HONG KONG: SFC Proposes Enhancements to Targeted Tools to Address Corporate Misconduct

Monday March 31 2025

On 28^th March 2025, the Securities and Futures Commission (SFC) published consultation on various proposed enhancements to the Securities and Futures Stock Market Listing Rules (SMLR) for IPO cases and post-IPO matters, with a view to improving regulatory efficiency in Hong Kong’s listing market and providing broader protection for the investing public against imminent financial harm.

The proposed enhancements came after the SFC completed a review into the SMLR, examining whether the existing rules equip the SFC with sufficient targeted tools to ensure and encourage both listed issuers and listing applicants to make more transparent and accurate disclosures, as well as to address misconduct.

The key proposed enhancements to the SMLR fall into four areas:

• for IPO cases, the SFC would be able to require a listing applicant to meet continuing disclosure obligations post-listing without objecting to a listing by adding an express provision to the SMLR to clarify that the listing conditions can continue to have effect after listing.
• for post-IPO matters, the SFC proposes to offer a less disruptive alternative to suspension.
• for trading suspensions, shorter suspension time is likely to result from the SFC’s proposed move to more efficiently process applications for trading resumption through simplified procedures and the delegation of the SFC Board’s decision-making power to senior executives in uncontroversial cases; and
• for issuers aggrieved by the SFC’s decisions, a right for them to seek a full merits review by the Securities and Futures Appeals Tribunal would provide an effective independent safeguard that the regulatory decisions made by the SFC are reasonable, proportionate and fair.

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