SFC and HKEx Joint Press Release
New Memorandum of Understanding Governing Listing Matters

The Securities and Futures Commission (SFC) and The Stock Exchange of Hong Kong Limited (SEHK), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx), signed a new Memorandum of Understanding (MOU) today. The MOU takes immediate effect and replaces the memorandum, its addendum and supplements which were signed between the two organisations in March and August 2000.

The new MOU sets out, as in the previous Memoranda of Understanding between the SFC and SEHK, the respective roles and responsibilities of the two organisations, and their supervisory relationship. In preparation for the commencement of the Securities and Futures Ordinance (SFO) on 1 April 2003, the new MOU also details the administrative arrangements for implementing the dual filing regime provided by the Securities and Futures (Stock Market Listing) Rules under the SFO.

The parties also signed a Deed under which SEHK agrees to pay to the SFC $20 million a year, for three years commencing from the date the dual filing regime comes into effect, to help defray the costs of administering and taking enforcement action under the dual filing regime.

A new feature of the arrangements between SFC and SEHK is the establishment of a High Level Group, a liaison group between the two organisations, to review systemic and policy issues concerning listing-related matters.

Under the MOU, to comply with the dual filing regime, listing applicants and listed issuers will continue to file their listing applications and disclosure documents to SEHK. By using the standard form authorisation letters appended to the MOU, they can authorise SEHK to file their documents to the SFC on their behalf. SEHK remains the primary point of contact for listing applicants and listed issuers, and will continue to be responsible for conducting all vetting of the draft documents to be made or issued under the Main Board and Growth Enterprise Market Listing Rules prior to publication.

The MOU was signed by Mr Andrew Sheng, Chairman of the SFC, and Mr Kwong Ki-chi, Chief Executive of HKEx and Chairman of SEHK.

Mr Sheng said: "With this new MOU signed, the SFC and the SEHK will work closely together to implement the dual filing regime. The High Level Group will also further strengthen the understanding and communication between the two organisations. The MOU emphasises a consistent supervisory approach and serves to facilitate the administration of the listing functions for the benefit of market users."

Mr Kwong said: "HKEx is working closely with SFC to implement the SFC's dual filing system. HKEx believes the dual filing system will strengthen the credibility of the existing disclosure-based mechanism and listing regulatory structure, and will help improve market quality."

Both the SFC and the SEHK have posted a copy of the MOU on their websites at www.hksfc.org.hk and www.hkex.com.hk respectively.