29.

What are unusual share price movements? Does the definition apply to all stocks?

The shares of a company with price and/or turnover moving unusually without obvious reasons are said to have unusual share price movements. These happen when, for example, a company's share price defies a market fall to rise sharply or turnover increases suddenly without the management of the company being able to explain the cause. The extent to which a movement in share value or turnover will be regarded as unusual depends on individual cases. SFC and the Stock Exchange provide no absolute guidelines, but the past performance of a security; the performance of other stocks in the same sector; overall market conditions can often serve as yardsticks. If the unusual price movements are caused by possible leaks in price-sensitive information, the Stock Exchange and SFC may require the company to issue a clarification notice or suspend its shares pending release of information so that all investors have access to the information on an equal basis.

30.

Is there any difference between the market regulation for Hong Kong-incorporated listed companies and those Hong Kong-listed companies incorporated outside Hong Kong?

Companies seeking a primary listing in Hong Kong, whether incorporated in or outside Hong Kong, must comply with the Listing Rules, the Codes on Takeovers and Mergers and Share Repurchases issued by SFC, and other applicable ordinances. All listed companies are subject to regulation by the Stock Exchange on an equal basis.

31.

Which organisation is responsible for the regulation of takeovers and share repurchase activities?

The Codes on Takeovers and Mergers and Share Repurchases govern takeovers, mergers and share repurchases. The SFC is responsible for administering these two Codes. For details of regulation of takeovers and share repurchase, please visit its website on http://www.sfc.hk.

32.       

Why does the Stock Exchange not stop the management of listed companies from proposing or conducting transactions which are regarded as "unfavourable" by minority shareholders?

Terms of a listed company's transactions are commercial decisions for its board and shareholders.  As the frontline regulator of listed companies, the Stock Exchange cannot  know more about a company's business development and capital needs than its directors, management and shareholders.  If the Stock Exchange interferes with the commercial decisions of listed companies, the companies may miss opportunities for investment and business development.  Directors have an obligation and fiduciary duty to ensure transactions undertaken are fair and reasonable, and are in the interest of the listed company and its shareholders.  The Listing Rules include provisions to ensure that shareholders have the appropriate opportunity to vote on major decisions made by the management of listed companies.  The Stock Exchange cannot and should not intervene in commercial decisions made by the board and shareholders of a listed company.