The Hong Kong Securities and Futures Commission (SFC) released the current issue of its SFC Regulatory Bulletin: Listed Corporations, which included an update on how it will execute its authority as stipulated in the Securities and Futures (Stock Market Listing) Rules to protect investors.
The dispatch outlined some of the recent steps taken by the SFC to contain rogue behavior in the markets. Case studies on how the SFC intercedes at the early stages when it identifies serious issues with IPO applications or corporate transactions that happen post-IPO.
The SFC’s CEO, Mr Ashley Alder explained that:
Under our ‘front-loaded’ approach, we are devoting more resources to transactions which appear to be oppressive or unfairly prejudicial to shareholders, or where fraud or other serious misconduct is suspected.
To protect investors’ interest and market integrity, we will not hesitate to intervene at an early stage.
The update reminded company directors of their duty to always act in good faith and in the company’s best interests by exercising reasonable and due care, combined with diligence and expertise during the evaluation, proposal and approval of corporate transactions.
Directors were reminded that they are obligated to use their own judgement and that they should not rely solely on advice or opinions from third parties.