The Securities & Futures Commission today launched a two-month consultation to solicit public comments on extending the Codes on Takeovers & Mergers & Share Repurchases to real estate investment trusts, or REITs.

Views are also sought on applying the market misconduct and disclosure of interests provisions in the Securities & Futures Ordinance to listed collective investment schemes.

The Commission believes, given the development of REIT markets in Hong Kong and other parts of Asia, and rising interests in mergers and acquisitions of REITs, it is an appropriate time to review the regulatory regime governing takeovers and mergers of REITs with a view to providing better protection for minority unit holders.

"We believe the proposals represent a step forward in defining a regulatory infrastructure that better protects the interests of investors and assists the further development of Hong Kong's REIT market," the commission's Chief Executive Officer Martin Wheatley said.

The first part of the proposals call for amendments to the REIT Code, including aligning the control structure of REITs with that of listed companies, and to the codes including introducing a set of REIT guidance notes to the codes.

The second part seeks to clarify and enhance the regulation of market conduct regarding dealings in listed collective investment schemes by applying Parts XIII to XV of the ordinance to them. While Parts XIII and XIV deal with market misconduct, Part XV stipulates disclosure of interests requirements for listed companies.

Click here for the proposals. Comments should reach the commission by March 8.