The CFA Code and Chapter 3A are intended to assist financial advisers and sponsors by providing a benchmark for standards of behaviour expected in the industry. The SFC and the Exchange are hopeful that the CFA Code and Chapter 3A will assist financial advisers and sponsors to upgrade their standards in line with the aspiration of maintaining Hong Kong's position as an international financial centre.
The CFA Code spells out the duties and responsibilities of corporate finance advisers and the standards expected of them without imposing new or additional requirements. The SFC wishes to point out that the CFA Code does not replace any existing codes, rules and regulations, but supplements them in relation to corporate finance advisers.
A principal objective of Chapter 3A of the Listing Rules is to set a minimum and uniform standard among corporations and individuals who are engaged in, among other things, sponsorship activities and the provision of corporate finance advisory services.
Mr. Lawrence Fok, Senior Executive Director of the Regulatory Affairs Group of the Exchange, said "It should be noted that some of the provisions under Chapter 3A represent a codification of the existing practice of the Exchange and minimum standards expected of sponsors and financial advisers. The new chapter will assist the Exchange in performing its frontline regulatory role in administering the Listing Rules and corporate finance advisers will find the proposed rules impose very reasonable requirements and obligations on them. For example, the new rules stress the need for such parties to conduct their own proper due diligence work rather than to place unsubstantiated reliance on information provided by others. Only then can the Exchange be assured of the completeness and accuracy of information provided by them".
Mr. David Stannard, Executive Director of the Corporate Finance Division of the SFC, said "the SFC will continue its efforts to raise the standard of corporate finance practices in the market. The CFA Code and the new listing rule chapter represent the latest step in our efforts to help raise the standard of corporate finance advisers, which will in the longer term further contribute to the standing of our market. We want to work with the financial services industry to improve the standards and performance and are hopeful that the CFA Code and the new chapter will assist the industry in this."
Hardcopies, in Chinese and English, of the two consultation papers are available at both the offices of the SFC and the Exchange (11/F, One International Finance Centre and 1/F, One and Two Exchange Square ). Copies may also be downloaded from the respective websites: http://www.hksfc.org.hk and http://www.sehk.com.hk.
Written comments are welcome and should reach the SFC or the Exchange by May 31, 2000.
