Hong Kong Stock Exchange issues guidance to firms regarding coronavirus

Maria Nikolova

If a listed issuer believes that, as a result of the restrictions, it will be unable to publish a preliminary announcement of results, it should contact the Exchange to discuss the situation.

The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission (SFC) has earlier today issued a statement  to provide guidance to listed companies and their auditors in relation to the disclosure of financial information in view of travel and other restrictions that have arisen in response to the outbreak of a novel coronavirus.

Travel and other restrictions related the recent virus outbreak may disrupt the reporting or audit processes of certain issuers. If a listed issuer believes there is a real possibility that, as a result of these restrictions, it will be unable to publish a preliminary announcement of results (or, as the case may be, issue audited financial statements) in accordance with the relevant requirement under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the Listing Rules), it should contact the Exchange as early as possible to discuss the situation.

An affected issuer is anticipated to provide the Exchange with, to the extent possible:

  • (1) a description of the travel and other restrictions which have affected its auditing or reporting process,
  • (2) where available, an account of why these restrictions have meant that it is unable to comply with the relevant reporting requirements set out in the Listing Rules,
  • (3) the financial information that it is nevertheless still able to report on, and
  • (4) explain whether the accuracy, completeness and presentation of the financial information available is believed to have been adversely affected and, if so, to what extent.

Where an issuer is unable to obtain agreement from its auditors but is otherwise in all respects able to publish its preliminary results in full compliance with the other reporting requirements set out in the Listing Rules, it should publish such preliminary results on or before the deadline. In such cases, the Exchange will normally allow trading in the securities of the issuer to continue.

In all other cases, the issuer should consult with the Exchange as soon as possible on the financial information that it is able to report on. The Exchange, in consultation with the SFC, will assess whether publication of this information will be sufficient to maintain an orderly, informed and fair market so that trading in the securities of the listed issuer can continue.

The Exchange reminds listed issuers to engage with their auditors to discuss their audit plans and timetables, and to closely monitor any new developments.

Meanwhile, many branches of Hong Kong banks remain closed. Those still operating are sanitized and their employees are required to wear face masks in order to minimize the chances of the virus spreading.

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