SEHK’s Consultation Conclusion on Enhanced Disciplinary Powers

In addition to the review on the profit requirement of new Main Board listing applicants, the Stock Exchange of Hong Kong Limited (“SEHK”) has also recently published its consultation conclusions on its proposed enhanced disciplinary powers.

The SEHK will implement all proposed changes to its disciplinary powers and sanctions with minor modifications. The major changes to the SEHK’s disciplinary powers include:-

  1. Extending the scope of a public statement that the retention of office by the director is prejudicial to the interest of investors (“PII Statement”) to include directors and senior management of the relevant listed issuer and any of its subsidiaries;
  2. Enhancing the available follow-on actions (in addition to suspension and cancellation) in cases involving more serious conduct to include denial of facilities of the market to that listed issuer for a specified period;
  3. Introducing a director unsuitability statement (i.e. a public statement that the director is unsuitable to be a director or senior management member of the named listed issuer) as a new sanction;
  4. Imposing secondary liability on relevant parties (including any substantial shareholder, senior management of the listed issuer or their subsidiaries) if they have caused by action or omission or knowingly participated in a contravention of the Listing Rules;
  5. Including express obligations on professional advisers to provide complete, accurate and up-to-date information when interacting with the SEHK in respect of its enquiries or investigations.

Copies of the consultation conclusion are available on the SEHK’s website.

7 June 2021
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