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SEHK and the SFC today jointly announced the release of their consultation paper on the Regulation of Sponsors and Independent Financial Advisers.

Publication: M2 Presswire
Publication Date: 30-MAY-03 		Format: Online - approximately 2045 words
Delivery: Immediate Online Access

Article Excerpt
M2 PRESSWIRE-30 May 2003-HKEx: SEHK and the SFC today jointly announced the release of their consultation paper on the Regulation of Sponsors and Independent Financial Advisers(C)1994-2003 M2 COMMUNICATIONS LTD

RDATE:05302003

The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx) and the Securities and Futures Commission (the SFC) have jointly published a Consultation Paper on Regulation of Sponsors and Independent Financial Advisers (the Consultation Paper).

Summary

The Consultation Paper released today represents a joint proposal by the Exchange and the SFC to introduce measures to tighten the regulation of IPO intermediaries.

The core proposals in the consultation paper will establish a common regime, administered by the Exchange, to establish the acceptability of corporate finance advisers who wish to act as sponsors or Independent Financial Advisers (IFAs) whether to prospective applicants or listed issuers on either the Main Board or GEM. The proposed regime will place emphasis on the experience of individuals but also impose obligations on them to ensure that sponsor and IFA work is performed to acceptable standards. Implementation will also see the introduction of the Code of Conduct for Sponsors and Independent Financial Advisers which provides updated guidance to clarify the responsibilities of sponsors and IFAs.

Other proposals for consideration include a proposed requirement for a declaration in a prospectus by the sponsor and lead underwriter about the due diligence work they have performed in providing the Exchange with assurances on the completeness and accuracy of the prospectus. This proposal, which draws on a well established US requirement, may be regarded as a controversial development. Nevertheless the Exchange and the SFC believe that for improvements to be made in the Hong Kong market it is essential that ideas such as this can be exposed to facilitate consideration and debate by the market. A...

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