Chapter 28

Due Diligence Guidelines –

Overall Management of a Public Offer

Code of Conduct Paragraphs


Key Stock Exchange Guidance Letters

Exchange Guidance Letter GL18-10

Exchange Guidance Letter GL64-13

Exchange Guidance Letter GL55-13

Exchange Guidance Letter GL57-13

Exchange Guidance Letter GL81-15

Other Key References

Companies (Exemption of Companies and Prospectuses from Compliance with Provisions) Notice (Chapter 32L of the Laws of Hong Kong)

SFC’s Guidelines on Use of Offer Awareness and Summary Disclosure Materials in Offerings of Shares and Debentures under the Companies Ordinance

SFC’s Guidelines for Electronic Public Offerings

FAQ Series 13 Rules Amendments relating to Mixed Media Offer

1. Overall Management and Delegation of Responsibilities

1.1 Standard

1.1.1 Where a listing application involves a public offer, a sponsor should act as the overall manager of the public offer. In doing so, the sponsor should:

(i) assess the likely interest in, or the reception of, the offer by the public; and

(ii) put in place sufficient arrangements and resources to ensure that the public offer and all matters ancillary thereto are conducted in a fair, timely and orderly manner. [Paragraph 17.13(a) of the Code of Conduct]

1.1.2 In discharging its obligations under Code of Conduct Paragraph 17.13(a), the sponsor should have regard to … without derogating from the sponsor’s obligation to act as the overall manager of the public offer, whether specific responsibilities in relation to the public offer should be delegated to other parties; and if so, whether these parties are competent and have sufficient capacity and resources to handle the relevant responsibilities. [Paragraph 17.13(b)(ii) of the Code of Conduct]

1.2 Guidance

The sponsor takes overall responsibility for the management of the logistics throughout the public offering process to ensure that it is conducted in a fair, timely and orderly manner. The sponsor may, however, delegate specific responsibilities to other parties as appropriate. The sponsor is expected to advise and assist the listing applicant to shortlist, select and engage a Hong Kong-based share registrar, an eIPO service provider (where applicable), a financial printer and an appropriate number of receiving bank(s) and to act as an overall manager and coordinator of these parties during the public offer.

1.3 Recommended Steps

1.3.1 The sponsor should make recommendations to the listing applicant on the proposed parties after considering all relevant factors including the expected size of the public offer, the party’s relevant experience and reputation, the proposed fees, the service proposal and the manpower that the party can allocate for that particular public offer. Each relevant party will typically be expected to provide information relating to that party’s relevant experience, the scope of its service and its fee proposal for consideration by the listing applicant and the sponsor.

1.3.2 A share registrar must be a member of the Federation of Share Registrars Limited1 and comply with the relevant code of conduct2 issued by the SFC. The sponsor should confirm that the agreements to be entered into between the listing applicant and the share registrar and receiving banks will contain appropriate commitments both to handle the expected level of applications and to accommodate higher levels of applications which it might be reasonable to anticipate. As the sponsor and the listing applicant typically outsource the process of reviewing the application forms to the share registrar, the Stock Exchange expects directors of the listing applicant and the sponsor to conduct reasonable enquiries in relation to the share registrar’s background, credentials, experience and the appropriateness of the scope of work performed in light of the code of conduct.3

1.3.3 The sponsor and the listing applicant should consider whether applications can be effectively made through eIPO. If so, the sponsor should advise the listing applicant to engage an eIPO service provider, who typically would be the share registrar. So long as eIPO applications can be made and processed in an orderly and secure manner, sponsors are encouraged to recommend to the listing applicant to use eIPO on environmentally-friendly and efficiency grounds.

1.3.4 The sponsor should ensure that the selected share registrar, financial printer and receiving banks will each enter into a service agreement or similar document with the listing applicant, on terms satisfactory to the sponsor, the listing applicant and the service provider. Such agreements should provide for, among other things, the duties of the service provider, the fees to be incurred and appropriate confidentiality obligations. If post-listing services, e.g., on-going share registration services, are to be provided, the agreement should also specify the terms and conditions of such service.

1.3.5 Parties may find it helpful to have a written closing checklist for the public offer setting out milestone dates and times as well as action items of responsible parties, although where the professional parties involved are regularly involved in public offerings this may not be considered to be necessary.


1. Section 13 of the Securities and Futures (Stock Market Listing) Rules (Chapter 571V of the Laws of Hong Kong); Listing Rule 8.16.

2. Code of Conduct for Share Registrars.

3. Exchange Guidance Letter GL55-13, Attachment IM, paragraph 22.


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.

Due Diligence Guidelines

Listing Application

Management of a Public Offer

Hong Kong Sponsors Due Diligence Guidelines

Sponsors Management of Listing Application Process

Overall Management and Delegation of Responsibilities

Hong Kong Based Share Registrar

Paragraph 17.13(a) of the Code of Conduct

Due Diligence Checklist

Due Diligence Process

Due Diligence Compliance
Paragraph 17.13(b)(ii) of the Code of Conduct
eIPO Service Provider
Closing Checklist for Public offerings

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