mobile search

Enforcement Statistics

(1) Investigations

This table shows the number of investigations carried out by the Enforcement Team during 2018 (as compared to 2017).

            Twelve months ended
31/12/2018(1)
            Twelve months ended
31/12/2017(1)
MB GEM Total MB GEM Total
Investigations 87 24 111 65 21 86
Cases involving:
  Company 81 21 102 54 18 72
  Current directors 17 8 25 17 10 27
  Former directors 33 13 46 27 10 37
Three Listing Rule breaches (or less) 54 14 69 38 13 51
More than three Listing Rule breaches 33 10 43 27 8 35
Investigations involving, and referrals to, other regulators(2) 41 6 47 24 6 30
(1) Figures cover all cases investigated during the period (both concluded cases and cases that remain ongoing).
(2) Referrals do not include those involving solely possible breach of the Inside Information provisions of the Securities and Futures Ordinance.

(2) Issues under Investigation

The Enforcement Team has adopted a thematic approach to enforcement activity since 2014. Whilst the Enforcement Team will continue to pursue any breach of the Listing Rules (as per the Enforcement Policy Statement), during 2018, 91% of all investigations related to one or more of the enforcement themes identified below.

ISSUES             Twelve months ended
31/12/2018(1)
            Twelve months ended
31/12/2017(1)
MB GEM Total MB GEM Total
ENFORCEMENT THEMES(2)  
(1) Directors’ duties 28 7 35 12 4 16
(2) Failure to cooperate with an Exchange investigation 4 1 5 8 2 10
(3) Inaccurate, incomplete and/or misleading disclosure in corporate communication 2 0 2 4 1 5
(4) Failure to comply with procedural requirements in respect of notifiable/connected transactions 6 1 7 6 1 7
(5) Repeated breaches of the Listing Rules 0 1 1 0 1 1
(6) Delayed trading resumption 0 0 0 0 0 0
(7) Financial reporting - delays, or internal controls and corporate governance issues 1 0 1 0 0 0
MULTIPLE THEMES(3) 38 12 50 29 10 39
OTHERS:
Other Listing Rules not falling into any of the above categories 8 2 10 6 2 8
(1) Figures cover all cases investigated during the period (both concluded cases and cases that remain ongoing).
(2) Enforcement themes represent those that are the main focus of an investigation (whether or not it involves other issues). An investigation covering more than one enforcement theme will be disclosed under multiple themes.
(3) Number of investigations during the period under multiple themes involving Theme (1): (2018: 41; 2017: 30); Theme (2): (2018: 3; 2017: 2); Theme (3): (2018: 17; 2017: 18); Theme 4: (2018: 23; 2017: 20); Theme 5: (2018: 7; 2017: 7); Theme 6: (2018: 4; 2017: 2); Theme 7: (2018: 24; 2017: 15).

(3) Outcome of Enforcement Actions by Listing Committee and Enforcement

            Twelve months ended
31/12/2018
            Twelve months ended
31/12/2017
MB GEM Total MB GEM Total
Sanctions imposed(1)  
Public censures 14 7 21 7 1 8
Public statements involving criticism 0 0 0 1 0 1
Other public statements(2) 1 2 3 0 0 0
Private reprimands 0 0 0 0 0 0
Directions involving(3):  
Internal Control Review 1 1 2 0 0 0
Retention of Compliance Advisor 2 6 8 1 0 1
Training of Directors 6 6 12 4 0 4
Warning/ caution letters issued by Enforcement only 11 3 14 8 1 9
Average time for completion of an investigation in 2018 (from commencement of investigation to the decision as to the regulatory action to be taken) was 9 months.(4)
(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) The average time for completion of an investigation in 2017 was 9.4 months and not 8.7 months as previously disclosed.

(4) Number of Directors Subject to Disciplinary Sanctions

            Twelve months ended
31/12/2018
            Twelve months ended
31/12/2017
MB GEM Total MB GEM Total
  Executive directors 41 30 71 16 1 17
  Non-executive directors 5 5 10 4 0 4
  Independent non-executive directors 17 22 39 3 0 3
Total 63 57 120 23 1 24

Updated 22 Jan 2019

Updated 22 Jan 2019

Loading