In the Budget Speech 2003, Hong Kong's financial secretary stressed the importance of attracting more financial product issuers. To further these initiatives and to foster the development of retail bonds, the SFC and the Financial Services and Treasury Bureau jointly published a consultation paper on March 10 2003, suggesting amendments to the Companies Ordinance.
The purpose of the paper is to encourage development of the bond market and enhance Hong Kong's position as an international financial centre. It involves three phases, including the introduction of the following measures:
- removing the requirement for compliance with the prospectus requirements for offers to professional investors or to 50 persons or less;
- expanding the SFC's power in granting exemption to irrelevant or unduly burdensome procedures; and
- allowing issuers to issue "awareness advertisement", setting out basic factual and procedural information concerning the offers.
Apart from simplifying the procedures for the registration and issue of prospectuses, the proposal also suggests measures to protect shareholders who have suffered losses by reason of any untrue statement in the prospectus.
The consultation period will end on March 31 2003 and a Bill would be introduced thereafter to amend the Companies Ordinance.
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