SFC names Alexa Lam as interim CEO
Updated: 2011-06-09 06:55
By Oswald Chen(HK Edition)
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Martin Wheatley, former CEO of the Securities and Futures Commission (SFC), speaks during a news conference in Hong Kong on Wednesday. The SFC plans to review how banks sponsor initial share sales after the regulator discovered deficiencies in some IPOs. Jerome Favre / Bloomberg |
Martin Wheatley: Regulator will launch consultation in Q3 on IPO sponsors
The city's financial market regulator, the Securities and Futures Commission (SFC), said on Wednesday that the current SFC Deputy Chief Executive Officer and Executive Director Alexa Lam will act as the SFC Chief Executive Officer as of today after Martin Wheatley's last day on the job on Wednesday.
The SFC announcement said that Lam will act as SFC CEO until Chief Executive Donald Tsang appoints the next head of the regulator.
Wheatley joined the SFC in 2005 and became the chief executive officer the following year. Wheatley announced in December 2010 that he planned to leave the post on June 8, three months before his contract expired. Wheatley will return to the UK and lead the country's financial watchdog - the Financial Services Authority.
"The government is making good progress in selecting the new CEO for the SFC to succeed Martin Wheatley. An announcement will be made as soon as the procedural parts of the selection panel's work have been completed," said Terry Wong, a senior information officer at Financial Services and the Treasury.
Meanwhile, at Wednesday's farewell press briefing, Wheatley said that the regulator would launch a consultation in the third quarter on whether initial public offering (IPO) sponsors should be held legally liable if they provide false and misleading information in their IPO listing prospectus documents.
Wheatley said that the new SFC chief would have to concentrate on three main areas regarding the regulation of the IPO sponsors.
"The SFC should enforce its existing disciplinary sanctions against those IPO sponsors which provide material errors or omissions in IPO prospectus documents, and the regulator should revise the code of conduct for IPO sponsors," Wheatley said.
"The third area of work is that the SFC should consider whether IPO sponsors should bear legal liability if they provide false or misleading information. Singapore and Australia have adopted the legal liability concept in the IPO sponsoring process and it seems that their system works," Wheatley said.
"I think my successor will conduct market consultation work in the third quarter to solicit market views regarding the legal liability of the IPO sponsors," Wheatley added.
Amid a spate of fund-raising activities in the local IPO market that successfully raised $57.7 billion in 2010, the city's regulator in late January strongly criticized the performance of some IPO sponsors. It cited some investment banks or brokerage firms that are not doing enough due diligence work on companies they help to get listed.
One example was the Hontex International case. The mainland-based fabric maker was ordered by the SFC in March 2010 to halt share trading just three months after its IPO in December 2009 as the company was caught providing misleading information in its IPO prospectus. And the HK$1 billion proceeds from the Hontex IPO were frozen by order of the High Court in April 2010, the first-ever such application made by the SFC.
Hontex admitted in March 2010 that the company's IPO listing prospectus documents contained seriously inaccurate information and pledged that it will repay those IPO investors.
Reuters and Bloomberg contributed to this story.
China Daily
(HK Edition 06/09/2011 page2)