Zhitong Finance App learned that M. Duignan (M. Duignan), executive director of the Regulatory Enforcement Department of the Hong Kong Securities Regulatory Commission, delivered a keynote speech entitled “New Enforcement Thinking: Pioneering New Approaches to Pursuing Outstanding Results” at the 10th Asian Corporate and Securities Law Annual Conference, suggesting that any legal, feasible, and efficient enforcement measures to achieve desired results should be pursued. The Hong Kong Securities Regulatory Commission will no longer rely only on traditional litigation channels, and will use diversified tools to maintain market order and effectively seek substantial compensation for small and medium shareholders harmed by misconduct.
Dai Lin said that traditional law enforcement processes such as investigation, hearing, and adjudication are still indispensable, but they are not the only solution. The supervisory level can mitigate risks before the situation evolves into a lengthy judicial process through advance warning, voluntary agency handover, case settlement, and immediate suspension of trading.
The speech listed a number of examples of practical supervision tools:
1. Advance warning to guide the market: The “Circular to Licensed Corporations Related to the Work of Sponsors” was issued in January of this year to clearly specify unacceptable behavior to the market and implement pre-risk alerts before the risk has erupted;
2. For intermediaries with repeated offenses: Promote intermediaries that have committed continuous misconduct for a long period of time to voluntarily return their licenses;
3. Use a settlement mechanism to lock in compensation funds: Take the China Evergrande financial fraud case and PricewaterhouseCoopers reached a settlement with PricewaterhouseCoopers, as an example, and the Giordano International share acquisition settlement plan, and use settlement arrangements to quickly lock in compensation funds to protect minority shareholders' rights;
4. Quick intervention after risk occurs: Suspend stock trading on the listed company in question and take regulatory action before the damage spreads further.
Dai Lin stressed that the core direction of this new set of enforcement ideas is to balance the efficiency of supervision with the protection of minority shareholders' rights and interests, and to flexibly select various legal and practical means to achieve regulatory goals.