A New Approach by Sponsors of Hong Kong IPOs

Global Risk & Investigations Practice (GRIP)

September 26, 2013

Prospective listing candidates and their sponsors will face further scrutiny and more stringent guidelines when looking to IPO on the Hong Kong Stock Exchange (SEHK) come 1 October 2013. The enhanced rules have been introduced on the back of a number of recent cases in which the Securities and Futures Commission (SFC) uncovered subpar due diligence work and inadequate disclosures on internal controls in IPO applications.       

The proposed reforms have been developed by the SFC to protect and maintain investor confidence in Hong Kong’s IPO market, a much needed reaction according to the local and international investment community. Nonetheless the market is divided, with many concerned that the new requirements will be viewed as a hurdle in this already challenging economic environment and as a result they will likely drive companies away from listing in Hong Kong.    

In a new article, FTI Consulting highlights important aspects of the SFC’s proposed reform, and we explore what impact the new regulatory regime may have on the IPO market in Hong Kong as well as how sponsors can look to approach the amended listing process.

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