Hong Kong’s Securities And Futures Commission Publishes Consultation Conclusions On Principles Of Responsible Ownership

The Securities and Futures Commission (SFC) today released consultation conclusions on the Principles of Responsible Ownership which aim to provide guidance on how investors should fulfil their ownership responsibilities in relation to investments in Hong Kong listed companies (Note 1).

Having carefully considered all the respondents’ comments (Note 2), the SFC has decided to introduce the proposed principles with minor changes, removing references to individual and retail investors from the principles.

 “The Principles of Responsible Ownership describe what we perceive as best practices for share ownership and we encourage investors to adopt them,” said Mr Ashley Alder, the SFC’s Chief Executive Officer. “This can encourage an investment culture where engagement with investee companies is seen as paramount and fundamental and which in turn strengthens corporate governance.”

The principles, which are voluntary, are intended to apply to investors who invest money or hold shares on behalf of clients or stakeholders to whom they are accountable.

Investors who hold or receive funds from the public which are invested in shares of Hong Kong listed companies are encouraged to adopt the principles and to make disclosures to their stakeholders accordingly.

Investors who do not think the principles are relevant to or suitable for them are encouraged to disclose to stakeholders why they have not been adopted at the outset and what alternative measures they have put in place, if any.

The SFC will monitor the application of the principles to determine whether amendments or other changes may be necessary.