Hong Kong: Statutory Backing of Requirement to Disclose Price Sensitive Information by Listed Corporations

On January 1, 2013, amendments to the SFO are scheduled to come into effect giving statutory backing to the requirement currently contained in the Listing Rules for companies to disclose price sensitive (or ‘inside’) information. The changes follow from the Securities and Futures (Amendment) Ordinance 2012 - gazetted today.

The SFC will issue Guidelines containing examples and indicating the SFC’s views on the operation of the SFO provisions. Alleged breaches will be handled by the Market Misconduct Tribunal (MMT) and certain ‘safe harbours’ exist (permitting non-disclosure). The MMT may make a number of orders, including a regulatory fine of up to HK$8 million on the corporation, each of its directors and/or its chief executive respectively. Certain other consequential amendments are made to the SFO, including a confirmation that Saturday is not a “business day” under the SFO, effective May 4, 2012. This will affect the timing for notification to be given under Part XV (disclosure of interests) as an example.

This memo examines the key features of the new legislation.