CONFIDENTIAL
164
055031
CONFIDENTIAL
FM HONG KONG
HKD 028
RECEIVE
14 JUL 1991
DESK OFFICER
TO DESKBY 10100OZ FCO
TELNO 2198
INDEX
OF 100908Z JULY 91
·163
PA
HONG
TOP CO
DIST
MDHIAN 4857
MY SECOND IPT: LORD CAITHNESS' VISIT TO HONG KONG, 22-25 JULY: UPDATE OF DEVELOPMENTS ON JARDINE
PROPOSED CREATION OF A NEW CATEGORY OF TRADING LISTING'
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1. ON 4 JULY, THE LISTING COMMITTEE OF THE STOCK EXCHANGE OF HONG KONG (SEHK) ENDORSED THE CONCEPT OF CREATING A NEW CATEGORY OF
TRADING LISTING' THAT WOULD ACCOMMODATE JARDINES' REQUEST FOR A 'TRADING ONLY LISTING. A DOCUMENT WILL BE FINALISED SOON FOR CONSULTATION WITH MARKET BODIES. SEHK HAS SENT A COPY OF THE DRAFT CONSULTATION DOCUMENT TO JARDINES FOR THEIR REFERENCE. THE CHAIRMAN OF SECURITIES AND FUTURES COMMISSION (SFC) WILL MONITOR CLOSELY THE PROGRESS OF SEHK'S CONSULTATION.
TAKE-OVERS EXEMPTION PROPOSAL
2. THE SFC HAS ALSO COMPILED A DRAFT CONSULTATION DOCUMENT WHICH CONSIDERS THE CONCEPT THAT THE NON-STATUTORY CODES, ESPECIALLY THE TAKE-OVERS CODE, SHOULD NOT APPLY TO COMPANIES WITH A 'TRADING' LISTING. THE DRAFT DOCUMENT IS BEING CIRCULATED FOR CONSIDERATION BY THE TAKE-OVER COMMITTEE, THE SFC ADVISORY COMMITTEE, SEHK AND JARDINES. THE SFC PLANS TO ISSUE THE CONSULTATION DOCUMENT BY THE END OF JULY.
3. THUS FAR, THE FEED BACK THAT THE SFC HAS OBTAINED FROM MAJOR MARKET PRACTITIONERS AND PROMINENT COMMERCIAL FIGURES IS THAT ANY AMENDMENT OF THE LISTING OR TAKE-OVERS REGIME IS LIKELY TO CREATE THE IMPRESSION THAT IF A LARGE AND POWERFUL GROUP THREATENS TO DELIST, IT CAN OBTAIN CONCESSIONS FROM THE REGULATORS AND CREATE PRESSURE FOR OTHER TYPES OF CONCESSION FROM OTHER POWERFUL SORTS OF INTEREST GROUP'. THIS PERCEPTION WILL HAVE TO BE ADDRESSED IN THE CONTEXT OF HONG KONG'S POSITION AS AN INTERNATIONAL CENTRE AND ITS UNIQUE CIRCUMSTANCES.
DISCUSSION WITH REGULATORY AUTHORITIES IN UK
4. THE SFC HAS HELD DISCUSSIONS WITH OFFICIALS OF THE LONDON STOCK EXCHANGE, PANEL ON TAKE-OVERS AND MERGERS, SECURITIES AND INVESTMENT BOARD, DEPARTMENT OF TRADE AND INDUSTRY, AND WITH JARDINES AND JARDINES' LONDON ADVISORS. THE UK REGULATORY
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CONFIDENTIAL