Member Article

The Securities and Futures Commission (SFC) is inviting market participants and interested parties to submit written comments on the Consultation Paper on the Review of the Disclosure of Interests Regime under the SFO. The Consultation Paper seeks comments on the following matters: • Forms and Codes Additional codes to describe the events leading to the notification or capacity in which the interest is held have been proposed and further suggestions for useful codes and revisions to the forms are invited. • Principal Issues for further consultation Views are sought on the following: Disclosure of security interests given by substantial shareholders: Whether the exemption for disclosure of security interests over holdings of substantial shareholders should be removed or narrowed. Disclosure thresholds and the de minimis exception: Whether the de minimis exception should be simplified or the trigger for disclosure should be changed from crossing a percentage level to an actual percentage change. Aggregation exemption: Whether the aggregation exemption should be extended to cover certain practices of qualified investment managers, and circumstances where an entity carries on more than one business activity which are segregated by Chinese walls. Stock borrowing and lending: Whether the “Authorised Lending Agent” (ALA) regime should be expanded. Credit derivatives: Whether credit derivatives with convertible bonds or exchangeable bonds as reference assets should be exempted from disclosure or whether a specific code for credit derivatives should be provided in the disclosure form. Index-linked equity instruments: Whether the “basket” exemption should be expanded to cover instruments linked to indices other than the Hang Seng Index. Change in nature of interest: Whether an exhaustive list defining “change in nature” should be adopted. The “Outline of Part XV of the Securities and Futures Ordinance” published on the SFC’s website, as a practical guide on the situations in which a notice has to be filed, will be revised to assist understanding of the new provisions.