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In its latest edition of the Dual Filing Update (Note 1), the Securities and Futures Commission (SFC) highlights major deficiencies it noted in its review of listing application materials.
During the year ended March 2012, the SFC continued to find listing application materials that were not up to the expected standard:
- In two cases with significant risks of business discontinuation, certain optimistic assertions were made about the sustainability of the applicants’ businesses based on assumptions that were apparently at odds with observable facts about the applicants and their industry environments.
- In several other cases, the initial listing application materials did not even contain the minimum information and documents expressly required under the relevant listing rules.
- In addition, many draft listing documents failed to provide meaningful disclosures on the applicants’ risks, historical financial performances and future plans for investors to make informed assessment of the applicants’ businesses and prospects.
“Submission of sub-standard listing application materials inevitably prolongs the vetting process and could, in some cases, result in eventual suspension of the applications,” said the SFC’s Chief Executive Officer Mr Ashley Alder. “It is to the benefit of both investors and applicants that listing application materials are prepared with due care and skill and that they are submitted only after applicants and their advisers have taken reasonable steps to ensure accuracy, completeness and clarity.”
The Dual Filing Update is available under "Speech, Publications & Consultations" - "Publications" of the SFC website
Note:
1. The Dual Filing Update is a newsletter that recounts key dual filing issues identified by the SFC. Members of the public may subscribe to it by registering for the Update Alert service online. Comments on dual filing matters can be sent to dualfiling@sfc.hk.
