Consultation Paper on the Proposed Guidelines for Market Soundings
Release Date: 2023-12-07
18 Westlands Road
54th Floor, Island East Centre
Hong Kong, Quarry Bay
Securities and Futures Commission
December 7, 2023
Consultation Paper on the Proposed Guidelines for Market Soundings
The proposed "Market Sounding Guidelines" (referred to as "the Guidelines" henceforth) serve as an important resource designed to clarify the necessary precautions when engaging with inside information during market sounding procedures. The issues that have arisen from the appeal tribunal are expected to be addressed through the introduction of these Guidelines.
Question 1: Do you agree with the scope of application of the Proposed Guidelines? If not, please explain
Response: We are agree.
Question 2: I Do you consider the definition of “market soundings” to be clear and appropriate? If not, please explain.
Response: We are agree.
Question 3: Do you have any comments on the examples of factors to consider when determining the level of certainty of the corresponding potential transaction materialising in connection with a market sounding?
Response: We assert that once relevant disclosure information (i.e., inside information) is received, it must be managed according to the higher standards established in the Guidelines or the compliance manuals of licensed entities until the information is publicly disclosed.
Question 4: Do you agree that a Market Sounding Intermediary has a duty to maintain the strictures of confidentiality of non-public information passed or received during market soundings? If not, please explain.
Response: We are agree.
Question 5: Do you agree that, from the standpoint of the Code of Conduct, a Market Sounding Intermediary should not trade on or use any non-public information passed or received during market soundings for its own or others’ benefit or financial advantage? If not, please explain.
Response: We are agree.
Question 6: Do you have any comments on the Core Principles in the Proposed Guidelines as outlined above?
Question 7: Are there any other areas which you think the Core Principles in the Proposed Guidelines should cover? If so, please provide examples.
Response: We have no further comments.
Question 8: Do you agree with the proposal for Disclosing Persons to adopt the use of a standardised script? If not, please explain.
Response: We are agree.
Question 9: Do you have any comments on the minimum content and sequence of information set out in the standardised script?
Response: We have no comments.
Question 10: Do you agree that Disclosing Persons should not provide specific information that may allow the Recipient Person or potential investor to identify the subject security before receiving relevant consent from the Recipient Person or potential investor? If not, please explain.
Response: We are agree.
Question 11: Do you agree that Disclosing Persons have an obligation to determine if non-public information disclosed by them during market soundings has been cleansed? If not, please explain.
Response: We are agree.
Question 12: Do you agree with the proposed periods of record keeping and details of the records to be kept by Disclosing Persons? If not, please explain.
Response: We are agree.
Question 13: Do you agree that a Recipient Person should designate a properly trained person(s) to receive market soundings? If not, please explain.
Response: We are agree.
Question 14: Do you agree with the proposed periods of record keeping and details of the records to be kept by Recipient Persons? If not, please explain.
Response: We are agree.
Question 15: Do you think a six-month transition period is appropriate? If not, what would be an appropriate transition period? Please set out your reasons.
Response: We find it suitable.
For any inquiries or additional information, please do not hesitate to contact me (Phone: / Email: ).
Warm regards,
Mofiz Chan
Chairman
Hong Kong Securities and Futures Professionals Association
54th Floor, Island East Centre
Hong Kong, Quarry Bay
Securities and Futures Commission
December 7, 2023
Consultation Paper on the Proposed Guidelines for Market Soundings
The proposed "Market Sounding Guidelines" (referred to as "the Guidelines" henceforth) serve as an important resource designed to clarify the necessary precautions when engaging with inside information during market sounding procedures. The issues that have arisen from the appeal tribunal are expected to be addressed through the introduction of these Guidelines.
Question 1: Do you agree with the scope of application of the Proposed Guidelines? If not, please explain
Response: We are agree.
Question 2: I Do you consider the definition of “market soundings” to be clear and appropriate? If not, please explain.
Response: We are agree.
Question 3: Do you have any comments on the examples of factors to consider when determining the level of certainty of the corresponding potential transaction materialising in connection with a market sounding?
Response: We assert that once relevant disclosure information (i.e., inside information) is received, it must be managed according to the higher standards established in the Guidelines or the compliance manuals of licensed entities until the information is publicly disclosed.
Question 4: Do you agree that a Market Sounding Intermediary has a duty to maintain the strictures of confidentiality of non-public information passed or received during market soundings? If not, please explain.
Response: We are agree.
Question 5: Do you agree that, from the standpoint of the Code of Conduct, a Market Sounding Intermediary should not trade on or use any non-public information passed or received during market soundings for its own or others’ benefit or financial advantage? If not, please explain.
Response: We are agree.
Question 6: Do you have any comments on the Core Principles in the Proposed Guidelines as outlined above?
Question 7: Are there any other areas which you think the Core Principles in the Proposed Guidelines should cover? If so, please provide examples.
Response: We have no further comments.
Question 8: Do you agree with the proposal for Disclosing Persons to adopt the use of a standardised script? If not, please explain.
Response: We are agree.
Question 9: Do you have any comments on the minimum content and sequence of information set out in the standardised script?
Response: We have no comments.
Question 10: Do you agree that Disclosing Persons should not provide specific information that may allow the Recipient Person or potential investor to identify the subject security before receiving relevant consent from the Recipient Person or potential investor? If not, please explain.
Response: We are agree.
Question 11: Do you agree that Disclosing Persons have an obligation to determine if non-public information disclosed by them during market soundings has been cleansed? If not, please explain.
Response: We are agree.
Question 12: Do you agree with the proposed periods of record keeping and details of the records to be kept by Disclosing Persons? If not, please explain.
Response: We are agree.
Question 13: Do you agree that a Recipient Person should designate a properly trained person(s) to receive market soundings? If not, please explain.
Response: We are agree.
Question 14: Do you agree with the proposed periods of record keeping and details of the records to be kept by Recipient Persons? If not, please explain.
Response: We are agree.
Question 15: Do you think a six-month transition period is appropriate? If not, what would be an appropriate transition period? Please set out your reasons.
Response: We find it suitable.
For any inquiries or additional information, please do not hesitate to contact me (Phone: / Email: ).
Warm regards,
Mofiz Chan
Chairman
Hong Kong Securities and Futures Professionals Association