Hong Kong IPO market braces for tighter regulations

The SFC’s recommendation to clarify criminal liability for sponsors will likely keep bankers on their toes, while the reforms are intended to maintain investor confidence in the city’s IPO market.
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Ashley Alder pushes through his first major regulatory changes since becoming CEO of the SFC in October 2011 (AFP)</div>
<div style="text-align: left;"> Ashley Alder pushes through his first major regulatory changes since becoming CEO of the SFC in October 2011 (AFP)</div>

Hong Kong’s securities regulator last week finally revealed its plans to improve the regulation of sponsors of initial public offerings.

The Securities and Futures Commission SFC launched a two-month industry consultation back in May amid growing concerns about the quality of some companies that have sought to list in Hong Kong, in a move that was aimed at maintaining investor confidence in the city’s IPO market.

The consultation did not come as a surprise, but still caused controversy. One of the most hotly debated issues was the one dealing with civil and criminal liability for information contained in the prospectus.

Despite opposition from sponsors...

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