New conduct requirements for bookbuilding and placing activities and “sponsor coupling” requirement becoming effective on 5 August 2022

On 29 October 2021, the Securities and Futures Commission (SFC) released its consultation conclusions on (i) the proposed code of conduct on bookbuilding and placing activities in equity capital market and debt capital market transactions and (ii) the “sponsor coupling” proposal. The consultation conclusions clarified the roles played by intermediaries in capital market transactions and set out the standards of conduct expected of them in bookbuilding, pricing, allocation and placing activities. It was also concluded that for Main Board initial public offerings, there needs to be  “sponsor coupling”, which in broad terms, means, at least one of the intermediaries which heads the syndicate, also acts as a sponsor.

Consequential amendments made to (i) the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission and (ii) the Guideline to sponsors, underwriters and placing agents involved in the listing and placing of GEM stocks have been gazetted on 5 November 2021 and will become effective on 5 August 2022.

For further details, please refer to SFC’s consultation conclusions here.

25 November 2021
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