Introduction

On 24 July 2002, Hong Kong Exchanges and Clearing Limited (HKEx) announced initiatives to simplify and streamline the listing process and to improve the quality of the vetting, with the intention to reduce the time required for processing a new listing application. This forms part of the Corporate Governance Action Plan of the Secretary for Financial Services and the Treasury for 2003 to upgrade the quality of the Hong Kong stock market. We like to update the market on recent developments.

1. Reorganisation of Listing Division Executives
   We are pleased to announce that the reorganisation of Listing Division executives within the Corporate Finance section has been completed. New listing applications are assigned to integrated teams within the Corporate Finance section, each of which is led by a senior executive and is responsible for all aspects of the listing process, including corporate finance matters, accountancy matters, prospectus vetting and authorisation for the purpose of Companies Ordinance registration. We believe that this integrated approach should make the vetting of listing applications and other transactions more efficient. We have also introduced arrangements in conjunction with the Securities and Futures Comission to help ensure the smooth operation of the dual filing and vetting system introduced under the Securities and Futures Ordinance on 1 April 2003.

2. Revised Guidance on New Listing Applications
   It is our experience that some sponsors have not been forthcoming in raising novel or contentious issues and borderline cases on interpretation of the Listing Rules with the Listing Division on a timely basis. Early resolution of such issues will greatly facilitate the listing process. We are introducing a revised Guidance on New Listing Applications (the Guideline) as part of our efforts to improve efficiency in vetting new listing applications.

   The Guideline provides a non-exhaustive list of potential issues which should be raised with the Listing Division, it also sets out the checklists, information and documentary requirements applicable at each stage of the vetting process. This Guideline will assist sponsors to assemble information required in a new listing application in an organised manner, and to submit all relevant information required to assess the new listing application on a timely basis. It is expected that with the new Guideline, the Listing Division will be provided with the necessary information, and will be in a better position to commence vetting of a new listing application and identify principal issues immediately upon the lodgement of the application.

   The Listing Division has reminded sponsors that it will not hesistate to return a new listing application if the prospectus is not in an advanced state, or if necessary documents or information required by the Listing Division is not submitted together with the application form. Furthermore, the timetable for an application may be delayed if comments raised by the Listing Division are not adequately addressed, if information and documents requested by the Listing Division are not provided in a timely manner, or if a significant new issue is raised, or material new information provided after the application has been submitted.

3. Application
   The new Guideline is effective for new applications submitted from 16 June 2003. For listing applications in progress the Listing Division will seek to implement the spirit of these requirements and may request the sponsors to provide information similar to those set out in the Guideline. We will monitor the effectiveness of this Guideline and may make further revisions as necessary. Sponsors are invited to provide the Listing Division with feedback on the Guideline.

The Guideline is being distributed to sponsor firms, and will also be available for downloading from the HKEx's eSubmission System at www.esubmission.hkex.com.hk.