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FSDC releases report on disclosure of interests regime in HK
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The following is issued on behalf of the Financial Services Development Council:

     The Financial Services Development Council (FSDC) today (December 30) released a report on the disclosure of interests regime in Hong Kong, with a view to facilitating the long-term development of Hong Kong's financial services industry and enhancing Hong Kong's position as an international financial centre.

     To enhance transparency for investors, Part XV of the Securities and Futures Ordinance sets out the disclosure of interests requirements for listed corporations in Hong Kong. Market participants have for some time been expressing concerns about the overly complex disclosure rules in Hong Kong, the high compliance costs and the relatively high risk of inadvertent criminal sanctions. The complexity of Hong Kong's disclosure of interests regime also renders the disclosures actually made not as meaningful as originally intended as the investing public may not have a thorough understanding of the existing disclosure rules and exemptions in Hong Kong.

     The Securities and Futures Commission issued the "Outline of Part XV of the Securities and Futures Ordinance - Disclosure of Interests" in March 2003 to provide guidance. The outline was last updated on May 22, 2014, but such guidance based on the existing provisions or amending just some of the provisions may not be able to completely deal with the market concerns.

     The Chairman of the FSDC, Mrs Laura M Cha, said, "A reform of the disclosure of interests regime in Hong Kong is timely, as an increased investor base is being identified of late, especially with the recent launch of the Shanghai-Hong Kong Stock Connect and other regional initiatives to promote listings in Hong Kong. The report proposes changes that can help harmonise Hong Kong's disclosure regime with the disclosure rules in the world's key markets."

     The report proposes various potential improvements within the disclosure of interests regime, including expanding/enhancing the exemptions/interests to be disregarded for disclosure purposes, aligning the timeframe for filing notices, simplifying the approved lending agent regime and interests aggregation/attribution of fund management entities, and decriminalising breaches except those with criminal intent.
  
     Given the breadth of the proposed changes and areas for development within the current disclosure regime, the industry believes that a rewrite of the regime will be a welcome reform.

     The report can be downloaded from the FSDC website: www.fsdc.org.hk.

About the FSDC

     The Hong Kong Special Administrative Region Government established the FSDC in 2013 as a high-level, cross-sectoral advisory body to engage the industry in formulating proposals to promote the further development of Hong Kong's financial services industry and to map out the strategic direction for development.

     The FSDC set up five committees, namely the Policy Research Committee, the Mainland Opportunities Committee, the New Business Committee, the Market Development Committee and the Human Capital Committee.

Ends/Tuesday, December 30, 2014
Issued at HKT 16:15

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