Last Friday, the SFC issued supplemental consultation conclusions covering prospectus liability for sponsors. The SFC has concluded that sponsors already have potential civil and criminal liability for prospectuses under the current legislation and therefore no legislative amendments are required. The supplemental consultation conclusions published last Friday send a message to the market that the SFC considers sponsors are already caught by the existing regime and it will consider bringing criminal proceedings against sponsors in appropriate circumstances where material untrue statements are made in a prospectus.
However, the SFC has also indicated that certain proposed amendments to address potential shortfalls in the existing regulatory regime identified in the 2012 consultation conclusions will not be further considered. These relate to the liability of individual employees of sponsors and the burden of proof in any enforcement action. To read the briefing prepared by our team in Hong Kong, click here.