Chapter 25

Due Diligence Guidelines –

Record Keeping

5. Documenting Bases for Opinions, Assurances and Conclusions under Paragraphs 17.3 – 17.5 and 17.7 of the Code of Conduct

5.1 Standards

In respect of each listing assignment, a sponsor should keep records, including relevant supporting documents and correspondence, within its control relating to: … the bases for the opinions, assurances and conclusions required under paragraphs 17.3, 17.4, 17.5 and 17.7, including internal discussions and any actions taken prior to these opinions and assurances being given or conclusions being reached; [Paragraph 17.10(c)(iv) of the Code of Conduct]

5.2 Guidance

5.2.1 For guidance on compliance with requirements under Paragraphs 17.3, 17.4, 17.5 and 17.7 of the Code of Conduct, please refer to Chapters 4 and 5, 7 to 24 and Chapter 31.

5.2.2 Adequate records in relation to compliance with each item of Paragraphs 17.3, 17.4, 17.5 and 17.7 of the Code of Conduct should be retained, including the bases for the opinions, advice, guidance, assurances and conclusions required under those paragraphs. In particular, in relation to the listing assignment, the sponsor should prepare:

(a) notes summarising the sponsor’s assessment of the suitability of the listing applicant for listing on the Stock Exchange and the suitability and fitness and properness of the directors of the listing applicant, conclusions reached together with the supporting documentation, by reference to, among others, the understanding and background information about the listing applicant and its directors obtained by the sponsor;

(b) briefing notes and reports prepared for the sponsor’s internal meetings and discussions, and the key conclusions and decisions reached after such meetings and discussions. If there are areas or issues which have been highlighted for follow-up actions or additional due diligence work, records of the follow-up actions and additional due diligence work undertaken, and the results of such actions and work should be retained; and

(c) where the assistance of third party professional parties has been sought, records for such professional parties’ work in accordance with the requirements under Paragraph 17.7 of the Code of Conduct should be retained.

5.2.3 For the avoidance of doubt, records will be “adequate” for the purposes of paragraph 5.2.2 above if any relevant notes prepared by the sponsor are accurate and complete in all material respects. That is to say that relevant notes should not include or omit any statement which would render them misleading in a material respect. The sponsor is not required or expected to prepare notes which effectively provide verbatim records of discussions. This paragraph applies equally to any note prepared by the sponsor in relation to its due diligence on a listing applicant, including, without limitation, any note prepared for the purpose of paragraphs 3.3.4, 6.2.1 and 6.5.


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.

Record Keeping

Bases for Opinions

Sponsor Record Keeping of Listing

Documenting Bases for Opinions, Assurances and Conclusions

Paragraphs 17.3 – 17.5 and 17.7 of the Code of Conduct

Adequate Records in Relation to Compliance

Sponsors Assessment of the Suitability of the Listing Applicant for Listing on the Stock Exchange
Notes Prepared by Sponsor are Accurate and Complete in all Material Respects

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