(1) Investigations Statistics
This table shows the number of parties and rule breaches involved in the investigations carried out by Listing Enforcement of the Stock Exchange during the course of the first six months of the year as compared to the previous year.
|
Six months ended 30/6/2017(1) |
Six months ended 30/6/2016(1) |
|
MB |
GEM |
Total |
MB |
GEM |
Total |
| Investigations |
54 |
15 |
69 |
38 |
6 |
44 |
| Cases involving: |
|
| Company |
46 |
14 |
60 |
34 |
6 |
40 |
| Current directors(2) |
14 |
4 |
18 |
9 |
3 |
12 |
| Former directors(2) |
18 |
8 |
26 |
11 |
4 |
15 |
| 3 Listing Rule breaches (or less) |
31 |
9 |
40 |
16 |
3 |
19 |
| More than 3 Listing Rule breaches |
23 |
6 |
29 |
22 |
3 |
25 |
| Involvement with and referrals to other regulators(3) |
27 |
4 |
31 |
14 |
1 |
15 |
| (1) |
Figures cover investigations concluded during the period and investigations which remained active as at the end of the period. |
| (2) |
Figures may include directors residing overseas. |
| (3) |
Other regulators include regulators such as the Securities and Futures Commission (SFC), Independent Commission against Corruption, Financial Reporting Council and the Commercial Crime Bureau. Referrals do not include those made to the SFC which do not arise out of an investigation for potential breach of the Listing Rules or those matters specifically under the remit of the SFC’s jurisdiction e.g. referrals made under the Inside Information Provisions in Part XIVA of the Securities and Futures Ordinance. |
(2) Issues under Investigation
Since 2014 the Stock Exchange has been adopting a themed approach to enforcement activity. Following a review, the Listing Committee has modified the focus for investigation and enforcement action from five to the following seven themes. Notwithstanding this themed approach to investigation, the Exchange will continue to pursue any other breaches of the Listing Rules that may demonstrate sufficiently egregious conduct beyond the scope of the themes.
| ISSUES |
Six months ended 30/6/2017(1) |
Six months ended 30/6/2016(1) |
|
MB |
GEM |
Total |
MB |
GEM |
Total |
| CORE THEMES(2) |
|
| (1) Directors’ duties |
7 |
3 |
10 |
18 |
2 |
20 |
| (2) Failure to cooperate with an Exchange investigation |
6 |
1 |
7 |
3 |
0 |
3 |
| (3) Inaccurate, incomplete and/or misleading disclosure in corporate communication |
1 |
1 |
2 |
|
|
|
| (4) Failure to comply with procedural requirements in respect of notifiable/connected transactions |
5 |
1 |
6 |
|
|
|
| (5) Repeated breaches of the Listing Rules |
0 |
0 |
0 |
|
|
|
| (6) Delayed trading resumption |
0 |
0 |
0 |
|
|
|
| (7) Financial reporting - delays, or internal controls and corporate governance issues |
1 |
0 |
1 |
|
|
|
| Late financial reporting (now forms part of Theme (7)) |
|
|
|
0 |
0 |
0 |
| Heavily qualified audit reports: corporate governance issues (now forms part of Theme (7)) |
|
|
|
0 |
0 |
0 |
| Prolonged suspension of trading (now forms part of Theme (6)) |
|
|
|
0 |
0 |
0 |
| MULTIPLE THEMES |
26 |
8 |
34 |
3 |
3 |
6 |
| OTHERS: |
|
| Accurate presentation of information (now forms part of Theme (3)) |
|
|
|
3 |
0 |
3 |
| Notifiable transactions (now forms part of Theme (4)) |
|
|
|
5 |
1 |
6 |
| Connected transactions (now forms part of Theme (4)) |
|
|
|
3 |
0 |
3 |
| Other Listing Rules not falling into any of the above categories |
8 |
1 |
9 |
3 |
0 |
3 |
| (1) |
Figures cover investigations concluded during the period and investigations which remained active as at the end of the period. |
| (2) |
Core themes represent those that are the main focus of an investigation (whether or not it involves other issues). An investigation covering more than one core theme will be disclosed under multiple themes. |
(3) Outcome of Enforcement Actions by Listing Committee and Enforcement
|
Six months ended 30/6/2017 |
Six months ended 30/6/2016 |
|
MB |
GEM |
Total |
MB |
GEM |
Total |
| Sanctions imposed(1) |
|
| Public censures |
3 |
0 |
3 |
2 |
0 |
2 |
| Public statements involving criticism |
0 |
0 |
0 |
0 |
0 |
0 |
| Other public statements(2) |
0 |
0 |
0 |
2 |
0 |
2 |
| Private reprimands |
0 |
0 |
0 |
0 |
0 |
0 |
| Directions involving(3): |
|
| Internal Control Review |
0 |
0 |
0 |
0 |
0 |
0 |
| Retention of Compliance Advisor |
1 |
0 |
1 |
1 |
0 |
1 |
| Training of Directors |
2 |
0 |
2 |
2 |
0 |
2 |
| Warning/caution letters issued by Enforcement only |
4 |
0 |
4 |
5 |
1 |
6 |
| Average time for completion of an investigation (from commencement of investigation to the decision as to the level of regulatory action) was 9.1 months for cases investigation of which was completed in the first six months of 2017. |
| (1) |
These figures represent the primary regulatory sanction imposed in a disciplinary action and save for (2) below, do not include other sanctions that may be imposed in the same action. |
| (2) |
Include Rule 2A.09(7) statement (GEM: GEM Listing Rule 3.10(7)) where, in the case of wilful or persistent failure by a director to discharge his responsibilities under the Listing Rules, the Exchange states its opinion that the retention of office by that director is prejudicial to the interests of investors; and also where the Listing Committee expresses its views that it would be minded to make such a statement had the resigned director stayed in office. These figures are in addition to and do not form part of the total number of primary regulatory sanctions imposed. |
| (3) |
These figures represent the total number of directions given in addition to the primary regulatory sanction imposed in a disciplinary action. |
(4) Number of Directors Subject to Disciplinary Sanctions
|
Six months ended 30/6/2017 |
Six months ended 30/6/2016 |
|
MB |
GEM |
Total |
MB |
GEM |
Total |
| Executive directors |
9 |
0 |
9 |
8 |
0 |
8 |
| Non-executive directors |
2 |
0 |
2 |
2 |
0 |
2 |
| Independent non-executive directors |
0 |
0 |
0 |
0 |
0 |
0 |
|
Total |
11 |
0 |
11 |
10 |
0 |
10 |