The government has backed down on stock market reform again, substantially diluting a proposal to make breaking disclosure rules a criminal offence punishable by imprisonment, after seven years of deliberation.
The maximum 10-year jail term and HK$10 million fine in its first attempt to turn some listing rules into law in 2003 have given way in the latest proposals announced yesterday to a civil penalty with a maximum HK$8 million fine and a ban from being a director.
Even the proposal to give the Securities and Futures Commission the power to directly fine rule breakers has been dropped in favour of the regulator referring cases to a market misconduct tribunal.
Also, where the 2003 plan covered a major part of the listing rules, including connected transactions, financial statements and directors' duties, the latest document out forward for consultation involves only price-sensitive information such as takeover news and a substantial rise or fall in profit.
The reform was first proposed after a series of corporate scandals to try to give more teeth to regulations - the Hong Kong Exchanges and Clearing now can only reprimand those who break listing rules.
Two consultation exercises - in 2003 and 2004 - met stiff opposition from the business sector.
