New HongKong IPO Rules
..."Under current rules, a company only files its prospectus, the legal document that includes information about its finances and business, when it begins selling shares. The new rules will make companies file that document when they apply to the stock exchange for permission to list their shares. That is similar to what happens in the U.S., where IPO candidates must publish their draft offering document well before they begin taking order for shares.
The SFC is also proposing that if there are "untrue statements and material omissions" in the prospectus, the lead banks, or sponsors, should be criminally liable, according to people in the market.
The law now says that company directors, promoters and "any person who has authorized the issue of the prospectus" would be criminally liable for prospectus misstatements. The SFC will ask the government to make that rule apply to not just authorized persons, but "sponsor firms" as well, the people said.
The changes won't extend to allowing class-action lawsuits over misstatements, which some say would put even more pressure on bankers.
"The threat of such suits as well as possible action by the U.S. regulators creates a major pressure point on underwriters to properly diligence their deals, which doesn't exist to the same extent in the Hong Kong market currently," said Paul Boltz, a partner at Ropes & Gray in Hong Kong."
Source: http://professional.wsj.com/article/SB10001424127887324640104578164221718160966.html?mg=reno-wsj |
