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), jointly published today the consultation conclusions on their proposed changes to the property valuation requirements for applicants and issuers (Note 1).

Comments by respondents indicated that the market supported the proposals, which streamline requirements for property valuation disclosure in prospectuses and circulars. Less onerous property valuation requirements will apply to applicants and issuers, particularly for property interests that are not related to property development and investment activities. 

“The revised requirements will result in more focused and relevant information to be disclosed in prospectuses and circulars, making the process more cost-effective for applicants and issuers,” said Brian Ho, the SFC’s Executive Director, Corporate Finance.

“The revised Listing Rules will remove unnecessary burdens on applicants and issuers while ensuring meaningful information is given to investors,” said Mark Dickens, HKEx’s Head of Listing.

In implementing the proposals, the SFC and SEHK have refined the requirements relating to mining activities (Note 2) and fine-tuned the drafting of the class exemption notice and the Listing Rules in response to market comments.

Subject to negative vetting by the Legislative Council, the class exemption notice will become effective on 1 January 2012. The Listing Rule amendments will take effect at the same time as the class exemption notice. 

The consultation conclusions, including the class exemption notice and relevant rule amendments, are available on the SFC website and the HKEx website.

Notes: 
   

1. On 3 December 2010, the SFC and SEHK launched a 10-week consultation to invite comments on the “Joint Consultation Paper on Proposed Changes to Property Valuation Requirements.”
    
2. The original proposal was to exempt property interests ancillary to mining activities from valuation if a valuation of the assets or resources associated with the mining activities had been conducted.  The refined proposal is that separate valuation of property interests ancillary to mining activities will not be required if the mining activities and ancillary property interests have been valued as a business or an operating entity.

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