SFC seeks public’s opinion on IPO regulation

The recent crackdown on brokers pushing sub-standard IPOs heads in a parallel direction.

The Securities & Futures Commission has launched a two-month consultation on enhancing the regulatory regime of sponsors. Among other recommendations, the commission suggests sponsors have civil and criminal liability for untrue statements, including material omissions in a prospectus.

It also proposes that sponsors be reasonably satisfied that information in an IPO prospectus is true, accurate and complete. Sponsors should test information provided in the accountants’, valuers’ and other experts’ reports to ensure the prospectus is credible.

Before submitting a listing application, sponsors are required to complete the vast majority of due diligence. They should also resolve key issues concerning the company's operation, governance and structure, and issues affecting the suitability for listing.

People may submit their comments by e-mail to the SFC on or before July 6.