Member Article

In September 2006, the Securities and Futures Commission (SFC) released the Consultation Conclusions on the draft guidelines on marketing materials for listed structured products (Guidelines). The Guidelines, to be published under section 399 of the SFO, will replace the current guidelines, which take the form of a letter to warrant issuers. The Stock Exchange of Hong Kong will continue to require compliance with the revised Guidelines as a condition to the listing of structured products. The Guidelines have been amended to clarify the scope of their application. For example, a paragraph has been added confirming that the Guidelines apply to issuers of structured products as well as all entities responsible for issuing marketing materials promoting listed structured products. In addition, a question-and-answer section was enclosed with the Consultation Conclusions. The Q&A section helps to clarify that the Guidelines are not intended to capture listing documents and prospectuses, or marketing materials which are designed purely for professional investors. Under the previous version of the Guidelines, an issuer is required to disclose to the SFC any commercial or business relationship it has with a person who appears on any audio or audiovisual programme, seminar or lecture, or writes to promote particular listed structured products, where their relationship with the person is such that his objectivity or independence may be called into question. In light of the practical difficulties in implementation and enforcement, this requirement has been removed from the revised Guidelines.