Hong Kong SFC Launches 2-Month Consultation on Arrangement & Compulsory Acquisition for REITs Enabling Privatization & Corporate Restructuring Similar to Listed Companies, Enhanced Market Conduct for Listed Collective Investment Schemes to Increase Market Integrity & Investor Protection
29th March 2024 | Hong Kong
The Hong Kong Securities and Futures Commission (SFC) has launched a 2-month consultation on arrangement & compulsory acquisition for REITs (Real Estate Investment Trusts) enabling privatization & corporate restructuring similar to listed companies, and enhancing market conduct for listed collective investment schemes to increase market integrity & investor protection. Hong Kong SFC (28/3/24): “The Securities and Futures Commission (SFC) today launched a two-month consultation on a statutory scheme of arrangement and compulsory acquisition mechanism for real estate investment trusts (REITs) and an enhanced market conduct regime for listed collective investment schemes (CIS) under the Securities and Futures Ordinance (SFO). The proposals would enable Hong Kong REITs to conduct privatisation and corporate restructuring in a way similar to other listed companies through a statutory scheme of arrangement and compulsory acquisition mechanism (Note 1) to be introduced in the SFO. REIT unitholders would also be provided with various safeguards and protection under the statutory regimes. In addition, under the proposals, various SFO market conduct regimes would be explicitly extended to listed CIS to enhance market integrity and investor protection (Note 2).” The public is invited to submit their comments to the SFC on or before 27th May 2024 – Consultation.
“ Hong Kong SFC Launches 2-Month Consultation on Arrangement & Compulsory Acquisition for REITs Enabling Privatization & Corporate Restructuring Similar to Listed Companies, Enhanced Market Conduct for Listed Collective Investment Schemes to Increase Market Integrity & Investor Protection “
Christina Choi, the SFC’s Executive Director of Investment Products: “It has been the SFC’s long established policy to regulate REITs in the same manner as listed companies. These enhancements could help build a more vibrant Hong Kong REIT market by facilitating mergers and acquisitions of REITs on the one hand and strengthening investor protection on the other.”
Notes:
- The proposed statutory scheme of arrangement and compulsory acquisition mechanism to be introduced for REITs will be fundamentally based on Part 13 of the Companies Ordinance, with appropriate modifications to cater for the nature and features of REITs and to provide for the roles and responsibilities of their key operators.
- The SFO market conduct regimes are namely (a) the market misconduct regime under Parts XIII and XIV; (b) the disclosure of inside information regime under Part XIVA; and (c) the disclosure of interests regime under Part XV. They are proposed to be explicitly extended to cover listed CIS including REITs. The proposals are in line with prior public consultations which received general support, with certain refinements.
Hong Kong SFC Launches 2-Month Consultation on Arrangement & Compulsory Acquisition for REITs Enabling Privatization & Corporate Restructuring Similar to Listed Companies, Enhanced Market Conduct for Listed Collective Investment Schemes to Increase Market Integrity & Investor Protection
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