IN a move to increase the protection of investors in companies which deal in overseas properties, official guidelines on valuations were unveiled yesterday by the stock exchange and the Securities and Futures Commission (SFC).
For the first time, they have set out the information to be provided with valuation reports of property located in China and other developing property markets.
The guidelines will apply to valuations of property for new listing applicants or those subject to notifiable transactions such as the acquisition of property in China by a listed company from a connected person.
The guidelines, which become effective tomorrow, have been issued by the stock exchange as a note to the listing rules and by the SFC under the Companies Ordinance which require firms to cover valuations of property in emerging markets in prospectuses.
The Companies Ordinance requires that prospectuses contain a valuation report for all of a company's interests in land or buildings that exceed 10 per cent of its assets or more than $3 million.
Under the guidelines, a valuation report for any property should state whether the issuer has vested legal title to the property, and the prospectus or circular should contain a statement of this fact.