190 likes | 272 Views
HKCMA Spring Cocktail 2004. Andrew Malcolm. The EU Prospectus and Transparency Directives - what they mean for Asian issuers and Hong Kong’s Securities Law Reform - the three-phase process. EU Financial Action Plan. 42 new Directives
E N D
HKCMA Spring Cocktail 2004 Andrew Malcolm
The EU Prospectus and Transparency Directives - what they mean for Asian issuers • and • Hong Kong’s Securities Law Reform - the three-phase process
EU Financial Action Plan • 42 new Directives • A pan-European securities market to rival the United States?
EU PD and TD • Two major directives for our purposes • Prospectus Directive: new offers • Transparency Directive: continuing obligations
EU PD and TD • The Directives will apply to • securities offered to the public • securities listed in EU (whether or not offered to the public)
EU PD and TD • The Directives are complex and still incomplete. But the headline requirement is for • financial information under IFRS (IAS) • “true and fair view” audit under international auditing standards
EU PD and TD • Surprisingly: no (useful) grandfathering
EU PD and TD • Even more surprisingly: very limited exemptions for euromarket issues • for straight debt (and many exchangeables), exemption if in minimum denominations of €50,000 or equivalent • no exemptions for equity, convertible bonds or (effectively) GDRs
EU PD and TD • Only “home-state lock-in” currently in force - for an issuer’s first EU listing after 31 December 2003 • Main provisions effective from sometime in 2005
EU PD and TD • What to do? • For straight debt: use € 50k denominations? • A delist-and-relist right • List on Hong Kong or Singapore
STOP PRESS • At end February, EU Parliamentary Committee on Economic and Monetary Affairs recommended: • US, Canadian, Australian GAAP “equivalent” to IAS • No quarterly reporting • Grandfathering for straight debt listed before 1 January 2006 EU Parliament/Council of Ministers reaction awaited
Reform of Hong Kong Securities Law • Regime Change
Guidelines Phase One Class Exemptions We are here! “Quick Fix” Legislation Phase Two Phase Three Radical Overhaul Overview
Guidelines and Class Exemptions • Dual prospectuses • Offer awareness publicity • Prospectus contents for bonds
Quick Fix Legislation • Embed the Guidelines and Exemptions • New offering safe harbours • Professional investors (like SFO) • Denominations of HK$500k • Private placements up to 50 offerees
Quick Fix Legislation • Committee stage amendments • deletion of resale restrictions • transparency in waivers/exemptions • others • Expected timing for implementation
Radical Overhaul • New Ordinance • “Debenture” • Transaction-based rather than document- based regime • Promotional advertising • Incorporation by reference, shelfs, passports