Consultation on the Proposed Changes to the Disciplinary Regime of the Stock Exchange

The Stock Exchange of Hong Kong Limited (the “Exchange”) on 7 August published a consultation paper in relation to changes on its disciplinary regime (the “Consultation Paper”). The Consultation Paper covers a comprehensive review of the Exchange’s disciplinary powers and sanctions under the Listing Rules. Among the proposed changes, professional advisers of listed issuers or any of their subsidiaries may be subject to secondary liability for breaches of the Listing Rules in circumstances where the Exchange determines the person “...has caused by action or omission or knowingly participated in a contravention of the Listing Rules” and be subject to disciplinary action by the Exchange.

We feel strongly that the above proposed changes on secondary liability are unnecessary, and in certain circumstances, may place a solicitor in dif cult and conflicting situations where s/he may be required to observe his/her professional duties as required by the Legal Practitioners Ordinance and other applicable laws or rules as regulated/ administered by the Law Society. It is, therefore, entirely inappropriate for practising solicitors to be included in the scope of the proposals. These views, together with other responses to the consultation paper, are set out in a submission prepared by the Company Law Committee. The Submission was endorsed by Council and has been sent to the Exchange. You could nd this submission at our website: http://www. hklawsoc.org.hk/pub_e/news/submissions/20200930.pdf.

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