The Securities and Futures Commission (SFC) today began a consultation on various proposed enhancements to the Securities and Futures (Stock Market Listing) Rules (SMLR) for IPO cases and post-IPO matters, with a view to improving regulatory efficiency in Hong Kong’s listing market and providing broader protection for the investing public against imminent financial harm (Note 1).
The proposed enhancements came after the SFC completed a review into the SMLR, examining whether the existing rules equip the SFC with sufficient targeted tools to ensure and encourage both listed issuers and listing applicants to make more transparent and accurate disclosures, as well as to address misconduct.
The key proposed enhancements to the SMLR fall into four areas:
(i) for IPO cases, the SFC would be able to require a listing applicant to meet continuing disclosure obligations post-listing without objecting to a listing by adding an express provision to the SMLR to clarify that the listing conditions can continue to have effect after listing. Some listing applications may therefore be allowed to proceed more quickly and transparency be enhanced under this tailored disclosure-based approach;
(ii) for post-IPO matters, the SFC proposes to offer a less disruptive alternative to suspension. Apart from the existing power to suspend dealings in securities when the situation warrants, the SFC would be able to impose post-listing conditions on a listed issuer in appropriate cases requiring more transparent and complete disclosures to ensure that investors can make informed decisions (Note 2);
(iii) for trading suspensions, shorter suspension time is likely to result from the SFC’s proposed move to more efficiently process applications for trading resumption through simplified procedures and the delegation of the SFC Board’s decision-making power to senior executives in uncontroversial cases; and
(iv) for issuers aggrieved by the SFC’s decisions, a right for them to seek a full merits review by the Securities and Futures Appeals Tribunal would provide an effective independent safeguard that the regulatory decisions made by the SFC are reasonable, proportionate and fair.
“Investors and listed issuers alike stand to benefit from these comprehensive enhancements to drive regulatory and operational efficiencies in Hong Kong’s listing market as a favourite listing destination for companies at home and abroad,” said Mr Michael Duignan, the SFC’s Executive Director of Corporate Finance. “Strengthening public accountability and streamlining the regulatory process underscores the SFC’s steadfast commitment to cementing the city’s status as an international financial centre.”
The SFC invites the public to submit their written comments on or before 23 May 2025 via the SFC website (www.sfc.hk), by email to SMLR.Review@sfc.hk, by post or by fax to 2810 5385.
Notes:
1. The SMLR, which has been effective since 1 April 2003, provides the SFC with tools to utilise against false or misleading corporate information disclosure and against listings that would not be in the interests of the investing public or the public interest. The SMLR also reinforces the legal and regulatory regime for listing in addition to the non-statutory Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited administered by The Stock Exchange of Hong Kong Limited.
2. As the SFC focuses on tackling the most serious and egregious behaviour, the proposed amendments are expected to have little to no impact on the majority of listed issuers. Listed issuers that provide adequate, timely and complete information about their business activities and transactions should find that their existing practices remain effective and relevant.
