to the public as soon as reasonably practicable, if (a) the information has, or ought reasonably to have, come to the knowledge of an officer of the listed corporation in the course of performing his functions as an officer of the corporation; and (b) a reasonable person, acting as an officer of the corporation, 
would consider that the information is inside information in relation to the corporation.
 
In defining PSI, the Bill proposes borrowing the concept of “relevant information” currently used in the “insider dealing” regime in the SFO. In other words, PSI will be the same set of information currently prohibited from being used for dealing in the securities of the listed corporation concerned. 
 
However, please note that the scope of the proposed definition of “inside information” in the Bill is narrower than the current definition of PSI adopted under Listing Rule 13.09. The major difference is that the latter also covers information on any major new developments in the group’s sphere of activity (i.e., Rule 13.09(1)) and any information necessary to avoid the establishment of a false market (i.e., Rule 13.09(1)(b)). 
 
The SFC and the Exchange will work to revise Listing Rule13.09 after the passage of the Bill. The tentative thinking is to incorporate those elements which are in the existing Rule 13.09 but would fall outside the scope of the statutory regime into other provisions of the Listing Rules which would not give rise to legal consequences. 
 
For a quick overview, please refer to our article: 
 

 

 

For further information, please contact:

 
Venantius Tan, Partner, Morrison & Foerster
vtan@mofo.com
 
John Moore, Partner, Morrison & Foerster
johnmoore@mofo.com
 

 

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