The Hong Kong Securities and Futures Commission published a consultation paper in May with various proposals relating to the role of sponsors in new listings of equity securities.
Last year the Commission issued a report describing a number of deficiencies in sponsor work that it had identified during a theme inspection. Earlier this year, it revoked a sponsor's license and fined it HKD 42 million, citing the sponsor's failure to fulfill its professional duties in relation to a listing application.
(1) The recent proposals have been the subject of some controversy in Hong Kong. They range over several areas:
(2) Prospectus liability for sponsors
(3) Publication of draft listing documents
(4) Sponsor obligations to ensure that issuers and directors fulfill their responsibilities and to notify regulators of non-compliance
(5) Issuers appointing more than one sponsor
(6) Sponsor due diligence responsibilities and the extent to which sponsors may rely on expert opinions
(7) Fee structures
(8) Sponsor qualifications
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