Hong Kong's Securities And Futures Commission Issues Supplemental Consultation Conclusions On Regulation Of IPO Sponsors

The Securities and Futures Commission (SFC) today released supplemental consultation conclusions(Note 1) reaffirming that IPO sponsors are subject to existing statutory civil and criminal liability for defective prospectuses.

After the publication of initial consultation conclusions in December 2012 (Note 2), the SFC held further discussions with industry participants and other interested parties regarding possible legislative amendments to clarify sponsors’ prospectus liability. The SFC also took the opportunity to carefully re-examine in more depth the scope and applicability of the existing statutory provisions to sponsors and concluded that sponsors authorize the issue of the prospectus and are covered under the existing law. Accordingly, legislative amendments are unnecessary.

Notes:

1. Supplemental Consultation Conclusions on the Regulation of IPO Sponsors – Prospectus Liability
2. On 9 May 2012, the SFC issued a Consultation Paper on the Regulation of Sponsors which contained a number of proposals designed to enhance Hong Kong’s sponsor regulatory regime. The consultation period ended on 31 July 2012 and 71 responses were received. The SFC released Consultation Conclusions on the Regulation of IPO Sponsors on 12 December 2012.