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Hong Kong – The SFC’s Issue Of Supplement Consultation Conclusions On The Regulation Of IPO Sponsors.

22 September, 2014

 


In May 2012 the SFC issued its Consultation Paper (the 2012 Paper) on the regulation of sponsors of Hong Kong listing applications. Among other things, the SFC sought views on whether the prospectus liability provisions of the then Companies Ordinance (the CO, now known as the Companies (Winding Up and Miscellaneous Provisions) Ordinance) should be amended to make it clear that those provisions applied to the sponsors of Hong Kong listings. Responses to the paper on the issue of prospectus liability were mixed, with some arguing that changes were unnecessary as the CO liability provisions were already drafted in a manner that applied to sponsors, with others arguing the opposite. In its consultation conclusions issued in December 2012, the SFC stated that the diverging views and the lack of case law on the issue demonstrated the need to amend the CO so that it was clear that the civil and criminal prospectus liability provisions applied to sponsors. The SFC therefore proposed to implement its recommendations to clarify the CO prospectus liability of sponsors, although no specific timetable was set.

 

In an announcement issued on 22 August 2014, and notwithstanding the 2012 consultation conclusions, the SFC announced that it had reaffirmed its view that its “original position” in the 2012 Paper that sponsors are already liable for prospectuses under the existing CO. On this basis, the SFC concluded that the proposed legislative amendments to the CO need not be pursued as they would serve no purpose.

 

Skadden

 

For further information, please contact:

 

Christopher Betts, Partner, Skadden
christopher.betts@skadden.com


Edward Lam, Partner, Skadden
edward.lam@skadden.com


Alec Tracy, Partner, Skadden
alec.tracy@skadden.com


Will Cai, Partner, Skadden
will.cai@skadden.com

 

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