SFC reminding sponsors of the need to adopt an attitude of “professional scepticism”

Abstract

Purpose

To remind sponsors to adopt an attitude of “professional skepticism” in Hong Kong IPOs.

Design/methodology/approach

Explains the Securities and Futures Commission (“SFC”)'s sanction on BOCOM International (Asia) Limited (“BIAL”) as a sign of determination to hold sponsors to account as gatekeepers to the Hong Kong capital markets.

Findings

The SFC has reprimanded and fined BIAL HK$15 million for failing to discharge its duties as a sole sponsor in a listing application for China Huinong Capital Group Company Limited (“China Huinong”), a company established in the PRC. This substantial fine reinforces the need for sponsors to ensure that they fully and properly discharge all of their duties, and that they will be held responsible for any failure to do so, even if the listing is not ultimately approved.

Practical implications

If sponsors fail to fulfil the requirements required under the sponsors’ regulatory regime, the SFC will be proactive and impose tough sanctions, even if the listing application is eventually withdrawn or returned by the SEHK.

Originality/value

Practical guidance from experienced regulatory, financial and commercial dispute resolution lawyers.

Citation

Hughes, G. and Comber, J. (2017), "SFC reminding sponsors of the need to adopt an attitude of “professional scepticism”", Journal of Investment Compliance, Vol. 18 No. 3, pp. 82-84. https://doi.org/10.1108/JOIC-06-2017-0040