Governance Briefing — October 5, 2022
Hong Kong's Securities and Futures Commission implemented a strengthened regulatory regime for IPO sponsors, heightening governance expectations for due diligence, staffing, and board accountability on listings.
Executive briefing: On 5 October 2022 the Securities and Futures Commission (SFC) announced the implementation of enhanced regulations for IPO sponsors, including amendments to the Code of Conduct for Persons Licensed by or Registered with the SFC and Listing Rules changes by HKEX. The regime, effective 5 October 2022, raises expectations for due diligence governance and sponsor accountability.
Key governance signals
- Due diligence oversight. Sponsors must designate responsible officers to supervise IPO due diligence, maintain comprehensive records, and evidence board-level review of material findings.
- Staffing and competence. The rules impose minimum staffing levels, experience requirements, and project management controls to ensure sponsor teams can scrutinise listing applicants.
- Engagement governance. Sponsors must adopt internal controls over acceptance of mandates, management of conflicts, and communication with listing committees, increasing transparency for issuers and regulators.
Action checklist
- Review sponsor engagement policies, board reporting lines, and escalation procedures to align with the revised Code of Conduct paragraph 17.
- Implement documentation systems tracking due diligence steps, interview notes, and verification evidence for regulatory inspection.
- Coordinate with listing applicants to integrate sponsor findings into board materials, risk registers, and IPO readiness plans.
Sources
- SFC announcement on the new regulatory regime for IPO sponsors
- HKEX news release on sponsor regulation enhancements
Zeph Tech assists Hong Kong sponsors and listing applicants with due diligence governance frameworks, documentation controls, and board reporting aligned to the enhanced sponsor regime.