Information Required, Forms, Timing & Penalties – Disclosure of Interests under the Securities and Futures Ordinance (April 2003)
No. 1 • April 2003
Disclosure of Interests under the Securities and Futures Ordinance | Part 4
Information Required, Forms, Timing & Penalties
Information Required to be Given
The SFO has removed the previous requirement for substantial shareholders to disclose particulars of registered shareholders. Instead, it uses more structured notification forms.
Key details that substantial shareholders must disclose include:
- Corporate Substantial Shareholders: Name and address of any person in accordance with whose directions the company or its directors are accustomed or obliged to act (except where the company is listed in Hong Kong or on a specified stock exchange, or is a wholly-owned subsidiary of such a listed company).
- Subsequent Disclosures of Long Positions:
- For on-exchange transactions: highest price and average price per share paid or received.
- For off-exchange transactions: highest and average consideration per share, plus the nature of the consideration.
- If no price or consideration was paid/received, this must be stated.
Note: Transactions in equity derivatives do not require price or consideration details.
- Equity Derivatives: Whether they are listed or unlisted, cash-settled or physically settled, and details of the underlying shares.
Timing of Notice
Notices must be filed with the Stock Exchange and the relevant listed company at the same time, or one immediately after the other. The previous requirement to notify the Stock Exchange first has been removed.
Forms to be Used
There are six separate forms for notifications under the SFO:
- Form 1 – Individual Substantial Shareholder Notice
- Form 2 – Corporate Substantial Shareholder Notice
- Form 3A – Director’s / Chief Executive’s Notice of Interests in Shares of a Listed Company
- Form 3B – Director’s / Chief Executive’s Notice of Interests in Shares of Associated Corporation
- Form 3C – Director’s / Chief Executive’s Notice of Interests in Debentures of Listed Company
- Form 3D – Director’s / Chief Executive’s Notice of Interests in Debentures of Associated Company
The forms (with accompanying notes) are available in both English and Chinese and can be downloaded from the Hong Kong Exchanges and Clearing Limited (HKEX) website or the SFC website.
They can be printed and completed manually, or downloaded in Microsoft Excel format for offline completion.
Directors who are also Substantial Shareholders must use Form 3A (instead of Form 1) to disclose interests in shares of the listed company of which they are directors.
Penalties for Failure to Disclose
Failure to make disclosure within the required time limits, or making a statement that is false or misleading in any material particular, is a criminal offence.
Maximum penalties per offence:
- Fine of up to $100,000
- Imprisonment for up to 2 years
Members and officers of a company may also be personally liable. The Financial Secretary may additionally impose restrictions on the transfer of shares of any person convicted of an offence.