Due Diligence Guidelines –
Provision of Information to Analysts
Addendum 2: Instructions to Research Analysts on Providing Notice to Issuers
Rules of the Securities and Futures Commission of Hong Kong have come into force that imposes obligations on research analysts, sponsors, issuers as regards pre-deal research. These rules apply to all IPOs of listing applicants to be listed on the Hong Kong Stock Exchange where the Form A1 is submitted on or after 31 October 2011.
In this context, research analysts are required to provide the issuer with a copy of the following notice prior to meeting with the issuer:
Notice to Issuers of SFC Requirements for
Pre-deal Research for Hong Kong listings
Rules of the Securities and Futures Commission of Hong Kong have come into force that impose obligations on research analysts, sponsors, issuers as regards pre-deal research. These rules apply to all IPOs of listing applicants to be listed on the Hong Kong Stock Exchange where the Form A1 is submitted on or after 31 October 2011.
The rules provide that it is the responsibility of the Issuer to disclose all relevant and material information in its prospectus or offering document.
To avoid the risk of liability, the directors and senior management of the Company must ensure that no material information about the Company or its securities is provided to any investment research analyst, unless the information is reasonably expected to be included in the prospectus or is publicly available. When assessing whether any such information is “material” information, the test that should be applied is whether the information is material to an investor in forming a valid and justifiable opinion of the Company and its financial condition and profitability.
This restriction covers any information provided to an analyst, directly or indirectly, formally or informally, and in writing or verbally. It covers all communications in a meeting, during a presentation, site visit or interview, or in any other context.
In addition, Paragraph 16 of the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission requires research analyst firms to have written policies and control procedures to ensure that analysts are not provided by the firm with any impermissible information.
To ensure compliance with the rules, we are requesting that you do not provide research analysts with any material information that is not reasonably expected to be in the prospectus or offering document or publicly available.
Please seek the advice of your counsel if you have any question about the rules referred to above.
Notice to Issuer (Chinese version):
HKCFEF Limited and the contributing law firms, accountants and sponsors are not offering these due diligence guidelines as legal, financial or professional advice or services and they should not be relied upon as such. These due diligence guidelines should not be used as a sole basis for any decision, action or inaction and are not meant to serve as a substitute for the advice of qualified professionals. See here for the full terms and conditions.