HONG KONG, Oct. 6 /Xinhua-PRNewswire/ -- On 25 September 2008, a briefing and roundtable meeting was held at the InterContinental Hotel Beijing Financial Street by The Hong Kong Institute of Chartered Secretaries (HKICS). More than 50 delegates shared their views on the findings of a comparative study of continuing disclosure in Hong Kong and the Mainland. The event was attended by professionals representing the China Securities Regulatory Commission (CSRC), the Ministry of Commerce, Hong Kong Exchanges and Clearing Company Limited (HKEx) and Shanghai Stock Exchange (SSE), professional service providers and A&H dual listed companies.
The HKICS is an independent, self-disciplinary professional body registered in Hong Kong. It is the China Division of the Institute of Chartered Secretaries and Administrators. The membership of HKICS is recognised by HKEx as one of the professional qualifications for a company secretary of a listed company.
As a professional body focused on promoting good corporate governance, HKICS provides professional accreditation and membership administration for Chartered Secretaries in Hong Kong and the Mainland. In addition, since Hong Kong welcomed the first batch of H-share issuers in 1993, it has been devoted to promoting good governance standards among mainland Chinese companies through local and overseas training and discussion activities for board secretaries. It also organises seminars on enhanced continuing professional development for the affiliated persons and conducts International Qualifying Scheme (IQS) examinations in the Mainland. In a further effort to promote good governance practices and help developing professionals with international perspectives and practical skills in the Mainland, HKICS has released Hong Kong research reports and guidelines for good governance practices at topical seminars and through a variety of other channels.
In recent years, amid growing integration and cooperation between Hong Kong and the mainland under the CEPA framework, the SAR has played an indispensable role helping mainland companies expand into the international market by leveraging its position as an international financial centre and the conduit for Chinese corporations seeking access to international capital.
With the increasing popularity of A+H dual listings and the return of H share and red chip companies to the A-share market, the number and capitalisation of A&H dual listed companies has grown to a significant level. Statistics show that among the 454 Chinese enterprises listed in Hong Kong, there are 93 red chip corporations, 152 H-share issuers and 55 A&H dual listed companies.
After China’s admittance to the WTO, major State-owned enterprises have been actively bringing in foreign equity investors, hoping to build their international competitiveness in strategic sectors.
At a time when PRC regulatory authorities are exploring the option of opening up the domestic capital market by allowing A-share listings for foreign companies, regulatory and disclosure requirements for cross-border listings have become a practical issue confronting potential A&H share issuers and are also a challenge for the PRC domestic capital market seeking internationalization .
One of the greatest concerns that dual listed companies facing is to ensure simultaneous and consistent compliance with the continuing disclosure regimes in the two jurisdictions which differ in structures, enforcement patterns and regulatory intensity. For the regulators, the most pressing challenge is to facilitate the continued healthy development of capital markets by reconciling the relevant regulations and practice guidelines between the two jurisdictions and to address investors’ growing concerns about possible unequal treatment of shareholders and regulatory arbitrage resulting from regime differences.
The latest comparative study is the result of two years of research by HKICS and industry experts concerned about the issue of A&H dual listings. The project examines the different sets of listing rules in Hong Kong and the Mainland by looking at the legal and practical aspects of continuing disclosure, based on available information and case studies.
The report employs an empirical study of enforcement against breaches of disclosure rules on the Hong Kong, Shanghai and Shenzhen Stock Exchanges through an analytical comparison of H share and A share issuers’ compliance records for continuing disclosure and enforcement for the full period from 2005 to 2007. The prospects for convergence in disclosure regulations across the border are also evaluated.
By closely examining the regulatory requirements for continuing disclosure in Hong Kong and the Mainland, the report identifies material differences in regulations and procedures, especially concerning the disclosure of price sensitive information, periodic financial reporting, disclosure of notifiable transactions and disclosure of connected transactions. With the issue of regulatory convergence gradually emerging, especially in financial reporting standards, a variety of conclusions can be drawn with implications for the enforcement of compliance by listed companies,
the prospects for convergence between the Hong Kong / PRC capital markets, and the strategic considerations for maintaining Hong Kong’s competitive edge as an international financial centre.
The release of this study report is likely to arouse heightened awareness of differences in regulatory requirements for listed companies in Hong Kong and the Mainland. The value of the report is recognised by the delegates and industry professionals. The delegates call for closer cooperation and coordination between the two jurisdictions’ regulators to promote the development of a better synchronised, more stable and prosperous capital market by resolving the major regulatory differences between them. It is suggested that the HKICS should continue to play its professional body’s role by working with all parties concerned to study problems and cases at the operational level and develop the relevant guidelines to facilitate the resolution of regulatory differences between Hong Kong and the Mainland.
About The Hong Kong Institute of Chartered Secretaries
More than meets the eye.
The Hong Kong Institute of Chartered Secretaries is an independent professional body with more than 5,000 members and approximately 2,500 students. It is dedicated to the promotion of its members’ role in the formulation and effective implementation of good corporate governance policies in Hong Kong and throughout China as well as the development of the profession of Chartered Secretary.
The Institute was first established in 1949 as an association of Hong Kong members of the Institute of Chartered Secretaries and Administrators (ICSA) of London. It became a branch of ICSA in 1990 before gaining local status in 1994.
For enquiries, please contact:
Ms Elaine Cheung
Tel: +852-2881-6177
Fax: +852-2881-5050
Email: elaine@hkics.org.hk
Website: http://www.hkics.org.hk
