bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

The Hong Kong Society of Accountants (HKSA) is expected to sign a memorandum of understanding (MOU) with the stock exchange soon to clarify the division of regulatory responsibilities.

 The agreement follows tension between the two over the society's reports into three cases of suspected accounting malpractice involving listed companies.

 'Both sides have little disagreement on [the definitions of] listing matters, so the MOU is expected to be reached in the near future,' HKSA president Kam Pok-man said yesterday.

 It is understood the MOU, which will assign responsibility for regulation of accounting matters to the society and listing matters to the exchange, has been under negotiation for years.

 Concerns have been raised over whether the exchange's regulatory power will be extended to accountants in the soon to be launched Growth Enterprise Market (GEM).

 Accountants, who are self-regulated by the HKSA, will be able to act as listing sponsors for the GEM.

 This raises questions over the division of regulatory responsibilities, since listing sponsors are regulated by the exchange.

 'The MOU may come before the launch, so it may help to clarify [the regulation],' Mr Kam said.

 The exchange said it had received a letter on the issue from the HKSA, but declined to comment further.

 'The definition of listing matters is quite clear to us - those matters under the listing rules' regime - and the exchange is supposed to have a final say on the interpretation of the rules,' exchange senior executive director Lawrence Fok Kwong-man said yesterday.

 An accounting community source said most leading accounting firms had shown little interest in undertaking sponsorship for the first batch of companies to be listed on the GEM this year.

 'They worry it will affect the independence of the profession if accountants play the role of auditing as well as sponsoring a company at the same time,' the source said.



Deal on regulatory roles expected soon between exchange and accountants