SFC Looks to Enhance the Regulation of Sponsors in Hong Kong


Potential Civil and Criminal Penalties under Consideration

Against a background where Hong Kong has been the world’s leading IPO center for the third year in a row, the Hong Kong Securities and Futures Commission (SFC) has published its much-anticipated consultation paper on the regulation of sponsors. In an effort to improve the quality of listings in Hong Kong, the SFC’s proposals concern the conduct of sponsors in meeting their responsibilities in connection with new listings and aim to provide a regulatory basis for defining the expected quality of sponsor work.

One of the key proposals in the consultation paper, prospectus liability of sponsors, was first discussed in an SFC consultation in 2005 but subsequently it was considered premature to proceed at that time as the new non-statutory sponsor regime had yet to be fully implemented. In recent years, the SFC has noted in a number of cases that sponsors failed to address issues that were fundamental to the listing applications. This culminated in a HK$42 million fine and the revocation of the sponsor license for Mega Capital in April 2012.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP | Attorney Advertising

Written by:


Morrison & Foerster LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.