On 11 February 2011, both the Government and the SFC issued their consultation conclusions to their respective proposals on disclosure of inside information and price-sensitive information.
The Government conducted a 3 month consultation from March 2010 on its proposals to codify the requirements for listed corporations to disclose price-sensitive information (namely the Proposed Statutory Codification of Certain Requirements to Disclose Price Sensitive Information by Listed Corporations.) The consultation paper sets out the proposed legislative framework as well as regulatory structure and related enforcement matters for the statutory regime. The Government will proceed to implement its proposals with revisions to the SFO, Securities and Futures (Fees) Rules and the Listing Rules. The Securities and Futures (Amendment) Bill 2011 is expected to be introduced to the Legislative Council in the 2010/11 legislative session.
In conjunction with the Government's consultation, the SFC also conducted a 3 month consultation from March 2010 on its "Draft Guidelines on Disclosure of Inside Information" (the "Guidelines"). The Guidelines were prepared to assist listed corporations to comply with the Government's proposed disclosure obligations. The Guidelines will be revised and finalised when the Securities and Futures (Amendment) Bill 2011 is passed by the Legislative Council and settled.
Remarks: The Government and the SFC take the view that a statutory regime for disclosure of inside information is necessary to enhance market quality and transparency, and to bring Hong Kong's regulatory regime for listed corporations more in line with those of overseas jurisdictions. As such, the proposed changes to the statutory regime and the SFC's guidelines will be broadly familiar to international institutions. An interesting aspect is the SFC's proposal to run a helpline on its guidelines for listed companies to source the regulators on disclosure issues. We previously reported on both the Government and the SFC's consultations in our April/May 2010 edition of the Hong Kong Financial Institutions Newsletter, a copy of which may be viewed HERE.