I refer to Jake van der Kamp's 'Monitor' column (South China Morning Post Business, March 22) and want to clarify the Stock Exchange's role as a front-line regulator of listed companies.
Our relationship with listed companies is a contractual one. Every listing company is required to sign a listing agreement with us, basically undertaking to comply with the Listing Rules.
Where breaches of the Listing Rules are alleged or suspected, we will follow up by asking the listed company concerned for clarification.
The company is required to respond to inquiries made of it by the Stock Exchange and to provide such relevant information as is available to it in relation to such inquiries. When breaches of other legislation are alleged or suspected, we will normally refer such cases to the Securities and Futures Commission, or other enforcement agency for investigation and prosecution, as we have no powers of investigation, which are normally granted only to statutory regulators and law enforcement agencies.
It would not be appropriate for us to comment on individual cases in progress. However, in the case of New World Development, I can confirm that we asked the company about the allegations of selective disclosure of price sensitive information to stock analysts. The company made a public statement denying the allegations. In the absence of contrary evidence, we have to accept in good faith the company's statement as issued.
KAREN LEE