The Court of First Instance has granted the petitioner in Re Shandong Chenming Paper Holdings Limited [2023] HKCFI 2065 (“Re Shandong Chenming“) leave to appeal to the Court of Appeal from its decision to stay the winding-up petition pending resolution of an arbitrable cross-claim by the company (see our earlier news update here).

The decision followed the Court of Final Appeal’s decision in Re Guy Kwok-Hung Lam [2023] HKCFA 9 (“Re Guy Lam“), in which our highest Court dismissed a bankruptcy petition in light of an exclusive jurisdiction clause. Since the CFA’s decision, there have been various cases discussing whether the ratio of Re Guy Lam applies to winding-up proceedings where the subject companies have contended that the dispute should be referred to arbitration.

Harris J granted leave to appeal to the petitioner in Re Shandong Chenming. He reasoned that there were two other recent decisions by the Court of First Instance (namely Re Simplicity & Vogue [2023] HKCFI 1443 and Re Inversion Productions Limited [2023] HKCFI 2400) which were decided differently from Re Shandong Chenming, with both of them holding that Re Guy Lam did not apply to arbitration clauses. It was thus desirable for the Court of Appeal to reconcile the conflicting decisions by the Court of First Instance.

Harris J further reasoned that this would be a good opportunity for the Court of Appeal to clarify the application of the Lasmos approach (from Re Southwest Pacific Bauxite [2018] 2 HKLRD 449), which was noted in the his judgement in Re Shandong Chenming.

Please see here for the full decision.

Only a few months since the new dual licensing regime for virtual asset (“VA“) trading platform (“VATP“) operators came into effect on 1 June 2023 (see our previous article), the Securities and Futures Commission (the “SFC“) has issued two statements (see Warning statement on unregulated virtual asset trading platform and Statement on JPEX) expressly warning the public about certain suspicious features of JPEX (the “Warning Statements“), a VATP which has been placed on the SFC’s Alert List since July 2022, and stepped up its information dissemination and investor education.

In the meantime, upon receiving complaints about failure to withdraw assets from JPEX, the Hong Kong Police has arrested a total of 36 suspects, some of which are social media influencers, on suspicion of conspiracy to defraud.

What are the relevant offences?

As of 1 June 2023, a person commits an offence under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) (the “AMLO“) if the person:

• carries on a business of providing any VA service, or holds itself out as carrying on a business of providing any VA service, without a licence under the AMLO;
• actively markets to the Hong Kong public, whether by itself or another person on its behalf and whether in Hong Kong or from a place outside Hong Kong, any services which it provides or purports to provide, and the provision of such services, if done in Hong Kong, would constitute providing a VA service without a licence under the AMLO;
• issues, or has in its possession for the purpose of issue, to its knowledge (a) an advertisement in which the advertised person holds itself out as being prepared to provide a VA service, or a document that contains such advertisement; and (b) the advertised person is not licensed under the AMLO;
• directly or indirectly, in a transaction involving any VA (a) employs any device, scheme or artifice with intent to defraud or deceive; or (b) engages in any act, practice or course of business that is fraudulent or deceptive, or would operate as a fraud or deception; or
• makes any fraudulent misrepresentation or reckless misrepresentation for the purpose of inducing another person to enter into, or offer to enter into, an agreement to acquire, dispose of, subscribe for or underwrite any VA.

The SFC indicates that it is empowered by section 53ZTH of the AMLO to take action against any persons who are knowingly or unknowingly involved in contravention-related conduct under the AMLO.

What seems to be wrong with JPEX?

In its Warning Statements, noting that JPEX has been actively promoting its products and services to the Hong Kong public through key opinion leaders (“KOLs“) and over-the-counter VA money changers (“OTC Shops“), the SFC warned the public about, among other things, certain suspicious features about JPEX and the persons actively promoting it to the Hong Kong public:

• JPEX falsely states on its website that it is “a licensed and recognised platform to facilitate the trading of digital asset and virtual currency” and claims on its website and local advertorials to have obtained licences from certain overseas regulators to operate VATP. In fact, there are currently only two SFC-licensed VATPs, namely OSL Digital Securities Limited and Hash Blockchain Limited, both of which are licensed VATPs under the Securities and Futures Ordinance (Cap. 571) (the “SFO“) regime only;
• JPEX offers very high returns for some of its products, which the SFC describes as “investment opportunities that seem too good to be true”;
• the SFC has received complaints from (and notes media reports of) retail investors who were unable to withdraw VAs from their accounts with JPEX, or found their account balances having been reduced and altered;
• JPEX appears to offer products involving VA “deposits”, “savings” or “earnings” which are not allowed under the SFC’s regulatory regime for VATPs; and
• KOLs and OTC Shops have made false or misleading statements on social media to suggest that JPEX has applied for a VATP licence in Hong Kong, in respect of which the SFC clarifies that no entity in the JPEX group has submitted any VATP licence application to the SFC.

The SFC began making enquiries into the suspected false and misleading representations and unlicensed activities in March 2022, and deeply regretted that JPEX has publicised confidential correspondence between the SFC’s Enforcement Division and JPEX in breach of the secrecy/confidentiality obligations under section 378 of the SFO and section 76B of the AMLO.

The SFC to step up information dissemination and investor education

In light of the JPEX incident, the SFC stated in its news article that it is putting in place the following measures to disseminate information in a clear, transparent and timely manner, and to educate and warn investors about the risks of trading on unregulated VATPs:

• publishing VATP lists on its website to inform the public of the regulatory status of VATP operators which are operating in Hong Kong or actively marketing their services to Hong Kong investors. The VATP lists were launched on 29 September 2023, being (a) a list of licensed VATPs; (b) a list of VATP applicants (accompanied by a list of applicants whose licence applications have been returned, refused or withdrawn); (c) a list of closing-down VATPs; and (d) a list of VATPs which are deemed to be licensed;
• enhancing and issuing a dedicated list of suspicious VATPs on its website;
• launching a public campaign, in partnership with the Investor and Financial Education Council, to raise awareness in guarding against fraud; and
• strengthening the SFC’s intelligence gathering process towards VA-related businesses and continuing its efforts to take follow-up and enforcement actions against suspicious VATPs.

The SFC also encourages the public to file complaints via its Online Complaint Form regarding any suspicious VA-related activities they may encounter.

On 4 October 2023, the SFC announced that it has established a dedicated working group with the Hong Kong Police Force to enhance collaboration in monitoring and investigating illegal activities related to VATPs.  The working group is set up to (a) facilitate the sharing of information on suspicious activities of and breaches of VATPs; (b) implement a mechanism to assess the risks of suspicious VATPs; and (c) enhance coordination and collaboration in related investigations.

The Securities and Futures Commission (“SFC“) has recently banned a former responsible officer (“RO“) of Changjiang Corporate Finance (HK) Limited (“CJCF“) from re-entering the industry for seven years as he failed to discharge his duties as a sponsor principal in charge of five listing applications. A sponsor principal is an individual appointed by a sponsor to supervise the transaction team in respect of a listing assignment, and he/she should be involved in the making of the key decisions in the work carried out by the transaction team and should be aware of and responsible for addressing the key risks.

Some of the notable failures of the RO in this case include: in the listing application of Pacific Infinity Resources Holdings Limited (“Pacific Infinity“), CJCF effectively performed no due diligence on a Philippines legislative bill which would adversely affect Pacific Infinity’s core business (which accounted for over 90% of its revenue) in a material way. On another occasion, CJCF advised Perpetual Power Holdings Limited (“Perpetual Power“) to submit a listing application where Perpetual Power obviously lacked the requisite land title certificates in Mainland China to operate its hydropower plants.

Upon investigation, the SFC came to a conclusion that CJCF’s failures in the five listing applications were attributable to the RO’s neglect in discharging his duties as a sponsor principal, an RO and a member of CJCF’s senior management. According to the SFC, the RO failed to:-

(a). exercise due skill, care and diligence in handling the five listing applications, in breach of General Principle 2 of the Code of Conduct for Persons Licensed by or Registered with the SFC (the “Code of Conduct“);

(b). diligently supervise the transaction teams in carrying out the sponsor work, in breach of paragraph 4.2 of the Code of Conduct and paragraph 1.3.3 of the Additional Fit and Proper Guidelines for Corporations and Authorised Financial Institutions applying or continuing to act as Sponsors and Compliance Advisers; and

(c). ensure the maintenance of appropriate standards of conduct by CJCF, in breach of General Principle 9 of the Code of Conduct.

It is observed that the SFC has continued to focus its enforcement efforts on sponsors and sponsor principals in relation to IPO misconduct. The seven-year ban is the longest ban the SFC has ever imposed on an individual for sponsor principal failures and represents a strong message to the industry that failures of sponsor and sponsor principal will not be tolerated by the SFC.

Following a consultation paper issued on 19 May 2023, and its consultation conclusions released on 21 September 2023, the Securities and Future Commission (“SFC”) amended the Codes on Takeovers and Mergers and Share Buy-back (the “Codes”) with effect on 29 September 2023.

The amendments seek to codify existing practices of the Executive Director of the SFC (the “Executive”), clarify the SFC’s position on certain aspects of the Codes, streamline processes and introduce green initiatives.

Below are some of the key changes to the Codes which might be of interest. This article does not intend to be a full summary of all the amendments made to the Codes.

Expanding the definition of “close relatives”

Background –  The term “close relatives” is primarily relevant to the definitions of “acting in concert”, “associates” and “disinterested shares”. In the Codes:-

“Acting in concert”

The term “acting in concert” is crucial in determining whether a mandatory offer obligation arises under Rule 26 of the Codes.

The Codes define “acting in concert” as “comprising persons who, pursuant to an agreement or understanding (whether formal or informal), actively cooperate to obtain or consolidate “control” of a company through the acquisition by any of them of voting rights of the company”, and presume nine classes of persons to be acting in concert with others in the same class (unless the contrary is established).  The term “close relatives” is relevant to the following three of the nine classes:

• Class (2): “A company with any directors (together with their close relatives, related trusts and companies controlled by any of the directors, their close relatives or related trusts) of it or of its parent”;
• Class (6): “directors of a company (together with their close relatives, related trusts and companies controlled by such directors, their close relatives and related trusts) which is subject to an offer or where the directors have reason to believe a bona fide offer for their company may be imminent”;
• Class (8): “An individual (including any person who is accustomed to act in accordance with the instructions of the individual) with his close relatives, related trusts and companies controlled by him, his close relatives or related trusts”.

“Associates”

The term “associates” is primarily relevant to the disclosure of dealings under Rule 22 of the Codes.  Amongst other things, the term “associates” include:

• “the directors (together with their close relatives, related trusts and companies controlled by any of the directors, their close relatives or related trusts) of any subsidiary or fellow subsidiary of the first person”.

“disinterested shares”

The term “disinterested shares” is primarily relevant to the approval or acceptance threshold for a delisting or privatisation proposal. The term refers to “shares in the company other than those which are owned by the offeror or persons acting in concert with it”.

Amendment – The definition of “close relatives” is expanded to include a person’s grandparents, grandchildren, sibling’s spouse (or de facto spouse), sibling’s children, and the parents and siblings of the person’s spouse (or de facto spouse).

With the expanded definition of “close relatives”, a larger group of persons will be presumed to be “acting in concert” and/or are “associates” with disclosure obligations. Practically, this may mean more time and effort are needed to gather information on the relevant parties’ relationships and to rebut presumptions. In the case of a Rule 3.5 announcement, requiring more time for its preparation increases the burden of maintaining confidentiality. A larger group of presumed “concert parties” may also mean that less shares will qualify as “disinterested shares” in delisting or privatisation transactions.

Clarifying the definition of  “voting rights”

Background – The term “voting rights” is used extensively throughout the Codes. For example, it is used in the context of defining the concept of “control”, in determining whether a mandatory offer obligation has been triggered, whether a partial offer will be subject to certain requirements or whether an acceptance condition can be imposed or has been met.

Previously, voting rights was defined as “voting rights currently exercisable at a general meeting of a company whether or not attributable to the share capital of the company”. This caused confusion as to whether shares subject to voting restrictions (which rendered their voting rights not currently exercisable) would be treated as voting rights for the purpose of the Codes.

Amendment – A new note is added to the definition of “voting rights”, clarifying that voting rights subject to any restrictions to their exercise by agreement, by operation of law and regulations or pursuant to a court order will still be taken into account as “voting rights” for the purposes of the Codes, except for those attached to treasury shares.

The amendment provides certainty in structuring deals, for example when considering whether a mandatory offer obligation will be triggered. It also removes the potential abuse of increasing or reducing the number of voting rights to suit one’s purposes by entering into or terminating agreements to restrict the exercise of such voting rights.

“90% disinterested share” threshold for delistings and compulsory acquisitions

Background – Delistings and compulsory acquisitions following an offer are dealt with under Rule 2.2 and Rule 2.11 respectively:-

Rule 2.2 – Approval of delistings by independent shareholders

Rule 2.2 provides that neither the offeror (nor any persons acting in concert with the offeror) may vote at any meetings of the offeree company’s shareholders (convened in accordance with the Listing Rules) to approve a delisting. The resolution to approve the delisting must be subject to:

(a) approval by at least 75% of the votes attaching to the disinterested shares that are cast either in person or by proxy at a duly convened meeting of the holders of the disinterested shares;

(b) the number of votes cast against the resolution being not more than 10% of the votes attaching to all disinterested shares; and

(c) the offeror being entitled to exercise, and exercising, its rights of compulsory acquisition.

The Note to Rule 2.2 provides that the Executive is prepared to waive the compulsory acquisition requirement in (c) above for an offeree company which is incorporated in a jurisdiction where compulsory acquisition is not available, if arrangements are put in place to meet certain conditions, one of which is:

• “the resolution to approve the delisting is subject to the offeror having received valid acceptances amounting to 90% of the disinterested shares.”

Rule 2.11 – Exercise of rights of compulsory acquisition

Rule 2.11 provides that where an offeror seeks to acquire or privatise a company through the use of compulsory acquisition rights, it can only be exercised if:

“acceptances of the offer and purchases (in each case of the disinterested shares) made by the offeror and persons acting in concert with it during the period of 4 months after posting the initial offer document total 90% of the disinterested shares.”

While both the Note to Rule 2.2 (regarding companies in jurisdictions without compulsory acquisitions) and Rule 2.11(regarding companies in jurisdictions with compulsory acquisitions) contain a similar requirement – the acquisition of 90% of the disinterested shares, Rule 2.11 explicitly includes purchases made by the offeror (and its concert parties) in determining whether the 90% threshold has been met, while the Note to Rule 2.2 is silent as to whether such purchases would also be included in determining the 90% threshold. In practice, the Executive has allowed such purchases to be included in determining the 90% threshold.

Moreover, while the existing language of Rule 2.11 only counts purchases made after the posting of the initial offer document towards the 90% threshold, in practice the Executive has always included shares purchased after the publication of a Rule 3.5 firm intention announcement.

Amendments – The SFC revised both the Note to Rule 2.2 and Rule 2.11 to align them in allowing shares acquired by an offeror and its concert parties from the date of the Rule 3.5 announcement to be counted towards the 90% threshold under both rules.

The amendments provide certainty and flexibility in meeting the 90% threshold requirement as required in the Codes. Nevertheless, for Rule 2.11, as compulsory acquisition rights are governed by the company law of the place of incorporation of the offeree company, care must still be taken in determining whether the corresponding threshold has been met under the relevant law.

Attendance and voting at meetings held to consider a scheme of arrangement, capital reorganisation or a delisting proposal

Background – Whether the deal is a privatisation by way of a scheme of arrangement, or an offer leading to delisting, both require shareholders’ approval at a duly convened meeting, as shown below.

Rule 2.10

Pursuant to Rule 2.10, a privatisation by way of a scheme of arrangement may only be implemented if the following requirements are met:

(a) the scheme is approved by at least 75% of the votes attached to the disinterested shares that are cast either in person or by proxy at a duly convened meeting of the holders of disinterested shares; and

(b) the number of votes cast against the resolution to approve the scheme at such meeting is not more than 10% of the votes attaching to all disinterested shares

Rule 2.2

Rule 2.2 provides that the resolution to approve a delisting must be subject to:

(a) approval by at least 75% of the votes attaching to the disinterested shares that are cast either in person or by proxy at a duly convened meeting of the holders of the disinterested shares;

(b) the number of votes cast against the resolution being not more than 10% of the votes attaching to all disinterested shares; and

(c) the offeror being entitled to exercise, and exercising, its rights of compulsory acquisition.

Note: The first two conditions of Rule 2.2 are equivalent to those provided in Rule 2.10.

In SFC’s “Takeovers Bulletin” of December 2021^[1], the Executive noted from two recent local judgments^[2] that there were two schools of thought regarding the form of shareholders’ meetings under Rule 2.10:-

• “Prohibition view” – the offeror and his concert parties are prohibited from voting on the relevant resolution.
• “Non-prohibition view” – the offeror and his concert parties are not prohibited from voting, but their votes cannot be counted for the purposes of complying with the Takeovers Code.

Prior to these recent judgments, the Executive had always taken the non-prohibition view to be the correct view, as it would allow the Codes to operate alongside the company laws of those jurisdictions which permitted an offeror and its concert parties to attend court meetings in a privatisation scheme. The adoption of the “prohibition view” in the case of Re Chong Hing Bank Limited created uncertainty.

Amendments – References to “duly convened meeting of the holders of the disinterested shares” in Rules 2.2 and 2.10 are replaced with “duly convened meeting of shareholders”, and a new Note 8 is added to Rule 2 to clarify that the expression “duly convened meetings of shareholders” refers to shareholders’ meetings which are duly convened in accordance with an offeree company’s constitutional documents and the company law of its place of incorporation. For the purposes of the Codes, any votes cast by the offeror and its concert parties will simply be disregarded.

The amendments remove the uncertainty created by Re Chong Hing Bank Limited and confirm the “non-prohibition view” regarding shareholders’ meetings, thereby allowing the Codes to operate alongside the company laws of different jurisdictions.

Irrevocable commitments

Background – Often as a tactic to securing a deal, an offeror might seek irrevocable commitments from significant shareholders to accept (or not accept) an offer or vote favorably on resolutions relating to an offer.

Under the previous version of the Codes, an offeror may only approach “a very restricted number of sophisticated investors who have a controlling shareholding” for irrevocable commitments. In all other cases the Executive will have to be consulted.

Amendment – Note 4 to Rules 3.1, 3.2 and 3.3 is amended to streamline the process of obtaining irrevocable commitments such that:-

• an offeror does not need to consult the Executive in advance before approaching a shareholder with a “material interest”. In this context, a shareholder has a “material interest” when he and his concert parties control directly or indirectly 5% or more of the voting rights of an offeree company);
• an offeror must continue to consult the Executive when approaching “non-material” shareholders; and
• the maximum number of shareholders an offeror can approach is six, which includes both shareholders who have a material interest and those who do not.

The amendment provides certainty and flexibility in structuring a deal.

Adding the “market capitalization” test for the purpose of applying the Chain Principle

Background – In determining whether a “chain principle offer” has to be made when someone acquires statutory control of a company (the first company) which directly or indirectly controls 30% or more of the voting rights of a listed company (the second company), the SFC will apply a principle-based approach on a case by case basis and consider: (a) whether the holding in the second company is significant in relation to the first company, based on such factors as the assets and profits of the two companies (the “Substantiality Test”), and (b) whether one of the main purposes of acquiring control of the first company was to secure control of the second company (the “Purpose Test”). If either the Substantiality Test or the Purpose Test is satisfied, the Executive will require a “chain principle offer” to be made.

Amendments – Codify the existing practice and add the following guidance to Note 8 to Rule 26.1 in respect of the Substantiality Test:-

• where both companies in question are listed companies, the SFC will also consider the respective market capitalization of the two companies under the Substantiality Test.
• Where anomalous results would be produced from using the asset and profit values in the most recent audited statements, a “look-back” period of the three most recent audited financial periods can be taken into account.

Practice Note 19 has been revised to provide further guidance on the Executive’s approach to the Substantiality Test, including the specific line items for assets and profits to be taken into account and the reference dates for market capitalisation.

Executive granted explicit powers to end an offer period and to issue “put up or shut up” orders

Background – Under the previous version of the Codes:

• An offer period would end upon the occurrence of one of the events described in the definition of “offer period”, none of which events is within the control of the offeree company while some require certain initiative on the part of the offeror or potential offeror. As an offeree company is subject to additional requirements and restrictions once an offer period starts, a prolonged offer period may affect the company’s normal business operations.
• The Executive does not have an express power to end an offer period and would need to rely on his implicit power to do so under Section 2.1 of the Introduction to the Codes which gives the Executive the power to modify or relax any rule under the Codes.

Amendments – The Codes are amended to expressly grant the Executive the powers to:-

• end an offer period; and
• to issue a put up or shut up order (“PUSU order”) (i.e. requiring a potential offeror to announce its firm intention to make an offer within a set time period (put up), or to announce that it will no longer proceed with an offer (shut up), which is one of the events that will end an offer as described under the definition of “offer period”).

In determining whether to issue a PUSU order, the Executive will take all relevant factors into account, including: (a) the current duration of the offer period; (b) the reason for the offeror’s delay in issuing a firm intention announcement; (c) the proposed offer timetable; (d) any adverse effects that the offer period has had on the offeree company; and (e) the conduct of the parties to the offer.

Such amendments give certainty to offer periods and allow offeree companies to avoid unnecessary disruptions to normal business operations caused by prolonged offer periods.

Definition of on-market share buy-back

Background – On-market share buy-back is the most utilized “exemption” to the more stringent requirements for share buy-backs under the Codes.

Amendment – The definition of “on-market share buy-back” is amended to clarify that (i) such share buy-backs must be made pursuant to the Stock Exchange’s automatic order matching system; and (ii) the company and its directors must not have any involvement in the solicitation, selection or identification of the seller of the securities, whether directly or indirectly.

The amendment prevents companies from arranging what is in effect a “pre-selected” off-market share buy-back conducted via the Stock Exchange’s facilities to enjoy the “on-market share buy-back” exemption.

Takeaways

This was the first time since 2018 where the Executive has conducted a comprehensive review of the Codes. Overall, the amendments provide greater certainty, clarified market concerns regarding the application of the Codes, as well as streamlined the relevant processes.

For a complete overview of the amendments made to the Code, please refer to the SFC’s Consultation Conclusions.

^[1] The Takeovers Bulletin of December 2021 can be retrived from: 20211229SFC-Takeover-Bulletine.pdf

^[2] See (i) Re Cosmos Machinery Enterprises Ltd (HCMP 601/2021, [2021] HKCFI 2088) in which the “non-prohibition view” was adopted and (ii) Re Chong Hing Bank Limited (HCMP 968/2021, [2021] HKCFI 3091). ) in which the “prohibition view” was adopted.

The Securities and Futures Commission (“SFC“) is seeking public input on proposed guidelines to regulate market soundings, which are pre-transaction communications used by market participants to gauge investor interest and assist in determining transaction details.

The below summarises the SFC’s proposed guidelines:

Definition

• Market sounding involves the communication of non-public information, regardless of its price-sensitive nature, with potential investors prior to announcing a securities transaction.
• It aims to gauge investor interest and determine transaction specifications, such as size, pricing, structure, and selling method.
• Market sounding is conducted by licensed or registered individuals, acting as “Market Sounding Intermediaries”, which include the Disclosing Person sharing information and the Recipient Person receiving it

Carve-outs

The guidelines do not apply to communications regarding:

• speculative transactions or trade ideas proposed without consulting the potential Market Sounding Beneficiary[1] or lacking certainty;
• transactions in size, value, structure or selling method commensurate with ordinary day-to-day trade execution; and
• public offerings of securities.

Core Principles for Market Sounding Intermediaries

1. Market integrity.
2. Robust governance.
3. Effective policies and procedures specifying expectations in conducting market soundings.
4. Adequate physical and electronic information barriers.
5. Review and monitoring controls to detect suspicious behaviours, unauthorized disclosure, or information misuse.
6. Utilise senior-approved recorded communication channels

Obligations of Disclosing Persons

• Pre-sounding procedures: Assess if disclosed information is non-public, obtain the Market Sounding Beneficiary’s consent for market soundings and determine disclosure details for recipients.
• Standardised script: Use an approved script, and provide written confirmation to the Recipient Person summarising content of the market sounding communications.
• Cleansing: Determine whether information ceased to be non-public and inform the Recipients Person accordingly.
• Record keeping: For at least seven years.

Obligations of Recipient Persons

• Handling of market sounding requests: Designate trained person(s) to receive market soundings, and inform the Disclosing Person his preference for receiving market soundings.
• Record keeping: For at least seven years.

The SFC’s proposals will undergo a 2-month public consultation, with the final guidelines taking effect upon gazettal. A further 6-month transition period will be provided for industry compliance.

These guidelines aim to address divergent practices, promote market integrity, and establish standards. Market participants and interested parties are encouraged to offer feedback on the proposed guidelines.

Access the full consultation paper here for more details.

[1] Market Sounding Beneficiary means a client, an issuer or an existing shareholder selling in the secondary market.