HK tightens disclosure regime for listed stocks

A new rule, part of the Securities and Futures (Amendment) Bill 2011 introduced to the Hong Kong's Legislative Council on 29 June, will require listed companies to publicly disclose price-sensitive information as soon as is reasonably practical after becoming aware of it.
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A new rule, part of the Securities and Futures (Amendment) Bill 2011 introduced to the Hong Kong's Legislative Council on 29 June, will require listed companies to publicly disclose price-sensitive information as soon as is reasonably practical after becoming aware of it.

“Implementation of a statutory obligation to disclose price-sensitive information is strongly supported by the Listing Committee,” said Mark Dickens, head of listing at Hong Kong Exchanges and Clearing. “At an appropriate stage after the introduction of the Bill into the Legislative Council, we will consult the market on consequential amendments to relevant parts of the listing rules.”

According to the Hong Kong government, a stricter regime for disclosing sensitive information will allow the Securities and Futures Commission (SFC), Hong Kong's financial regulator, to better monitor market misconduct. The SFC will have responsibility for enforcing the new regime.

“A civil statutory price-sensitive disclosure regime will help promote a continuous disclosure culture among listed corporations to enhance market transparency and quality, to bring our regulatory regime for listed corporations more in line with other international financial centres, and to enhance Hong Kong’s strength as a premier capital formation platform,” said a spokesperson for Hong Kong's Financial Services and Treasury Bureau.

To define price-sensitive information, the new rule will use the same concept of relevant information that is used to define insider dealing under Hong Kong's Securities and Futures Ordinance.

“To strike a reasonable balance between ensuring market transparency and safeguarding the legitimate interests of listed corporations in preserving certain information in confidence to facilitate their operation and business development, the Bill will provide specified safe harbours,” added the spokesperson.

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