HKEX held a seminar today to help market practitioners better understand and apply the recent published Listing Document Simplification Guide.
Listing documents, including prospectuses, issued by new applicants should be presented clearly and in plain language to give potential investors sufficient information. However, many listing documents are often overly long and complex, and they have become harder to understand with the use of legalistic and technical jargon. That has also made important information harder to find.
HKEX published a new Listing Document Simplification Guide on 2 February to address this issue.
Four general drafting principles were set out in the new guide:
Does each piece of information in the listing document need to be disclosed?
Simplify the language
Avoid using defined terms or technical jargon
Simplify the layout
HKEX Senior Vice President of the Listing Department at IPO Transactions Lin Shi and Peter Cheng of Listing and Regulatory Affairs shared some examples to demonstrate what kind of information is relevant and material. They urged professional advisors to leave out immaterial information in the documents that obscures information that is important to the investors.
The Listing Document Simplification Guide also sets out eight practical suggestions for the drafting process.
Use a lead writer / editor
Avoid copying disclosures
Tabulate financial information
Make cross references
Summarise material agreements
Summarise relevant Listing Rules, legislation or other regulations
Avoid marketing language
Step back and review
Many questions were raised during the seminar which were addressed by the speakers as well as Grace Kan, Managing Director, Head of IPO Transactions and Eugene Yeoh, Senior Vice President of IPO Transactions of the Listing Department.
Around 200 lawyers, accountants and sponsors joined today’s seminar.
Check out more photos below:
