The Financial Services & the Treasury Bureau plans to table a legislative bill giving statutory backing to major listing requirements, which will bolster the regulation of listed companies and better protect investors.

In his latest FSTB & You article, published on the bureau's website today, Secretary for Financial Services & the Treasury Frederick Ma said the proposal has been revised, taking in views from the public and the market.

Formulated on the basis of "statutory principles, statutory factors for consideration, and non-statutory codes/guidelines", the proposal meets the objectives of enhancing market quality and deterring misconduct.

"It can remove concern arising from the inclusion of a large number of technical provisions and details in the legislation. A breach of the statutory principles of the listing requirements will be an offence, which may be subject to civil sanctions by the Securities & Futures Commission or the Market Misconduct Tribunal, or criminal prosecution depending on the nature of individual case and seriousness of the misconduct," he said.

Fines proposed

The commission has proposed that it be empowered to impose a civil fine of up to $10 million, to give it the enforcement power to take swift action against breaches of statutory listing requirements.

Responding to market concern about checks and balances on the commission's disciplinary powers, it has proposed forming a full-time panel to make enforcement decisions in relation to breaches of statutory listing requirements. The panel will be functionally separate from the commission's operational divisions, and will report directly to its Chief Executive Officer.

The Government, the commission and the Stock Exchange will work together to develop an operational mechanism to avoid dual regulation and ensure the Stock Exchange's existing practice of interpreting listing requirements will continue under the new regime.

Important step

Mr Ma said: "Giving statutory backing to major listing requirements is an important step in upgrading Hong Kong's listing regulatory regime and putting it on a par with international standards. The commission has conducted preliminary consultations on the latest proposal with the market stakeholders and has received positive feedback.

"We hope that the bill can be introduced to the Legislative Council for scrutiny as soon as possible with a view to implementing the legislative proposal that is conducive to strengthening the competitiveness of Hong Kong as a financial centre."