In a warning to sponsors and listing applicants, Hong Kong’s Securities and Futures Commission (SFC) has criticised inadequate standards of diligence and disclosure on initial public offerings (IPOs). But some argue the regulator must go further.
On July 26, the regulator published its half-yearly Dual Filing Update. It revealed that of 68 listing applications received in the six months up to March 2010, the SFC raised comments on 60 (86%) and “deferred commenting on two others due to serious deficiencies”.
But despite arguing that this “calls into question the standard of due diligence performed in the preparation of listing documents”, the SFC did not name offenders or detail any disciplinary action.
“If this were a soccer match,” said one in-house counsel, “the...