5 August 2021
On 8 July 2021, The Stock Exchange of Hong Kong Limited (the “Exchange”), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (“HKEx”), published a revised Enforcement Policy Statement (the “Policy Statement”) and a revised Enforcement Sanctions Statement (the “Sanctions Statement”).
The revised Policy Statement and Sanctions Statement reflect changes to enforcement-related Listing Rules, as well as providing important information about the Exchange’s approach to and objectives of enforcement, the Policy Statement also sets out the Exchanges’ latest enforcement priorities of: responsibility, controls and culture, and cooperation. These priorities, which will replace the enforcement themes in place since 2017, describe the areas in which the Exchange is targeting its enforcement resources.
Enforcement objectives
Through its enforcement actions, the Exchange seeks to:
-
deter future breaches;
-
educate the market;
-
influence compliance culture and attitude; and
-
enhance corporate governance.
Sanctions available
The Listing Committee seeks to punish past conduct with the application of the sanctions available but of equal importance is to ensure improvement in the future and enhance corporate governance.
The sanctions which the Listing Committee can impose, upon making findings of breaches, and the parties that may be subject to such sanctions, are set out in the Listing Rules. These sanctions include, amongst others, a graduated range of public reputational sanctions (public statement of criticism; public censure; prejudice statement; director unsuitability statement).
The Listing Committee may also direct remedial action to be taken (e.g. an internal control review, the appointment of a compliance adviser, or directors’ training on regulatory and legal topics including Listing Rule compliance), the denial of facilities of the market to an issuer, a trading suspension, or the cancellation of listing of the issuer.
The Sanctions Statement has also been updated to reflect current enforcement policy, and the changes to the Listing Rules relating to disciplinary sanctions and powers which came into effect on 3 July 2021.
For further information, please contact:
Emma Tsang, Director, Hauzen LLP
info@hauzen.hk
