Property disclosure rules to be relaxed

PUBLISHED : Friday, 21 October, 2011, 12:00am
UPDATED : Friday, 21 October, 2011, 12:00am


Listed companies and listing hopefuls will no longer need to give unnecessary property valuation disclosures in their prospectuses and circulars from the beginning of next year, under a proposed rule change.

The Securities and Futures Commission and Hong Kong Exchanges and Clearing jointly announced the changes which allows listed companies, if their core businesses are not property developments, to give less onerous property valuation disclosures in their circulars.

The same relaxation will also apply to listing candidates in their prospectuses.

The exchange and the SFC said the move was in line with international practice. At present, companies need to provide valuations for all property interests. Some see this as too burdensome, and irrelevant to investors.

The HKEx and the SFC last December held a 10-week consultation which showed support for the streamlined requirements.

However, they called for technical changes to the proposal regarding the mining activities valuation of the companies.

The regulators accepted their views and adjusted the proposals accordingly.

If there is no opposition from the Legislative Council, the change will become effective from January 1.

Mark Dickens, HKEx's head of listing, said the revised listing rules would 'remove unnecessary burdens on applicants and issuers while ensuring meaningful information is given to investors'.

Brian Ho Yin-tung, executive director of corporate finance at the SFC, said the revised requirements would result in more focused and relevant information being disclosed in prospectuses and circulars, making the process more cost-effective for applicants and issuers.