Commencing 1 January 2013, issuers with securities listed on the Hong Kong Stock Exchange will be required to disclose price-sensitive information to the public in accordance with the new Part XIVA of the Securities and Futures Ordinance (the SFO).
The general obligation under the new SFO provisions is for a listed corporation to disclose "inside information" to the public as soon as reasonably practicable after the information comes to—or ought reasonably to have come to—the knowledge of an officer of the corporation. Directors, company secretaries and managers will be liable if a corporation's breach is due to their intentional, reckless or negligent conduct or if they failed to take reasonable measures to prevent the breach.
Currently, Hong Kong-listed issuers are subject to a general disclosure obligation under the Hong Kong Stock Exchange's listing rules. The Exchange's enforcement powers are, however, relatively limited. Under the new statutory regime, a person who is in breach of a disclosure requirement may be liable to pay compensation by way of damages to others who have suffered pecuniary losses as a result. Hong Kong's Market Misconduct Tribunal will also have the power to make a broad range of orders including imposing regulatory fines in some circumstances and disqualifying persons from company management or from transacting in certain financial products in Hong Kong.
Earlier this year, the Securities and Futures Commission published guidelines on disclosure of information under the new provisions.
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