Regulation of Sponsors

1

• Regulation of Sponsors
• Independent Financial Advisers
• HKEx briefings
• 7, 8 13 December 2004

2

• In October HKEx SFC announced
• Consultation conclusions
• Rule amendments (commence 1 January 2005 -
  subject to transitional arrangements)

3
Agenda

• Process
• Key Objectives
• Key Aspects
• 2 Phases
• Rule Changes

• sponsors CAs
• IFAs
• transitional

• Enforcement
• Questions

4
Process

• Conclusions informed by extensive market
  consultation
• In conjunction with May 2003 consultation paper
• Conclusions rule amendments approved by SEHK
  Commission

5
Agenda

• Process
• Key Objectives
• Key Aspects
• 2 Phases
• Rule Changes

• sponsors CAs
• IFAs
• transitional

• Enforcement
• Questions

6
Key Objectives

• Sponsors play an important role in HK. Variance
  of expectations
• To address expectation gap

• clear framework for role of sponsors, compliance
  advisers IFAs
• make it abundantly clear what is expected of them
  issuers that appoint them

7
Agenda

• Process
• Key Objectives
• Key Aspects
• 2 Phases
• Rule Changes

• sponsors CAs
• IFAs
• transitional

• Enforcement
• Questions

8
Key Aspects Conclusions amended rules

• WILL codify current expectations
• WILL clearly set out

• when sponsors, CAs IFAs must be appointed
• when sponsors, CAs IFAs must be independent
  what is independence

9

• role of sponsors, CAs IFAs including due
  diligence
• role of issuers in assisting sponsors CAs

10

• WILL make it clear that sponsors, CAs IFAs can
  only do what is reasonable appropriate
• WILL NOT expect sponsors to verify expert
  reports/ be experts
• WILL allow engaging of 3rd party professionals
  (but sponsor must ensure work not substandard)
• WILL NOT shift obligations from directors/experts
  to sponsors

11
Agenda

• Process
• Key Objectives
• Key Aspects
• 2 Phases
• Rule Changes

• sponsors CAs
• IFAs
• transitional

• Enforcement
• Questions

12
2 Phases
1. Why? Initial continuing eligibility
to be solely in SFCs licensing regime

• 2. How?
• 1 January 2005 most amendments
• late 2005 new SFC regime further
  consequential amendments

13
Agenda

• Process
• Key Objectives
• Key Aspects
• 2 Phases
• Rule Changes

• sponsors CAs
• IFAs
• transitional

• Enforcement
• Questions

14
Rule Changes On 1 January, rules amended to

• include new chapter re sponsors CAs
• (MB Ch.3A GEM Ch.6A)
• include new rules re IFAs
• (MB 13.80 to 13.87 GEM 17.92 to 17.99)
• include new PN re due diligence by sponsors
• (MB PN21 GEM PN2)
• address incidental amendments

15
New MB GEM rules largely identical
Differences include e.g.

• 6A.02 re eligibility (MB sponsor to be
  acceptable to SEHK GEM sponsor to be admitted
  to list of acceptable sponsors)
• 6A.19 re length of appointment of CA (MB 1
  years GEM 2 years)
• different incidental amendments

16
Agenda

• Process
• Key Objectives
• Key Aspects
• 2 Phases
• Rule Changes

• sponsors CAs
• IFAs
• transitional

• Enforcement
• Questions

17

• Sponsors compliance advisers
• 1. Appointment
• 3 scenarios

• pre-listing ( deemed new listings)
• immediately post-listing
• other time as directed (3A.20)

18

• Pre-listing deemed new listings

• sponsor to assist with IPO (3A.02)
• no co-sponsorship BUT can engage more than
• 1 sponsor
• if more than 1 (3A.10)

• advise primary communication channel
• all equally responsible
• all must act impartially (3A.06)
• only 1 need be independent
• (come back to independence)

19

• Post-listing

• CA for 1 year (3A.19) (GEM - 2 years)
• can be different to sponsor
• need not be independent but must act impartially

20

• 2. Eligibility
• Until 2005

• sponsors status quo i.e.

MB acceptable to SEHK GEM on eligible list

• CAs adopt sponsor regime

• After 2005 determined by SFC

21

• 3. Independence
• all sponsors CAs must perform duties with
  impartiality
• sponsors must be independent if more than 1,
  then only 1 need be
• listing document must disclose each sponsors
  independence if not independent, how

22

• all sponsors must give SEHK statement re
  independence addressing criteria (3A.08)
• independence test bright line test to be
  applied by sponsor / issuer (3A.07)

23

• sponsor group is defined at 3A.01(9) as

1. a sponsor
2. any holding company of the sponsor
3. any subsidiary of any holding company of the
   sponsor

(d) any controlling shareholder of

• the sponsor or
• any holding company of the sponsor

which controlling shareholder is not, itself, a
holding company of the sponsor
(e) any associate of any controlling shareholder
referred to in paragraph (d) above
24
This chart does not form part of the Listing Rules
Definition of sponsor group ( Main Board rule
3A.01 and GEM rule 6A.01)
Associates of controlling shareholder (CS)
Associates of CS
Associates of CS
Associates of CS
CS of Co A that is not, itself, a holding company
of sponsor
CS of sponsor that is not, itself, a holding
company of sponsor
Holding company of sponsor (Co A)
Subsidiary of Co A
Sponsor
25
This chart does not form part of the Listing Rules
Definition of sponsor group (incorporating
effect of definition of holding company in
s2(7) Companies Ordinance)
Associates of controlling shareholder (CS)
Associates of CS
Associates of CS
Associates of CS
CS of Co A that is not, itself, a holding company
of sponsor
CS of sponsor that is not, itself, a holding
company of sponsor
Holding company of sponsor (Co A)
Subsidiary of Co A
Sponsor
Subsidiary of subsidiary of Co A
Subsidiary of sponsor
Subsidiary of subsidiary of Co A
Subsidiary of sponsor
Subsidiary of subsidiary of sponsor
Subsidiary of subsidiary of sponsor
Subsidiary of subsidiary of sponsor
Subsidiary of subsidiary of sponsor
26

• 3A.07 provides sponsor is not independent if

(1) the sponsor group any director or associate
of a director of the sponsor collectively holds
or will hold,

• directly or indirectly
• more than 5 of the issued share capital of the
  new applicant

• save except where that holding arises as a
  result of an underwriting obligation

27

• (2) the fair value of the direct or indirect
  current or prospective shareholding of the
  sponsor group in the new applicant

• exceeds or will exceed 15 of the net equity
  shown in the latest consolidated financial
  statements of
• the sponsors ultimate holding company or
• where there is no ultimate holding company, the
  sponsor

28

• (3) any member of the sponsor group or any
  director or associate of a director of the
  sponsor is

• an associate or connected person of the new
  applicant

29

• (4) 15 or more of the proceeds raised from the
  initial public offering of the new applicant

• are to be applied directly or indirectly to
  settle debts due to the sponsor group
• save except where those debts are on account of
  fees payable to the sponsor group for subject
  sponsorship services

30

• (5) the aggregate of

• amounts due to the sponsor group from the new
  applicant its subsidiaries
• (b) all guarantees given by the sponsor group on
  behalf of the new applicant its subsidiaries

exceeds 30 of the total assets of the new
applicant
31

• (6) the aggregate of
• (a) amounts due to the sponsor group from

(i) the new applicant (ii) the new
applicants subsidiaries (iii) any controlling
shareholder of the new applicant (iv) any
associates of any controlling shareholder of the
new applicant
32
(b) all guarantees given by the sponsor group on
behalf of
(i) the new applicant (ii) the new applicants
subsidiaries (iii) any controlling shareholder of
the new applicant (iv) any associates of any
controlling shareholder of the new applicant
exceeds 10 of the total assets shown in the
latest consolidated financial statements of the
sponsors ultimate holding company (or the
sponsor)
33

• (7) the fair value of the direct or indirect
  shareholding of

• (a) a director of the sponsor
• (b) a director of any holding company of the
  sponsor
• (c) an associate of a director of the sponsor or
• an associate of a director of any holding company
  of the sponsor
• in the new applicant exceeds HKD 5 million

34

• (8) an employee or director of the sponsor who is
  directly engaged in providing the subject
  sponsorship services to the new applicant, or

• an associate of such an employee or director
• holds or will hold shares in the new applicant or
• has or will have a beneficial interest in shares
  in the new applicant

35

• (9) any of the following has a current business
  relationship with the new applicant or

• a director, subsidiary, holding company or
  substantial shareholder of the new applicant
• which would be reasonably considered to affect
  the sponsors independence, or
• might reasonably give rise to a perception that
  the sponsors independence would be so affected
• except where relationship arises pursuant to
  subject sponsorship services

36

• (a) any member of the sponsor group
• (b) an employee of the sponsor who is directly
  engaged in providing the subject sponsorship
  services to the new applicant
• an associate of an employee of the sponsor who
  is directly engaged in providing the subject
  sponsorship services to the new applicant
• (d) a director of any member of the sponsor
  group or
• (e) an associate of a director of any member of
  the sponsor group

37
(10) the sponsor or a member of the sponsor group
is the auditor or reporting accountant of the
new applicant.
38

• 4. Roles

sponsors proactive
CAs reactive
39

• must give undertakings

• sponsors (3A.04)
• comply LRs
• use reasonable endeavours to ensure info to SEHK
  is true complete
• promptly advise if that changes
• cooperate in Division / Listing Committee
  investigation
• CAs (3A.22)
• comply LRs
• cooperate in Division / Listing Committee
  investigation

40

• sponsors role set out in 3A.11
• sponsors must
• comply with undertaking
• be closely involved in preparation of listing
  documents
• ensure 9.03 9.05 to 9.08 complied with
• address SEHK questions etc
• accompany new applicant to meetings with SEHK
• conduct reasonable DD to make declaration in
  3A.13

41

• 5. Due diligence declaration
• will cover due diligence re

• directors declaration(s)
• compliance with basic listing conditions
• sufficiency of listing document
• new applicants systems controls

42

• directors collective experience, qualifications
  competence
• directors individual experience, qualifications
  competence
• expert sections of listing document including
  whether

43

• factual information relied on by expert is true
  complete (unless verified by expert)
• all bases assumptions fair, reasonable
  complete
• expert appropriately qualified, experienced
  resourced
• expert scope of work appropriate
• expert independent
• listing document fairly represents expert views

44

• 6. Due diligence by sponsors
• in determining what is reasonable DD refer new PN
  (3A.12)
• requirement for DD

• is not new
• crystallises existing expectations
• is not intended to replace directors experts
  obligations
• will not absolve general obligations as CF
  advisers under SFC administered laws codes

45

• PN
• applies only to sponsor firms not CAs, IFAs or
  individuals
• is not a checklist / minimum steps
• is SEHKs expectations of typical DD steps
  (actual steps may be more or less)
• is subject to what is reasonable

46

• PN provides

(at para 2)

• sponsor should make inquiries until can
  reasonably satisfy itself in relation to the
  disclosure in the listing document
• sponsor should examine with professional
  scepticism the accuracy completeness of
  statements representations made, or other
  information given, to it
• professional scepticism means making a critical
  assessment with a questioning mind being alert
  to information that contradicts or brings into
  question reliability

47
(at para 3)

• PN sets out Exchanges expectations of DD
  sponsors will typically perform
• PN does not set out actual steps that may be
  appropriate in any particular case
• each new applicant is unique so will be DD
  steps necessary
• scope extent of appropriate DD may be different
  from ( in some cases, considerably more
  extensive than) the more typical examples in PN
• sponsor must exercise judgment as to what
  investigations or steps are appropriate the
  extent of each step

48
(at para 4)

• Exchange expects sponsors to document DD planning
  significant deviations from plans
• includes demonstrating that turned their minds to
  question of what inquiries are necessary
  reasonably practicable in the context
  circumstances
• Exchange also expects sponsors to document
  conclusions in respect of new applicants
  compliance with all the conditions in Chapter 8

49
(at para 5)

• may be appropriate for a sponsor to engage 3rd
  party professionals to assist with tasks related
  to DD
• e.g. assistance in reviewing circumstances of
  current legal proceedings
• in such cases, Exchange expects sponsor to
  satisfy itself is reasonable to rely on
  information / advice provided by the 3rd party
• Including e.g.

50

• (a) being satisfied as to

• competence of the professional
• scope of work to be undertaken by 3rd party
• methodology proposed to be used by 3rd party

(b) being satisfied that 3rd partys report or
opinion is consistent with other information
known to sponsor about new applicant, its
business its business plans
51

• DD expectations in PN include

1. re collective individual experience,
qualifications, competence integrity of
directors
(a) review directors past performance (b) asses
s individually collectively directors
financial literacy, corporate governance
experience competence (c) review financial
regulatory track record of listed companies
directors previously involved with
52
2. re new applicants compliance with
qualifications for listing
(a) search co registry in place of incorporation
to confirm new applicant duly established
(b) review material financial information
including

1. new applicants subsidiaries financial
   statements
2. internal financial records, tax certificates etc
   for trading record period

(c) assess accuracy completeness
of information submitted to demonstrate trading
record requirement
53
3. re preparation of listing document
supporting information
(a) assess financial information to be in
listing document including

1. obtaining written confirmation from new applicant
   directors that properly extracted
2. satisfied confirmation given after due careful
   inquiry

54
(b) assess performance finances, business plan
any profit forecast / estimate - normally
including interviewing senior management often
major suppliers, customers, creditors bankers
(c) assess whether financial change requiring
disclosure
(d) assess whether reasonable to conclude issue
proceeds will be used as proposed
55
(e) undertake physical inspection of material
assets (f) understand new applicants production
methods (g) understand how new applicant manages
its business (h) review business aspects of
contracts material to the business (i) review
legal proceedings / other material
disputes (j) analyse business aspects of
economic, political or legal conditions that may
materially affect the business
56

(k) consider industry target markets (l) assess
whether appropriate documentation to confirm
material assets appropriately held by new
applicant (m) assess existence, validity
business aspects of new applicants rights e.g.
proprietary interests, IP rights licensing
arrangements (n) understand technical feasibility
of new product / service / technology (o) assess
stage of development of the business business
plan
57
4. re expert sections of listing document
(a) interview expert review terms of engagement
public information to assess

1. experts qualifications, experience resources
2. whether expert is competent to undertake the work

58
(b) review expert sections as to whether
following are disclosed / commented on
appropriately

1. factual information on which expert relies
2. assumptions on which expert opinion based
3. scope of work performed by expert in arriving at
   opinion

59
(c) verify factual information (d) where sponsor
is aware new applicant made formal or informal
representations to expert, assess whether
representations are consistent with sponsors
knowledge (e) by reference to sponsors
knowledge assess whether assumptions on which
expert opinion is based, are fair, reasonable
complete
60
(f) if opinion is qualified, assess whether
qualification is adequately disclosed in listing
document (g) where standard of independence is
not set, obtain written confirmation from expert
that it is independent
61
5. re new applicants accounting management
systems directors appreciation of their / new
applicants obligations

1. assess new applicants accounting management
   systems relevant
2. interview all directors / senior managers with
   key responsibilities for ensuring compliance to
   assess their individual collective experience,
   qualifications competence understanding of
   relevant obligations

62
6. to the extent sponsor finds new applicants
procedures / directors / key senior managers
inadequate discuss with board recommend
remedial steps
63

• 7. CAs

• need only advise when consulted
• 3A.23 when issuers must consult CA

• before publication of announcement, circular or
  financial report
• notifiable or connected transaction contemplated
• proposing to use IPO proceeds not as disclosed
• issuers business activities etc deviate from
  forecast, estimate or other in listing document
• SEHK makes inquiry under 13.10

64

• 3A.24 what CAs must do e.g.

• ensure issuer is properly guided advised as to
  LR compliance
• accompany issuer to meetings with SEHK
• discuss with issuer

• operating performance use of proceeds as
  disclosed
• waiver compliance
• whether profit forecasts will be met
• compliance with issuers its directors
  undertakings

65

• 8. Termination resignation

• some limitations

• sponsors 3A.17 to 3A.18
• CAs 3A.26 to 3A.27

66
Agenda

• Process
• Key Objectives
• Key Aspects
• 2 Phases
• Rule Changes

• sponsors CAs
• IFAs
• transitional

• Enforcement
• Questions

67

• IFAs
• 1. Overview of rule amendments

• insert new rules 13.80 to 13.87
• new rules will

• require IFAs take reasonable steps to ensure
  reasonable basis for opinion letter
• set out what are reasonable steps (based on
  sponsor PN)
• set out independence test
• require undertaking declaration similar to
  sponsors

68

• 2. Appointment
• no change
• 13.39(6)(b) and 19.05(6)(a)(iii) provide for
  appointment of IFA acceptable to SEHK

69

• 3. Independence
• all IFAs must perform duties with impartiality
• all IFAs must be independent
• bright-line test (13.84)
• must declare independence to SEHK (13.85(1))

70

• IFA group is defined at 1.01 as

1. the IFA
2. any holding company of the IFA
3. any subsidiary of any holding company of the IFA

(d) any controlling shareholder of

• the IFA or
• any holding company of the IFA, which controlling
  shareholder is not, itself, a holding company of
  the IFA

(e) any associate of any controlling shareholder
referred to in paragraph (d) above
71
This chart does not form part of the Listing Rules
Definition of IFA group ( Main Board rule 1.01
and GEM rule 1.01)
Associates of controlling shareholder (CS)
Associates of CS
Associates of CS
Associates of CS
CS of Co A that is not, itself, a holding company
of IFA
CS of IFA that is not, itself, a holding company
of IFA
Holding company of IFA (Co A)
Subsidiary of Co A
IFA
72
This chart does not form part of the Listing Rules
Definition of IFA group (incorporating effect
of definition of holding company in s2(7)
Companies Ordinance)
Associates of controlling shareholder (CS)
Associates of CS
Associates of CS
Associates of CS
CS of IFA that is not, itself, a holding company
of IFA
CS of Co A that is not, itself, a holding company
of IFA
Holding company of IFA (Co A)
Subsidiary of Co A
IFA
Subsidiary of subsidiary of Co A
Subsidiary of IFA
Subsidiary of subsidiary of Co A
Subsidiary of IFA
Subsidiary of subsidiary of IFA
Subsidiary of subsidiary of IFA
Subsidiary of subsidiary of IFA
Subsidiary of subsidiary of IFA
73

• 13.84 provides an IFA is not independent if

1. the IFA group any director or associate of a
director of the IFA holds, directly or
indirectly, in aggregate more than 5 of

• the issued share capital of the issuer
• another party to the transaction or
• an associate or connected person of the issuer or
  another party to the transaction

74

• 2. any member of the IFA group or any director or
  associate of a director of the IFA is

• an associate or connected person of the issuer or
  another party to the transaction

75
3. any of the following exceeds 10 of total
assets shown in latest consolidated financial
statements of IFAs ultimate holding company
(or, where is no ultimate holding company, the
IFA)

• (a) the aggregate of
• (i) amounts due to the IFA group from

(A) the issuer (B) the issuers
subsidiaries (C) any controlling shareholder of
the issuer (D) any associates of any
controlling shareholder of the issuer
76

• (ii) all guarantees given by the IFA group on
  behalf of
• (A) the issuer
• (B) the issuers subsidiaries
• (C) any controlling shareholder of the issuer
  
• (D) any associates of any controlling
  shareholder of the issuer

77
(b) the aggregate of

• (i) amounts due from IFA group to
• (A) issuer
• (B) issuers subsidiaries
• (C) any controlling shareholder of issuer

(ii) all guarantees given on behalf of IFA group
by (A) issuer (B) issuers subsidiaries
(C) any controlling shareholder of issuer
78
(c) the aggregate of

• (i) amounts due from the IFA group to any of
  the following (referred to in this rule as the
  Other Parties)

(A) another party to transaction (B) any
holding company of another party to
transaction (C) any subsidiary of any holding
company of another party to transaction
79

• (D) any controlling shareholder of

(1) another party to the transaction or (2) any
holding company of another party to the
transaction,
which controlling shareholder is not, itself, a
holding company of another party to the
transaction
(E) any associate of any controlling shareholder
referred to in paragraph (D) above
80

• (ii) all guarantees given by any of the Other
  Parties on behalf of the IFA group

(d) the aggregate of (i) amounts due to the
IFA group from any of the Other Parties
(ii) all guarantees given by the IFA group on
behalf of any of the Other Parties
81

• 4. any of the following has a current business
  relationship with the issuer or another party to
  the transaction, or

• a director, subsidiary, holding company or
  substantial shareholder of the issuer or another
  party to the transaction
• which would be reasonably considered to affect
  the IFAs independence in performing its duties
  as set out in the rules, or
• might reasonably give rise to a perception that
  the IFAs independence would be so affected
• save except where that relationship arises
  pursuant to the IFAs appointment for the
  purpose of providing the subject advice

82

• (a) any member of IFA group
• (b) an employee of IFA who is directly engaged
  in providing the subject advice to the issuer
• (c) an associate of employee of the IFA who is
  directly engaged in providing the subject advice
  to the issuer
• (d) a director of any member of IFA group or
• (e) an associate of a director of any member of
  IFA group

83

• 5. within 2 years prior to making declaration
  pursuant to 13.85(1)

(a) a member of IFA group has served as
financial adviser to
(i) issuer or its subsidiaries (ii) another party
to transaction or its subsidiaries or (iii) a
connected person of issuer or another party to
transaction or
84

• (b) without limiting para (a), an employee or a
  director of IFA who is directly engaged in
  providing subject advice to issuer

(i) was employed by or was a director of another
firm that served as a financial adviser to any of
the entities referred to at para (a)(i) to
(a)(iii) above (ii) in that capacity, was
directly engaged in provision of financial advice
to the issuer or another party to the transaction
85

• 6. the IFA or a member of IFA group is issuers
  auditor or reporting accountant

86

• 4. Due diligence by IFAs
• 13.80 requires that an IFA take all reasonable
  steps to satisfy itself that

• it has a reasonable basis for making the
  statements required
• there is no reason to believe any of the
  information relied on by the IFA or by any 3rd
  party expert relied on by the IFA is not true or
  omits a material fact

87

• Note 1 to 13.80 sets out Exchanges expectations
  of reasonable steps an IFA will typically perform
  including

• obtaining issuers information / documents
  relevant to assessment of fairness
  reasonableness of terms of transaction
• researching relevant market other conditions
  trends relevant to the transaction pricing
• reviewing fairness, reasonableness completeness
  of any relevant assumptions or projections

88

• re any 3rd party expert

• interviewing expert
• reviewing terms of engagement
• where IFA is aware issuer or another party has
  made formal / informal representations to expert,
  assessing whether representations accord with
  IFAs knowledge

• if any relevant alternative offers made,
  reviewing assessing them reasons for
  rejecting them

89
Agenda

• Process
• Key Objectives
• Key Aspects
• 2 Phases
• Rule Changes

• sponsors CAs
• IFAs
• transitional

• Enforcement
• Questions

90

• Transition

• applications made on or before 19 Oct 2004
• rules will not apply

• applications made on or after 20 Oct 2004 but
  completed by 31 Dec 2004
• rules will not apply

91

• other applications

• rules will apply on 1 Jan 2005
• on 1 Jan 2005 have to comply with steps passed
  (e.g. requirement for independence statement
  undertaking)
• BUT Division has discretion to modify if new
  applicant demonstrates compliance would cause
  significant hardship

92

• IFA rules will apply to all IFA appointments made
  after 1 Jan 2005

93
Agenda

• Process
• Key Objectives
• Key Aspects
• 2 Phases
• Rule Changes

• sponsors CAs
• IFAs
• transitional

• Enforcement
• Questions

94

• Enforcement

• Clear message
• SEHK SFC will continue to co-operate to ensure
  failures to meet the standards are addressed
  promptly effectively

95
Tightening of structure including

• Clear policy and rules as to what is expected

• Monitoring of sponsors aided by requirement
  that

• conduct reasonable DD to put itself in a position
  to be able to make DD declaration
• (from PN) document DD planning and significant
  deviations from plans
• (from PN) document conclusions re basic listing
  conditions compliance

96

• Monitoring of CAs aided e.g. could ask

• did issuer consult CA?
• if CA consulted, when consulted and did it e.g.
  ensure issuer properly guided and advised?

97

• Investigation and enforcement aided by e.g.

• having clear policy
• undertakings

• confirm contractual nexus
• require (sponsors, CAs and IFAs) to cooperate in
  investigations

98
Breaches may still ? e.g.

• private reprimand
• public statement with criticism
• public censure
• GEM removal from sponsors list
• impact upon fitness properness
• revocation / suspension of licence
• SFO penalty

99
Agenda

• Process
• Key Objectives
• Key Aspects
• 2 Phases
• Rule Changes

• sponsors CAs
• IFAs
• transitional

• Enforcement
• Questions

100
When
What
Why
New applicant its directors must assist sponsor
(3A.05)
IPO planning Appoint
sponsor/s 3A.02
Sponsor must perform duties impartially (3A.06)

Sponsor must make independence statement to SEHK
make statement even if not the independent
sponsor assess as at the time of making the
declaration pursuant to 3A.13
MB When first submit documents to SEHK or
before GEM At least 25 clear business days
before provisional hearing of application
3A.03 to 3A.04, 3A.07 App 17

If sponsor / new applicant becomes aware of
change from independence statement
Notify SEHK asap
3A.09

Sponsor must submit to SEHK declaration in terms
of 3A.14 to 3A.16 informed by reasonable due
diligence inquiries undertaken having regard to
PN
Asap after hearing of listing application but on
or before issue of listing document
3A.11(2), 3A.12, 3A.13 App 19
101
When
What
Why

CAs must perform duties impartially (3A.25)
Initial listing
Appoint CA (MB 1 years / GEM 2 years)
3A.19

No later than immediately CA issuer agree terms
of engagement or, if later, CA commencing work
for issuer
CA must give undertaking to SEHK
3A.21

Issuer must consult with and, if necessary, seek
advice from its CA
3A.23
At times set out in 3A.23

When consulted
CA must discharge duties in 3A.24
3A.24
102
When
What
Why

After Fixed Period
SEHK may direct listed issuer to appoint a CA for
a further period
3A.20
103
Questions?