After StanChart and UBS, Hong Kong regulator warns of more IPO sponsor probes

Tue Nov 8, 2016 11:16pm EST
 
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By Michelle Price

HONG KONG (Reuters) - Investors can expect to see more regulatory probes into the sponsorship of stock listings in Hong Kong, the city's top markets enforcement official said, underlining a crackdown that has already led to two global banks being investigated.

Speaking at the Thomson Reuters Pan-Asian Regulatory Summit on Wednesday, Thomas Atkinson, recently appointed to head up enforcement at Hong Kong's Securities and Futures Commission (SFC), said the regulator had created a temporary team dedicated to monitoring misconduct for initial public offerings.

"Corporate fraud and malfeasance pose one of the greatest threats to the integrity of the Hong Kong market," Atkinson said. "We have received a steady stream of referrals from our corporate finance division."

"Of particular note are those involved in misconduct of IPO sponsors: to put it very lightly, the conduct and level of professionalism demonstrated by some sponsors has left a lot to be desired," the enforcement chief said, without disclosing any sponsor names.

"You can expect to see some more of these cases and hopefully we'll hold these firms and senior management accountable."

Atkinson's tough stance comes in the wake of Standard Chartered (STAN.L: Quote) saying last week that the SFC is investigating its role as a joint sponsor of an IPO in 2009, and could take action against its Hong Kong unit.

That disclosure came just days after UBS (UBSG.S: Quote) also said the SFC was investigating its role as sponsor of certain listings in the city. USB could potentially face financial penalties, and could even be temporarily stripped of its ability to provide coveted corporate finance advisory services in Hong Kong.

The banks did not identify the IPOs at the center of the probes.   Continued...

 
A Standard Chartered bank branch in Singapore October 11, 2016. REUTERS/Edgar Su