Lawmakers have approved controversial legislation requiring Hong Kong-listed companies and their senior executives to disclose price-sensitive information in a timely manner or face a fine of up to HK$8 million.
The change comes after almost 10 years of debate about tougher penalties for failing to disclose information that is likely to affect share prices, such as takeover and merger news, a substantial change in financial results or sudden loss of assets.
The new regulation is aimed at enhancing market transparency and matching international jurisdictions such as Britain and the European Union, which have also added civil liabilities for those breaching disclosure rules.
It comes as the securities watchdog is beefing up investor protection with the threat of jail terms and hefty fines for listing sponsors who fail to carry out proper due diligence on dodgy companies.
The Legislative Council yesterday approved the new provisions in the Securities and Futures Ordinance, which allow the Securities and Futures Commission to refer non-disclosure cases to a Market Misconduct Tribunal for a hearing.
The tribunal will rule on whether any listed companies and their senior officials failed to disclose price-sensitive information in a 'reasonably practicable' time to the public.