SFC Recommends Tighter Rules at Hong Kong Stock Exchange
Hong Kong’s securities watchdog has reviewed the local stock exchange’s performance and issued a series of recommendations to tighten rules.
The Securities and Futures Commission (SFC) has published a report that includes recommendations to the Hong Kong stock exchange (HKSE) for improvement in several areas, according to a statement.
The SFC suggested that the HKSE address internal control deficiencies and put in place effective measures to comply with listing rules when an issuer fails to publish financial statements due to corporate or accounting irregularities. It recommends vetting of issuers’ internal control reviews and to consider requiring the issuer’s independent consultant to issue an opinion on the matter.
On late auditor resignations, the regulator advises an update to reduce the frequency of such incidents, including a requirement to obtain shareholder approval and prevention of fee-related disagreements. The exchange also recommended further scrutiny of how the issuers’ audit committees discharge their duties.
