Introduction
The roles of sponsors and independent financial advisers (IFAs) are of special importance inHong Kong due mainly to the unusually large proportion of listed companies and listing applicants whose domicile and main operations are located outside the jurisdiction.
Policy developments
On 19 October 2004 the Stock Exchange of Hong Kong Limited (SEHK), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx), and the Securities and Futures Commission (the SFC) jointly published a Consultation Conclusions Report on the Regulation of Sponsors and IFAs (the Conclusions Report). SEHK also published amendments to the Listing Rules (Main Board and GEM) consistent with the policy conclusions set out in the Conclusions Report. The rule amendments commence on 1 January 2005, subject to certain transitional arrangements set out in the news release of 19 October 2004.
The policy conclusions and rule amendments address, amongst other things:
when an issuer must appoint a sponsor or post-listing adviser (known as compliance adviser);
the role and responsibilities of issuers in assisting sponsors and compliance advisers;
undertakings and declarations required to be given by sponsor firms to SEHK;
independence requirements for sponsors and compliance advisers; and
the roles and responsibilities of sponsors and compliance advisers including the due diligence SEHK expects sponsors should typically perform.
Other information
The news release published on 19 October 2004 is available at http://www.hkex.com.hk/news/hkexnews/2004.htm, the Conclusions Report is available at http://www.hkex.com.hk/consul/conclusion/consultcon.htm (English version) and http://www.hkex.com.hk/consul/conclusion/consultcon_c.htm (Chinese version), and the rule amendments are available at http://www.hkex.com.hk/rule/mbrule/mb_ruleupdate.htm (Main Board rules) (English version) and http://www.hkex.com.hk/rule/gemrule/gemrule_update.htm (GEM rules) (English version).