Hong Kong regulators issue guidance to sponsors, underwriters and placing agents on GEM initial public offerings

New listings on the Growth Enterprise Market (GEM) in Hong Kong have been repeatedly in the headlines in recent years for dramatic share price increases on their listing debuts and high share price volatility in post-listing periods. This has led to regulatory concerns. The Securities and Futures Commission (SFC) has been working with the Stock Exchange to review listing policy, including a holistic review of GEM, interlinked with a review of backdoor listings, listed shells and companies with prolonged suspensions.

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New Market Abuse powers for the FCA (2)

Powers to require information from issuers, PDMRs and persons closely associated to PDMRs

The Financial Services and Markets Act 2000 (Market Abuse) Regulations 2016 (the "regulations") were passed to ensure that UK law was compatible with the Market Abuse Regulation (MAR), to give effect to those parts of MAR which required implementing legislation, and to ensure it is fully enforceable in the UK. 

This issue of #MAR_bitesize considers the new power to require information from issuers, persons discharging managerial responsibilities within issuers (PDMRs), and persons closely associated to PDMRs under section 122A of FSMA. 

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Proposed revamp of Hong Kong’s regulatory structure for decision making in listing related matters

The Hong Kong Stock Exchange (the “Stock Exchange”) and the Securities and Futures Commission (“SFC”) have jointly announced proposals to revamp the regulatory structure for making decisions in listing related matters. New committees, with equal representation by both the Stock Exchange and SFC, have been proposed with mandates to determine listing policy and to oversee decisions on listing matters which raise suitability concerns or have broader policy implications.

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Hong Kong: former responsible officer of SHKI suspended for sponsor-related failures

The Securities and Futures Commission (SFC) has suspended Mr. Eric Shum Kam Chi as a representative in all regulated activities and withdrawn approval for him to act as a responsible officer for 3 years.   As responsible officer and sponsor principal of SHKI at the relevant time, Mr. Shum was found to be responsible for deficiencies in the sponsor work of Sun Hung Kai International Limited (SHKI) relating to the listing of Sino-Life Group Limited. Continue reading

SFC says no legislative changes needed to make Sponsors liable for prospectuses

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. Continue reading

The new EU market abuse and inside information regime – an overview

The new Market Abuse Regulation has been published in the Official Journal and is directly applicable in EU countries from 3 July 2016.  The Regulation will have a significant impact on all companies with securities traded on any EU market and all EU market participants and advisers. They will need to plan well in advance to implement its changes. Continue reading

US: Supreme Court Provides New Avenue for Defendants to Challenge Securities Class Certification

On June 23, 2014, the United States Supreme Court issued a highly anticipated decision in Halliburton v. Erica P. John Fund, Inc. The Court reaffirmed the “fraud-on-the-market” doctrine, established in the 1988 Basic v. Levinson decision, that has been a cornerstone of modern securities class action litigation for the past 25 years. The Court, however, held that defendants may defeat the Basic presumption at the class certification stage through proof that any alleged misrepresentation did not impact the price of the relevant securities, a holding that will provide significant benefit to defendants in securities cases.  To read our briefing, click here.

Australia: ASIC’s report card on handling confidential information – ‘could do better’

Following the selective briefing of analysts by Newcrest in mid-2013, ASIC announced that it would sit in on communications between companies and analysts during the next reporting season.  Armed with the output of that survey, as well as interviews of listed entities and their advisers engaged in corporate transactions, ASIC has now issued its report on Australian market practice in handling confidential market-sensitive information.  Issuers, analysts and investment banks in the UK will read the findings with some interest, not least since the FCA is launching a thematic review into investment banks’ controls in respect of inside information this year. Continue reading

Australia: All-at-sea – ASIC takes aim at Mariner and its directors

ASIC’s announcement of its intention to bring civil proceedings alleging breaches of Australia’s takeover laws by Mariner Corporation Limited is a salient reminder to market participants that ASIC may seek to bring civil (and possibly even criminal) proceedings in relation to such breaches.  Market participants should not assume that a declaration of ‘unacceptable circumstances’ by the Panel, and any related orders, in relation to a breach of Australia’s takeovers laws, will necessarily be the end of the matter. Continue reading