Update No. 11

12 December 2001

Dear Sirs,

Amendment to the GEM Listing Rules in relation to the involvement of accounting firms as co-sponsors and reporting accountants in the same listing applications

We enclose reprinted pages of the GEM Listing Rules incorporating amendments to Chapter 6 of the GEM Listing Rules, together with filing instructions.

The Exchange may in certain circumstances permit the corporate finance and audit operations of an accounting firm to be involved as a co-sponsor (but not as a sole sponsor) and the reporting accountant respectively in the same listing application. The responsibilities of sponsors and co-sponsors in relation to new listing applications, as set out in the GEM Listing Rules, are not affected by the granting of such permission. The Exchange considers that the roles of the corporate finance and audit operations of an accounting firm in a new listing application should be clearly segregated. Such segregation should comprise "Chinese walls" between the respective functions and should be enforced through proper internal risk management procedures within an accounting firm.

Any permission granted by the Exchange is subject to various conditions set out in the GEM Listing Rules, as amended, and any other conditions, which the Exchange may impose as appropriate.

Such permission is to be granted by the Exchange on a case-by-case basis.

The above rule amendment will apply with immediate effect.

Yours faithfully,
For and on behalf of
The Stock Exchange of Hong Kong Limited

Karen Lee
Head of Listing, Regulation and Risk Management