On December 12, 2012, the Securities and Futures Commission (SFC) published its eagerly anticipated consultation conclusions concerning the regulation of IPO sponsors (the “Consultation Conclusions”). While a more detailed Client Alert analyzing the Consultation Conclusions will be forthcoming, we have highlighted below the top five things you need to know now about the Consultation Conclusions.
1. PROSPECTUS LIABILITY -
One of the most closely watched aspects of the SFC’s consultation paper published in May of this year was the proposal relating to civil and criminal prospectus liability for sponsors. In the Consultation Conclusions, the SFC reiterated its view that the existing prospectus liability provisions in the Companies Ordinance (Cap. 32) already apply to sponsors, but acknowledged that there were diverging views and a lack of case law on the issue. Accordingly, the SFC will recommend to the Hong Kong Government that the applicable provisions in the Companies Ordinance with respect to civil liability (Section 40) and criminal liability (Sections 40A and 342F) be clarified so that sponsor firms have civil and criminal liability for untrue statements in prospectuses.
Please see full alert below for more information.
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