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Specific issues related to Disclosures by Listing Applicants and Listed Companies

Written by: Ms. Rachel Lo (Senior Risk Consultant)

In March 2016, the Securities and Futures Commission (“SFC”) has specifically highlighted the issues related to disclosures by listing applicants and listed companies in its Corporate Regulation Newsletter. The key issues are summarized as below:

Disseminate information through the Hong Kong Exchanges and Clearing Limited (“HKEX”)’s platform

Listed companies will be considered as complying with the statutory requirement if they disseminate the inside information through the electronic publications system operated by the HKEX. Unfair advantages may be caused if the company uses other means to disclose the information to the public, such as the website of the company, as not all members of the investing public follow the information published on the company’s website closely.

Handle the information effectively

In some cases, company development may not constitute inside information and is not required to be announced under the rules and regulations. The company could release such information on its website. However, it is important that the company provides sufficient information to the readers for them to understand the impacts on the company’s affairs.

Establish information disclosure procedure on corporate website and the HKEX’s platform simultaneously

Companies should establish information disclosure procedures on its website and the HKEX’s platform. In addition, they should also protect the information prior to the disclosure.

Be aware of the use of social media

Companies should be aware if they intend to disclose the information through social media, such as Weibo and Facebook, since not all stakeholders subscribe to their pages or channels. Besides, there may be restrictions on the number of characters of each message on the social media. Companies may have to explain if the message is not complete.

Apart from the above, SFC reminds the listed companies to pay attention to the content of the disclosed information which should be accurate, complete and not misleading. In addition, the companies should disseminate both good news and bad news equally without glossing over or omitting any material facts. The companies should bear in mind that the disclosure should be sufficient for investors to make reasonable and realistic assessment of the company’s affairs. If the company requests for a suspension of trading of its securities due to the disclosure of inside information, the suspension should be kept as short as possible as mentioned in the Guidance Letter issued by HKEX in December 2015.


Source:
SFC – Corporate Regulation Newsletter ISSUE NO.3 MARCH 2016

 

If there are any aspects which we may assist, please do not hesitate to contact:

Managing Partner - Mr. Roy Lo
roy.lo@shinewing.hk (Tel. 3583 8048) or

Senior Risk Manager - Ms. Gloria So
gloria.so@shinewing.hk (Tel. 3583 8517)

 

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