Pre-Deal Research Guidelines for the Hong Kong IPO

Transcript:Pre-Deal Research Guidelines for the Hong Kong IPO:
Pre-Deal Research Guidelines for the Hong Kong IPO Process October 2017 Prepared with the kind assistance of Herbert Smith Freehills and Norton Rose Fulbright Asia Securities Industry & Financial Markets Association These guidelines and the addenda are intended to: Mitigate the risk of liability associated with pre-deal research for the issuer, its directors and senior management, sponsors, underwriters and research analysts. Ensure that relevant parties are fully aware of the regulatory regime and their obligations. Provide recommended steps to manage interactions between research analysts and the issuer and its directors and senior management. Recommended steps include: providing training to the issuer; starting analysts presentations with a reminder on the restrictions on requesting and providing impermissible information; counsel attendance at analyst presentations; and chaperoning of other company/analyst interactions where reasonable and practicable. Provide recommended templates for use at various stages of the Hong Kong IPO process. Set out appropriate safeguards to ensure that no material information about the issuer or its securities is provided to any investment research analyst, unless the information is reasonably expected to be included in the prospectus or is publicly available. Introduction These guidelines and recommended addenda were developed to address the requirements of the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission ("Code of Conduct"). Paragraph 16 of the Code of Conduct imposes restrictions on the disclosure or provision to any investment research analyst of any material information, including forward-looking information (whether quantitative or qualitative) which is not reasonably expected to be contained in a prospectus and is not publicly available ("impermissible information"). In addition, Paragraph 16 requires research analyst firms to have written policies and control procedures to ensure that analysts are not provided by the firm with any impermissible information. Paragraph 17.2(h) of the Code of Conduct requires a sponsor to take reasonable steps to ensure analysts do not receive material information not disclosed in the listing document. The full version of the Code of Conduct can be found at: http://www.sfc.hk/web/EN/assets/components/codes/files-current/web//code-of-conduct-for-persons-licensed-by-or-registered-with-the-securities-and-futures-commission/code-of-conduct-for-persons-licensed-by-or-registered-with-the-securities-and-futures-commission.pdf The guidelines and addenda represent the collective agreed views of the ASIFMA WG and the expectation is that they will be broadly adopted and replace in the ordinary course existing “house” styles of the various documents. The recommended steps in the guidelines and addenda may not be appropriate in all circumstances. Discuss with counsel the circumstances where it may be appropriate to deviate from the recommended