Notification of Interests in REITs

15 Dec 2005

In view of the recent developments in the market concerning substantial acquisitions of units in SFC-authorised real estate investment trusts (REITs) and widespread market interest in information about substantial interests in REIT units, the SFC today announces its policy to require that provisions substantially equivalent to those in Part XV (Disclosure of Interests) of the Securities and Futures Ordinance be adopted in trust deeds of REITs.

As a result, holders of REIT units are required to submit to the relevant REIT manager and The Stock Exchange of Hong Kong Limited (SEHK) notifications of interests upon the attainment of the 5% disclosure threshold and other changes thereto in accordance with the provisions of the relevant trust deed. In order to enhance transparency of and public access to information regarding interests in REIT units and to promote orderly trading in the market, such notifications received by SEHK will be posted on its website, in the same manner as the disclosure of interests in shares of listed companies.

Although the 5% disclosure threshold is not applicable to The Link REIT yet, the SFC is in discussion with the manager and trustee of The Link REIT with a view to achieving alignment of the disclosure requirements in its trust deed with those of other REITs as soon as practicable (Note 1). The public will be informed by The Link REIT when such alignment is achieved. Meanwhile, pending such alignment holders of The Link REIT may if they wish also submit their notifications of interests to SEHK for publication on its website.

Mrs Alexa Lam, SFC’s Executive Director of Intermediaries and Investment Products, said: “The SFC notes the encouraging market response to REITs in Hong Kong, as well as the recent developments concerning significant acquisitions of REIT units. As a responsible regulator, the SFC considers it appropriate and necessary to respond to the developments in the market and continue to monitor market developments and enhance the regulatory regime relating to this new product.”


Notes to Editor:

1. The Link REIT has adopted the threshold of 10%. Both the Prosperity REIT and the GZI REIT have already adopted the 5% threshold and deemed the application of Part XV of the SFO in their trust deeds.

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