News
News //
Submitted by // J Wong, Partner
10 February 2020


Virtual assets - the SFC's regulatory strategy for a dynamic industry

In November 2018, the SFC published a proposed framework for virtual asset trading platforms. A few months ago, the SFC followed this with the publication of a position paper on the regulation of virtual asset trading platforms. On the same day, the CEO of the SFC, Ashley Alder, gave a speech at FinTech week and the SFC also issued a warning on virtual asset futures contracts.

We have distilled the messages from the SFC as follows:

1. The SFC says it has no power to regulate businesses who deal in pure virtual assets, that is, assets that do not fall within the definitions of "securities" or "futures contracts" under the SFO.

2. However, the SFC will consider licensing a centralised online trading platform offering at least one security token and which has control over investors' assets.

3. The SFC will not accept licensing applications from platforms:

a. which only provide a direct peer-to-peer marketplace for transactions;
b. where investors typically retain control over their own assets; or
c. which trade virtual assets for clients, including order routing, but do not provide ATS themselves.

4. Licensees must comply with the Terms and Conditions for Virtual Asset Trading Platform, which is at Appendix 1 of the Position Paper.

5. These include, for example:

a. requirements relating to safe custody of assets, KYC/AML and market manipulation;
b. specific criteria relating to hot/cold wallets, hard forks, airdrops, etc.;
c. provision of services only to professional investors; and
d. requirements with respect to insurance.

6. The SFC is unlikely to grant a licence to carry on a business in virtual asset futures contracts. The SFC even goes so far as to note that "virtual asset futures contracts may also be construed as contracts for differences under the Gambling Ordinance… persons who breach the relevant provisions of the SFO or the Gambling Ordinance may be prosecuted and, if convicted, subject to criminal sanctions." This is a strong warning.

7. Licensed platforms will be placed into the SFC's Regulatory Sandbox.

Ashley Alder said in his speech that the SFC recognises that it must be open to the benefits of innovation, but its "bottom line" is that it needs to "stay vigilant about the risks of new technology."

This is clear from the recent statements from the SFC, which are robust, stringent and very comprehensive. It is likely that they only want committed and professional entities to apply and have set the bar for a licence (at least for trading platforms) quite high. Having said that, this could mean that platform operators looking to operate in Hong Kong could have a competitive advantage in being an SFC-licensed entity.

The regulatory regime continues to evolve, as the SFC continues to refine its approach, we expect more changes. As Ashley Alder said in his speech "…watch this space – there will be much more to come."


About Us

Howse Williams is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach. 

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; banking; fraud; financial services/corporate regulatory and compliance.

As an independent law firm, we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

 

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News //
Submitted by // Corporate Team
05 February 2020


Corporate News Alert - the Joint Statement in relation to Results Announcements in light of Travel Restrictions related to the Severe Respiratory Disease associated with a Novel Infectious Agent published by SFC and the Exchange

On 4 February 2020, The Securities and Futures Commission (SFC) and The Stock Exchange of Hong Kong Limited (the Exchange) issued the Joint Statement in relation to Results Announcements in light of Travel Restrictions related to the Severe Respiratory Disease associated with a Novel Infectious Agent (the "Joint Statement") suggesting all listed issuers getting in touch with the regulators and providing explanations if they are unable to complete or issue their financial results on or before the 31 March 2020 deadline amidst the coronavirus outbreak or the related travel and other restrictions.

Key points to note:

  • There is no blanket extension in financial reporting deadline. The Exchange and SFC will only approve any delay on a case-by-case basis.
  • If a listed issuer consider that there is a real possibility for it to miss the deadline, they must inform the Exchange immediately and notify its shareholders with adequate provision of information in relation to the travel or other restrictions, the reason(s) for delay, the financial information that it is still able to report, as well as the impact of the restrictions on the accuracy, completeness and presentation of the financial information available.
  • Where no agreement from the issuer's auditors is obtained but the issuer is otherwise in all respects able to publish its preliminary results in full compliance with the other Listing Rules reporting requirements, it should publish such preliminary results (without the agreement with its auditors) with caution statements on or before the deadline. In such cases, the Exchange will normally allow trading in the issuer's securities to continue.
  • In all other cases, the Exchange, in consultation with SFC, will assess whether the publication of the financial information that the issuer is able to report on will be sufficient to maintain an orderly, informed and fair market, taking into account of the issuer's audit committees on the unaudited financial information available to the issuers. The issuer should be reasonably satisfied that the information is accurate and complete in all material aspects.
  • The issuer's management should assess whether any inside information has arisen and, if so, make a separate announcement as soon as reasonably practicable, independent of any applicable Listing Rule requirement even if the coronavirus outbreak and/or the related travel restrictions may have materially disturbed the issuer's business operations, reporting controls, systems, processes or procedures.

Please refer to the Joint Statement for full and further details.


About Us

Howse Williams is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; banking; fraud; financial services/corporate regulatory and compliance.

As an independent law firm, we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice.  Please contact pr@howsewilliams.com if you have any questions about the article.

 
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Press //
Submitted by // B Ho, Partner; D Che, Partner
21 January 2020

 

Howse Williams ("HW"), a leading Hong Kong independent law firm, advised First Shanghai Capital, the sole sponsor, First Shanghai Securities, Guotai Junan Securities, Shanxi Securities International, Essence International and Astrum Capital, the joint bookrunners, as the Hong Kong legal counsel, on the listing of the shares of Wah Wo Holdings Group Limited ("Wah Wo") on the Main Board of the Hong Kong Stock Exchange.

Wah Wo is an established contractor engaged in facade works with a focus on windows in Hong Kong. It provides design and build services for new buildings and renovation services for built premises. The shares of Wah Wo commenced trading on The Stock Exchange of Hong Kong Limited on 17 January 2020, under the stock code 9938.

The Howse Williams team was led by partners, Brian Ho and Denise Che. The team had lead responsibility on the drafting of the prospectus and other legal documentation, providing advice to the underwriters on corporate and regulatory issues, communicating with the regulators and undertaking general transaction management.


About Us

Howse Williams is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; banking; fraud; financial services/corporate regulatory and compliance.

As an independent law firm, we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice.  Please contact pr@howsewilliams.com if you have any questions about the article.

 
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Press //
Submitted by // H Lee, Partner and B Ho, Partner
17 January 2020

 

Howse Williams ("HW"), a leading Hong Kong independent law firm, acted as the legal adviser to the sole sponsor and the underwriters in relation to the approximately HK$400 million share offer and listing of Activation Group Holdings Limited (Stock Code: 9919) ("Activation" or the "Company") on the Main Board of the Stock Exchange. Dongxing Securities (Hong Kong) Company Limited acted as the sole sponsor while CMB International Capital Limited acted as the sole financial adviser. Dongxing Securities (Hong Kong) Company Limited, CMB International Capital Limited and Haitong International Securities Company Limited acted as the joint global coordinators, joint bookrunners and joint lead managers. The IPO was well received by the retail investors in Hong Kong and the Hong Kong Public Offering was oversubscribed by over approximately 113.75 times.


Activation is a leading and fast growing integrated marketing solutions provider that focuses on the provision of (i) experiential marketing; (ii) digital and brand communication; and (iii) public relations services. Based in Shanghai and Beijing with operations covering the Greater China, the Company ranked first in the experiential marketing services for premium and luxury brands market in Greater China. It also taps into the market for sports and entertainment IP development with exclusive rights to organise authorised events with LaLiga Club brand and Le Tour de France brand for marketing, sponsorship, merchandising and other uses in the PRC, as well as a joint venture with Stufish Production for the production of entertainment shows.

HW is delighted to be part of the significant milestone for Activation. The HW team was led by partners, Heidi Lee and Brian Ho who were supported by associates Yen Yum and Ellin Yan. The team had lead responsibility on the drafting of prospectus and other legal documentation, providing advice on corporate and regulatory issues, communicating with the regulators and undertaking general transaction management.


About Us

Howse Williams is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; banking; fraud; financial services/corporate regulatory and compliance.

As an independent law firm, we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice.  Please contact pr@howsewilliams.com if you have any questions about the article.

 
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