Disclosure of Inside Information
This FAQ is prepared by the Corporate Finance Division and aims to provide guidance to listed corporations on the application of the provisions of Part XIVA of the Securities and Futures Ordinance (SFO) and the SFC Guidelines on Disclosure of Inside Information (SFC Guidelines).
The information set out below is not meant to be exhaustive. This FAQ may be updated and revised from time to time. This FAQ is only for general reference. The SFC reserves the right to exercise all powers conferred upon it under the law. Unless otherwise defined herein, all capitalised terms have the meanings given to such terms in the SFC Guidelines.
Should a listed corporation issue an announcement headed “voluntary” to disclose information?
A listed corporation should not use the heading of “voluntary announcement” to disclose information. Depending on the specific facts and circumstances, if a listed corporation issues an announcement that contains inside information under the heading of “voluntary announcement”, it risks non-compliance with the requirement to disclose inside information that is accurate, complete and not misleading. Moreover, to label any other announcement as “voluntary” is not helpful for investors to understand the relevance and significance of the information disclosed. In deciding the heading of an announcement, a listed corporation should use a heading that accurately reflects the substance of the information concerned.
Are there any content requirements for an inside information announcement?
Announcements of inside information should be clear, informative and comprehensible in order to enable investors to make well-informed decisions. Therefore an announcement should:
- be factual, clear and expressed in a balanced and objective manner;
- convey key messages that are clearly visible to and readily understandable by investors;
- contain sufficient background information so that an announcement can be read without undue reference to other documents;
- avoid boilerplate statements that tend to lengthen the document without providing meaningful information; and
- contain sufficient quantitative information which has come to the knowledge of the listed corporation, the omission of which may cause the information disclosed to be false or misleading under section 307B(3) of the SFO.
Should a listed corporation disclose inside information in an “overseas regulatory announcement”?
Under Listing Rule 13.10B2, a dually listed corporation must announce in Hong Kong all information released to any other stock exchange on which the securities are listed at the same time as the information is released to that other exchange. Listing Rule 2.07C provides that any publication on the HKEx3 website by an issuer must be made in both the English and Chinese language unless otherwise stated. In practice, the Stock Exchange has allowed any “overseas regulatory announcement” to be published in one language only (either Chinese or English) (FAQ Series 9 – No. 55 and No.56). This is because overseas regulatory announcements typically reported matters that were not required by the Listing Rules and it had been assumed that they did not contain inside information.
However, the regulators have noticed that there have been overseas regulatory announcements which contained material information (e.g. periodic results). It is possible that such material information may constitute inside information. The Stock Exchange follows up on such overseas regulatory announcements and requires them to be re-issued in English and Chinese under Listing Rule 13.09.
With the advent of the statutory regime under Part XIVA of the SFO the above practice has been revisited. As a result, the SFC takes the view that if a listed corporation discloses inside information in an overseas regulatory announcement in one language only (i.e. Chinese or English), the listed corporation has not fully complied with the requirement under section 307C(1) to disclose information in a manner that can provide for equal, timely and effective access by the public to the information.