HKEx allows dual roles on GEM plays | South China Morning Post
  • Fri
  • Mar 6, 2015
  • Updated: 1:15am

HKEx allows dual roles on GEM plays

PUBLISHED : Wednesday, 12 December, 2001, 12:00am
UPDATED : Wednesday, 12 December, 2001, 12:00am

Hong Kong Exchanges and Clearing is to ease the rules restricting accounting firms from acting as both co-sponsor and auditor for a listed company.


Some industry players expect the relaxation to encourage more accounting firms to become involved in a stock's initial public issue business.


In a clarification of its practice yesterday, the exchange pointed out that a potential conflict of interest could arise if a firm's corporate finance and audit operations worked for the same listing applicant at the same time.


The exchange will conditionally permit a firm to do so, however, if it acts as a co-listing sponsor and not a sole sponsor.


A firm must not take part in any securities underwriting, marketing or promotion in relation to the client for whom it acts as co-sponsor. The firm must prove adequate segregation of its roles as corporate financier and audit operator.


The change will affect Growth Enterprise Market (GEM) players rather than those listed on the main board, as Hong Kong accountants are only allowed to sponsor GEM listings.


The exchange said it would also amend the second board's listing rules to reflect the change.


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