Regulation of Sponsors &
Independent Financial Advisers
HKEx briefings
7, 8 & 13 December 2004
1
In October HKEx & SFC announced:


Consultation conclusions
Rule amendments (commence 1 January 2005 subject to transitional arrangements)
2
Agenda:





Process
Key Objectives
Key Aspects
2 Phases
Rule Changes
 sponsors & CAs

IFAs

 transitional
Enforcement

Questions
3
Process:



Conclusions informed by extensive market
consultation
In conjunction with May 2003 consultation paper
Conclusions & rule amendments approved by SEHK
& Commission
4
Agenda:





Process
Key Objectives
Key Aspects
2 Phases
Rule Changes
 sponsors & CAs

IFAs

 transitional
Enforcement

Questions
5
Key Objectives:


Sponsors play an important role in HK. Variance of
expectations
To address expectation gap:
 clear framework for role of sponsors, compliance
advisers & IFAs
 make it abundantly clear what is expected of
them & issuers that appoint them
6
Agenda:





Process
Key Objectives
Key Aspects
2 Phases
Rule Changes
 sponsors & CAs

IFAs

 transitional
Enforcement

Questions
7
Key Aspects:
Conclusions & amended rules:


WILL codify current expectations
WILL clearly set out:
 when sponsors, CAs & IFAs must be appointed
 when sponsors, CAs & IFAs must be independent
& what is independence
8

role of sponsors, CAs & IFAs including due
diligence

role of issuers in assisting sponsors & CAs
9




WILL make it clear that sponsors, CAs & IFAs can
only do what is reasonable & appropriate
WILL NOT expect sponsors to verify expert reports/
be experts
WILL allow engaging of 3rd party professionals (but
sponsor must ensure work not substandard)
WILL NOT shift obligations from directors/experts to
sponsors
10
Agenda:





Process
Key Objectives
Key Aspects
2 Phases
Rule Changes
 sponsors & CAs

IFAs

 transitional
Enforcement

Questions
11
2 Phases:
1.
2.
Why?
Initial & continuing eligibility to be solely in SFC’s
licensing regime
How?
1 January 2005: most amendments
late 2005:
new SFC regime & further
consequential amendments
12
Agenda:





Process
Key Objectives
Key Aspects
2 Phases
Rule Changes
 sponsors & CAs

IFAs

 transitional
Enforcement

Questions
13
Rule Changes:
On 1 January, rules amended to:




include new chapter re sponsors & CAs
(MB Ch.3A; GEM Ch.6A)
include new rules re IFAs
(MB 13.80 to 13.87; GEM 17.92 to 17.99)
include new PN re due diligence by sponsors
(MB PN21; GEM PN2)
address incidental amendments
14
New MB & GEM rules largely identical
Differences include e.g.:



6A.02 re eligibility (MB: sponsor to be acceptable to
SEHK; GEM: sponsor to be admitted to list of
acceptable sponsors)
6A.19 re length of appointment of CA (MB: 1+ years;
GEM: 2+ years)
different incidental amendments
15
Agenda:





Process
Key Objectives
Key Aspects
2 Phases
Rule Changes
 sponsors & CAs

IFAs

 transitional
Enforcement

Questions
16
Sponsors & compliance advisers:
1. Appointment

3 scenarios:
 pre-listing (& deemed new listings)
 immediately post-listing
 other time as directed (3A.20)
17

Pre-listing & deemed new listings:



sponsor to assist with IPO (3A.02)
no co-sponsorship BUT can engage more than
1 sponsor
if more than 1 (3A.10):
 advise primary communication channel
 all equally responsible
 all must act impartially (3A.06)
 only 1 need be independent
(come back to independence)
18

Post-listing:



CA for 1 year+ (3A.19); (GEM - 2 years+)
can be different to sponsor
need not be independent but must act
impartially
19
2. Eligibility

Until 2005:
 sponsors: status quo i.e.:
MB: acceptable to SEHK
GEM: on eligible list


CAs: adopt sponsor regime
After 2005: determined by SFC
20
3. Independence



all sponsors & CAs must perform duties with
impartiality
sponsors must be independent; if more than 1,
then only 1 need be
listing document must disclose each
sponsor’s independence & if not independent,
how
21


all sponsors must give SEHK statement re
independence addressing criteria (3A.08)
independence test: bright line test to be applied
by sponsor / issuer (3A.07)
22

“sponsor group” is defined at 3A.01(9) as:
(a) a sponsor
(b)
any holding company of the sponsor
(c)
any subsidiary of any holding company of the
sponsor
(d)
any controlling shareholder of:
(i) the sponsor or
(ii)
any holding company of the sponsor
which controlling shareholder is not, itself, a
holding company of the sponsor &
(e)
any associate of any controlling shareholder
referred to in paragraph (d) above
23
This chart does not form part of the Listing Rules
Definition of “sponsor group”
(: Main Board rule 3A.01 and GEM rule 6A.01)
Associates of
controlling
shareholder (CS)
Associates
of CS
CS of Co A that is not, itself,
a holding company of
sponsor
Associates
of CS
Associates
of CS
CS of sponsor that is not,
itself, a holding company of
sponsor
Holding company of
sponsor (Co A)
Subsidiary of Co A
Sponsor
24
This chart does not form part of the Listing Rules
Definition of “sponsor group”
(incorporating effect of definition of “holding company” in s2(7) Companies Ordinance)
Associates of
controlling shareholder
(CS)
Associates of
CS
Associates of
CS
CS of Co A that is not, itself, a holding
company of sponsor
Associates of
CS
CS of sponsor that is not, itself, a holding
company of sponsor
Holding company of sponsor (Co A)
Subsidiary of Co A
Subsidiary of subsidiary
of Co A
Sponsor
Subsidiary of subsidiary
of Co A
Subsidiary of sponsor
Subsidiary of sponsor
Subsidiary of
Subsidiary of
Subsidiary of
Subsidiary of
subsidiary of sponsor
subsidiary of sponsor
subsidiary of sponsor
subsidiary of sponsor
25

3A.07 provides sponsor is not independent if:
(1)
the sponsor group & any director or associate of
a director of the sponsor collectively holds or will
hold,



directly or indirectly
more than 5% of the issued share capital of
the new applicant
save & except where that holding arises as a
result of an underwriting obligation
26
(2)
the fair value of the direct or indirect current or
prospective shareholding of the sponsor group in
the new applicant



exceeds or will exceed 15% of the net equity
shown in the latest consolidated financial
statements of
the sponsor’s ultimate holding company or
where there is no ultimate holding company,
the sponsor
27
(3)
any member of the sponsor group or any director
or associate of a director of the sponsor is

an associate or connected person of the new
applicant
28
(4)
15% or more of the proceeds raised from the initial
public offering of the new applicant

are to be applied directly or indirectly to settle
debts due to the sponsor group

save & except where those debts are on
account of fees payable to the sponsor group
for subject sponsorship services
29
(5)
the aggregate of:
(a)
amounts due to the sponsor group from the
new applicant & its subsidiaries; &
(b)
all guarantees given by the sponsor group on
behalf of the new applicant & its subsidiaries
exceeds 30% of the total assets of the new
applicant
30
(6)
the aggregate of:
(a)
amounts due to the sponsor group from:
(i) the new applicant
the new applicant’s subsidiaries
any controlling shareholder of the new
applicant; &
(iv) any associates of any controlling
shareholder of the new applicant; &
(ii)
(iii)
31
(b)
all guarantees given by the sponsor group on
behalf of:
(i)
(ii)
(iii)
the new applicant
the new applicant’s subsidiaries
any controlling shareholder of the new
applicant; &
(iv) any associates of any controlling shareholder
of the new applicant
exceeds 10% of the total assets shown in the latest
consolidated financial statements of the sponsor’s
ultimate holding company (or the sponsor)
32
(7)
the fair value of the direct or indirect shareholding
of:
(a)
a director of the sponsor
(b)
a director of any holding company of the
sponsor
(c)
an associate of a director of the sponsor; or
(d)
an associate of a director of any holding
company of the sponsor
in the new applicant exceeds HKD 5 million;
33
(8)
an employee or director of the sponsor who is
directly engaged in providing the subject
sponsorship services to the new applicant, or



an associate of such an employee or director
holds or will hold shares in the new applicant
or
has or will have a beneficial interest in shares
in the new applicant
34
(9)
any of the following has a current business
relationship with the new applicant or




a director, subsidiary, holding company or
substantial shareholder of the new applicant
which would be reasonably considered to affect
the sponsor’s independence, or
might reasonably give rise to a perception that
the sponsor’s independence would be so
affected
except where relationship arises pursuant to
subject sponsorship services:
35
(a)
any member of the sponsor group
(b)
an employee of the sponsor who is directly
engaged in providing the subject sponsorship
services to the new applicant
(c)
an associate of an employee of the sponsor
who is directly engaged in providing the
subject sponsorship services to the new
applicant
(d)
a director of any member of the sponsor group;
or
(e)
an associate of a director of any member of
the sponsor group
36
(10)
the sponsor or a member of the sponsor group is
the auditor or reporting accountant of the new
applicant.
37
4. Roles
sponsors: proactive
CAs: reactive
38

must give undertakings:


sponsors (3A.04):
 comply LRs
 use reasonable endeavours to ensure info to
SEHK is true & complete
 promptly advise if that changes
 cooperate in Division / Listing Committee
investigation
CAs (3A.22):
 comply LRs
 cooperate in Division / Listing Committee
investigation
39


sponsors’ role set out in 3A.11
sponsors must:
 comply with undertaking
 be closely involved in preparation of listing
documents
 ensure 9.03 & 9.05 to 9.08 complied with
 address SEHK questions etc
 accompany new applicant to meetings with
SEHK
 conduct reasonable DD to make declaration
in 3A.13
40
5.
Due diligence declaration

will cover due diligence re:




director’s declaration(s)
compliance with basic listing conditions
sufficiency of listing document
new applicant’s systems & controls
41



directors’ collective experience, qualifications &
competence
directors’ individual experience, qualifications &
competence
expert sections of listing document including
whether:
42
 factual information relied on by expert is true &
complete (unless verified by expert)
 all bases & assumptions = fair, reasonable &
complete
 expert appropriately qualified, experienced &
resourced
 expert scope of work appropriate
 expert independent
 listing document fairly represents expert views
43
6. Due diligence by sponsors


in determining what is reasonable DD refer
new PN (3A.12)
requirement for DD:

is not new

crystallises existing expectations

is not intended to replace directors’ &
experts’ obligations

will not absolve general obligations as CF
advisers under SFC administered laws &
codes
44

PN:

applies only to sponsor firms; not CAs, IFAs or
individuals

is not a checklist / minimum steps

is SEHK’s expectations of typical DD steps
(actual steps may be more or less)

is subject to what is reasonable
45

PN provides:
(at para 2)



sponsor should make inquiries until can
reasonably satisfy itself in relation to the
disclosure in the listing document
sponsor should examine with professional
scepticism the accuracy & completeness of
statements & representations made, or other
information given, to it
professional scepticism means making a
critical assessment with a questioning mind
& being alert to information that contradicts or
brings into question reliability
46
(at para 3)





[PN] sets out Exchange’s expectations of DD
sponsors will typically perform
PN does not set out actual steps that may be
appropriate in any particular case
each new applicant is unique & so will be DD steps
necessary
scope & extent of appropriate DD may be different
from (& in some cases, considerably more extensive
than) the more typical examples in [PN]
sponsor must exercise judgment as to what
investigations or steps are appropriate & the
extent of each step
47
(at para 4)



Exchange expects sponsors to document DD
planning & significant deviations from plans
includes demonstrating that turned their minds to
question of what inquiries are necessary &
reasonably practicable in the context &
circumstances
Exchange also expects sponsors to document
conclusions in respect of new applicant’s
compliance with all the conditions in Chapter 8
48
(at para 5)




may be appropriate for a sponsor to engage 3rd
party professionals to assist with tasks related to
DD
e.g. assistance in reviewing circumstances of
current legal proceedings
in such cases, Exchange expects sponsor to
satisfy itself is reasonable to rely on
information / advice provided by the 3rd party
Including e.g.:
49
(a) being satisfied as to:



competence of the professional
scope of work to be undertaken by 3rd party
methodology proposed to be used by 3rd
party
(b) being satisfied that 3rd party’s report or opinion is
consistent with other information known to sponsor
about new applicant, its business & its business
plans
50

DD expectations in PN include:
1.
re collective & individual experience,
qualifications, competence & integrity of
directors:
(a)
(b)
(c)
review directors’ past performance
assess individually & collectively directors’
financial literacy, corporate governance
experience & competence
review financial & regulatory track record of
listed companies directors previously
involved with
51
2.
re new applicant’s compliance with qualifications
for listing:
(a)
search co registry in place of incorporation
to confirm new applicant duly established
(b)
review material financial information
including:
(i)
new applicant’s & subsidiaries’ financial
statements
(ii) internal financial records, tax certificates
etc for trading record period
(c)
assess accuracy & completeness of
information submitted to demonstrate
trading record requirement
52
3.
re preparation of listing document & supporting
information:
(a)
assess financial information to be in listing
document including:
(i)
obtaining written confirmation from new
applicant & directors that properly
extracted
(ii) satisfied confirmation given after due &
careful inquiry
53
(b)
assess performance & finances, business plan &
any profit forecast / estimate - normally including
interviewing senior management & often major
suppliers, customers, creditors & bankers
(c)
assess whether financial change requiring
disclosure
(d)
assess whether reasonable to conclude issue
proceeds will be used as proposed
54
(e)
undertake physical inspection of material assets
(f)
understand new applicant’s production methods
(g)
understand how new applicant manages its
business
(h)
review business aspects of contracts material to
the business
(i)
review legal proceedings / other material disputes
(j)
analyse business aspects of economic, political or
legal conditions that may materially affect the
business
55
(k)
consider industry & target markets
(l)
assess whether appropriate documentation to
confirm material assets appropriately held by new
applicant
(m)
assess existence, validity & business aspects of
new applicant’s rights e.g. proprietary interests, IP
rights & licensing arrangements
(n)
understand technical feasibility of new product /
service / technology
(o)
assess stage of development of the business &
business plan
56
4.
re expert sections of listing document:
(a)
interview expert & review terms of engagement
& public information to assess:
(i)
expert’s qualifications, experience &
resources
(ii)
whether expert is competent to undertake
the work
57
(b)
review expert sections as to whether following
are disclosed / commented on appropriately:
(i)
factual information on which expert relies
(ii)
assumptions on which expert opinion based
(iii)
scope of work performed by expert in arriving
at opinion
58
(c) verify factual information
(d) where sponsor is aware new applicant made
formal or informal representations to expert,
assess whether representations are consistent with
sponsor’s knowledge
(e) by reference to sponsor’s knowledge assess
whether assumptions on which expert opinion is
based, are fair, reasonable & complete
59
(f) if opinion is qualified, assess whether qualification
is adequately disclosed in listing document
(g) where standard of independence is not set, obtain
written confirmation from expert that it is
independent
60
5.
re new applicant’s accounting & management
systems & directors’ appreciation of their / new
applicant’s obligations:
(a)
assess new applicant’s accounting &
management systems relevant
(b)
interview all directors / senior managers with
key responsibilities for ensuring compliance to
assess their individual & collective experience,
qualifications & competence & understanding of
relevant obligations
61
6.
to the extent sponsor finds new applicant’s
procedures / directors / key senior managers
inadequate discuss with board & recommend
remedial steps
62
7. CAs
 need only advise when consulted
 3A.23: when issuers must consult CA:

before publication of announcement, circular
or financial report

notifiable or connected transaction
contemplated

proposing to use IPO proceeds not as
disclosed

issuer’s business activities etc deviate from
forecast, estimate or other in listing
document

SEHK makes inquiry under 13.10
63
 3A.24: what CAs must do e.g.:

ensure issuer is properly guided & advised as
to LR compliance …

accompany issuer to meetings with SEHK

discuss with issuer:
 operating performance & use of proceeds
as disclosed
 waiver compliance
 whether profit forecasts will be met
 compliance with issuer’s & its directors’
undertakings
64
8.
Termination & resignation

some limitations

sponsors: 3A.17 to 3A.18

CAs: 3A.26 to 3A.27
65
Agenda:





Process
Key Objectives
Key Aspects
2 Phases
Rule Changes
 sponsors & CAs

IFAs

 transitional
Enforcement

Questions
66
IFAs:
1. Overview of rule amendments


insert new rules 13.80 to 13.87
new rules will:




require IFAs take reasonable steps to ensure
reasonable basis for opinion letter
set out what are reasonable steps (based on
sponsor PN)
set out independence test
require undertaking & declaration similar to
sponsors
67
2. Appointment


no change
13.39(6)(b) and 19.05(6)(a)(iii) provide for
appointment of IFA acceptable to SEHK
68
3. Independence




all IFAs must perform duties with impartiality
all IFAs must be independent
bright-line test (13.84)
must declare independence to SEHK (13.85(1))
69

“IFA group” is defined at 1.01 as:
(a) the IFA
(b)
any holding company of the IFA
(c)
any subsidiary of any holding company of the
IFA
(d)
any controlling shareholder of:
(i) the IFA; or
(ii)
(e)
any holding company of the IFA, which
controlling shareholder is not, itself, a
holding company of the IFA; &
any associate of any controlling shareholder
referred to in paragraph (d) above
70
This chart does not form part of the Listing Rules
Definition of “IFA group”
(: Main Board rule 1.01 and GEM rule 1.01)
Associates of
controlling
shareholder (CS)
Associates
of CS
CS of Co A that is not, itself,
a holding company of IFA
Associates
of CS
Associates
of CS
CS of IFA that is not, itself,
a holding company of IFA
Holding company of
IFA (Co A)
Subsidiary of Co A
IFA
71
This chart does not form part of the Listing Rules
Definition of “IFA group”
(incorporating effect of definition of “holding company” in s2(7) Companies Ordinance)
Associates of
controlling shareholder
(CS)
Associates of
CS
Associates of
CS
Associates of
CS
CS of IFA that is not, itself, a holding
company of IFA
CS of Co A that is not, itself, a holding
company of IFA
Holding company of IFA (Co A)
Subsidiary of Co A
Subsidiary of subsidiary
of Co A
IFA
Subsidiary of subsidiary
of Co A
Subsidiary of IFA
Subsidiary of IFA
Subsidiary of
Subsidiary of
Subsidiary of
Subsidiary of
subsidiary of IFA
subsidiary of IFA
subsidiary of IFA
subsidiary of IFA
72
 13.84 provides an IFA is not independent if:
1.
the IFA group & any director or associate of a
director of the [IFA] holds, directly or indirectly,
in aggregate more than 5% of:



the issued share capital of the issuer
another party to the transaction; or
an associate or connected person of the
issuer or another party to the transaction
73
2.
any member of the IFA group or any director or
associate of a director of the [IFA] is

an associate or connected person of the issuer
or another party to the transaction
74
3.
any of the following exceeds 10% of total assets
shown in latest consolidated financial statements of
[IFA’s] ultimate holding company (or, where is no
ultimate holding company, the [IFA]):
(a)
the aggregate of:
(i) amounts due to the IFA group from:
(A)
(B)
(C)
(D)
the issuer
the issuer’s subsidiaries
any controlling shareholder of the
issuer; &
any associates of any controlling
shareholder of the issuer; &
75
(ii)
all guarantees given by the IFA group on behalf of:
(A) the issuer
(B) the issuer’s subsidiaries
(C) any controlling shareholder of the issuer; &
(D) any associates of any controlling
shareholder of the issuer
76
(b)
the aggregate of:
(i)
amounts due from IFA group to:
(A) issuer
(B) issuer’s subsidiaries; &
(C) any controlling shareholder of issuer; &
(ii) all guarantees given on behalf of IFA group by:
(A) issuer
(B) issuer’s subsidiaries; &
(C) any controlling shareholder of issuer
77
(c)
the aggregate of:
(i)
amounts due from the IFA group to any of
the following (referred to in this rule as “the
Other Parties”):
(A) another party to transaction
(B) any holding company of another party
to transaction
(C) any subsidiary of any holding company
of another party to transaction
78
(D)
any controlling shareholder of:
(1) another party to the transaction; or
(2) any holding company of another
party to the transaction,
which controlling shareholder is not,
itself, a holding company of
another party to the transaction
(E)
any associate of any controlling
shareholder referred to in paragraph (D)
above; &
79
(ii)
all guarantees given by any of the Other
Parties on behalf of the IFA group; &
(d) the aggregate of:
(i) amounts due to the IFA group from any of the
Other Parties; &
(ii) all guarantees given by the IFA group on
behalf of any of the Other Parties
80
4.
any of the following has a current business
relationship with the issuer or another party to the
transaction, or




a director, subsidiary, holding company or
substantial shareholder of the issuer or another
party to the transaction
which would be reasonably considered to affect
the [IFA’s] independence in performing its duties
as set out in the [rules], or
might reasonably give rise to a perception that
the [IFA’s] independence would be so affected
save & except where that relationship arises
pursuant to the [IFA’s] appointment for the
purpose of providing the subject advice:
81
(a) any member of IFA group
(b) an employee of [IFA] who is directly engaged
in providing the subject advice to the issuer
(c) an associate of employee of the [IFA] who is
directly engaged in providing the subject
advice to the issuer
(d) a director of any member of IFA group; or
(e) an associate of a director of any member of
IFA group
82
5.
within 2 years prior to making declaration pursuant
to 13.85(1):
(a) a member of IFA group has served as
financial adviser to:
(i)
(ii)
issuer or its subsidiaries
another party to transaction or its
subsidiaries; or
(iii) a connected person of issuer or another
party to transaction; or
83
(b)
without limiting para (a), an employee or a
director of [IFA] who is directly engaged in
providing subject advice to issuer:
(i) was employed by or was a director of
another firm that served as a financial
adviser to any of the entities referred to at
para (a)(i) to (a)(iii) above; &
(ii) in that capacity, was directly engaged in
provision of financial advice to the issuer
or another party to the transaction
84
6.
the [IFA] or a member of IFA group is issuer’s
auditor or reporting accountant
85
4.
Due diligence by IFAs
 13.80 requires that an IFA take all reasonable
steps to satisfy itself that:
 it has a reasonable basis for making the
statements required
 there is no reason to believe any of the
information relied on by the IFA or by any
3rd party expert relied on by the IFA is not
true or omits a material fact
86
 Note 1 to 13.80 sets out Exchange’s expectations
of reasonable steps an IFA will typically perform
including:



obtaining issuer’s information / documents
relevant to assessment of fairness &
reasonableness of terms of transaction
researching relevant market & other conditions
& trends relevant to the transaction pricing
reviewing fairness, reasonableness &
completeness of any relevant assumptions or
projections
87

re any 3rd party expert:




interviewing expert
reviewing terms of engagement
where IFA is aware issuer or another party has
made formal / informal representations to expert,
assessing whether representations accord with
IFA’s knowledge
if any relevant alternative offers made, reviewing &
assessing them & reasons for rejecting them
88
Agenda:





Process
Key Objectives
Key Aspects
2 Phases
Rule Changes
 sponsors & CAs

IFAs

 transitional
Enforcement

Questions
89
Transition:

applications made on or before 19 Oct 2004:
rules will not apply

applications made on or after 20 Oct 2004 but
completed by 31 Dec 2004:
rules will not apply
90

other applications

rules will apply on 1 Jan 2005

on 1 Jan 2005 have to comply with steps
passed (e.g.: requirement for independence
statement & undertaking)

BUT Division has discretion to modify if new
applicant demonstrates compliance would
cause significant hardship
91

IFA rules will apply to all IFA appointments made
after 1 Jan 2005
92
Agenda:





Process
Key Objectives
Key Aspects
2 Phases
Rule Changes
 sponsors & CAs

IFAs

 transitional
Enforcement

Questions
93
Enforcement:

Clear message:
SEHK & SFC will continue to co-operate to ensure
failures to meet the standards are addressed
promptly & effectively
94
Tightening of structure including:

Clear policy and rules as to what is expected

Monitoring of sponsors aided by requirement that:
 conduct reasonable DD to put itself in a
position to be able to make DD declaration
 (from PN) document DD planning and
significant deviations from plans
 (from PN) document conclusions re basic
listing conditions compliance
95

Monitoring of CAs aided; e.g. could ask:
 did issuer consult CA?
 if CA consulted, when consulted and did it e.g.
ensure issuer properly guided and advised?
96

Investigation and enforcement aided by e.g.:
 having clear policy
 undertakings:


confirm contractual nexus
require (sponsors, CAs and IFAs) to
cooperate in investigations
97
Breaches may still  e.g.:

private reprimand

public statement with criticism

public censure

GEM: removal from sponsors list

impact upon fitness & properness

revocation / suspension of licence

SFO penalty
98
Agenda:





Process
Key Objectives
Key Aspects
2 Phases
Rule Changes
 sponsors & CAs

IFAs

 transitional
Enforcement

Questions
99
Sponsor must perform duties impartially (3A.06)
New applicant & its directors must assist sponsor (3A.05)
When
What
Why
IPO planning
Appoint sponsor/s
3A.02
MB: When first submit
documents to SEHK or
before
Sponsor must make
independence statement to
SEHK; make statement
even if not the independent
sponsor; assess as at the
time of making the
declaration pursuant to
3A.13
3A.03 to 3A.04,
3A.07; App 17
If sponsor / new
applicant becomes
aware of change from
independence
statement
Notify SEHK asap
3A.09
Asap after hearing of
listing application but
on or before issue of
listing document
Sponsor must submit to
SEHK declaration in terms
of 3A.14 to 3A.16 informed
by reasonable due diligence
inquiries undertaken having
regard to PN
3A.11(2), 3A.12,
3A.13; App 19
GEM: At least 25 clear
business days before
provisional hearing of
application
100
CAs must perform duties impartially (3A.25)
When
What
Why
Initial listing
Appoint CA (MB: 1+ years /
GEM: 2+ years)
3A.19
No later than
immediately CA &
issuer agree terms of
engagement or, if later,
CA commencing work
for issuer
CA must give undertaking to
SEHK
3A.21
At times set out in
3A.23
Issuer must consult with and,
if necessary, seek advice
from its CA
3A.23
When consulted
CA must discharge duties in
3A.24
3A.24
101
When
After Fixed Period
What
SEHK may direct listed
issuer to appoint a CA for
a further period
Why
3A.20
102
Questions?
103