This statement sets out the general approach taken by the Securities and Futures Commission (SFC) and The Stock Exchange of Hong Kong Limited (SEHK) to some regulatory issues noted in recent new listings and how they may deploy their respective powers under the Securities and Futures Ordinance (SFO), the Securities and Futures (Stock Market Listing) Rules (SMLR), the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited (Listing Rules) to tackle these issues in the future.
These issues mainly involve suspected arrangements to artificially satisfy the initial listing requirements or facilitate market manipulation of the shares at a later date. This may undermine the development of an open, orderly and fair market and call into question the existence of genuine investor interest1 in some initial public offerings (IPOs). Both the SFC and SEHK have concerns about the impact this may have on the quality and integrity of Hong Kong’s capital market and its reputation as an international financial centre.
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