The Securities and Futures Commission (SFC) published the Consultation Paper proposing enhancements to the Securities and Futures (Stock Market Listing) Rules (SMLR) for IPO cases and post-IPO matters. These amendments aim to improve regulatory efficiency in Hong Kong’s listing market and provide better protection for investors against potential financial harm.
The key proposed enhancements to the SMLR are as follows:
IPO Cases: The SFC would be empowered to require a listing applicant to meet continuing disclosure obligations post-listing without objecting to the listing. This would involve adding a provision to the SMLR to clarify that listing conditions can remain effective after the listing, allowing some applications to proceed more quickly and enhancing transparency through a tailored disclosure-based approach.
Post-IPO Matters: The SFC proposes a less disruptive alternative to suspension. In addition to the existing power to suspend dealings in securities when necessary, the SFC could impose post-listing conditions on a listed issuer, requiring more transparent and complete disclosures to ensure investors can make informed decisions.
Trading Suspensions: The SFC’s proposed changes aim to reduce suspension times by streamlining the application process for trading resumption. This would involve simplified procedures and delegating decision-making power to senior executives in uncontroversial cases.
Merits Review: Issuers aggrieved by the SFC’s decisions would have the right to seek a full merits review by the Securities and Futures Appeals Tribunal, providing an independent safeguard to ensure that SFC regulatory decisions are reasonable, proportionate, and fair.
Please read the Consultation Paper and email any comments you may have on or before Friday 25 April 2025 along with your membership number and contact details to research@hkcgi.org.hk. Depending on views received by the Institute, if any, the Institute may consider making a submission.