This webinar examined the insider dealing regime under Parts XIII and XIV of the Securities and Futures Ordinance, including the seven statutory circumstances that constitute the offence, the key definitions, available defences, enforcement routes, landmark cases, the SFC’s 2023 proposals to expand territorial scope, and the Market Sounding Guidelines that took effect in May 2025.
Key points:
- Civil and criminal insider dealing offences under sections 270 and 291, covering dealing, counselling/procuring, disclosure/tipping and tippee liability (including takeover-related limbs and dual-listed/overseas-market dealings)
- Definitions of “securities”, “listed securities” (including grey-market and later-listed securities), “connected person”, related corporations and “inside information”
- The “real prospect” threshold for material price impact, confirmed by the MMT in the China Forestry case, and the distinction between specific information and mere rumours or speculation
- Defences under sections 271 and 292, including the innocent-purpose defence (and the Court of Final Appeal’s approach in Yiu Hoi Ying Charles), Chinese walls, off-market dealing, market information and rights-to-subscribe defences
- MMT powers and sanctions (disqualification, cold-shoulder, cease-and-desist and disgorgement orders — no fine under Part XIII), criminal penalties (up to 10 years’ imprisonment and HK$10 million), double jeopardy and private rights of action
- Section 213 restoration and freezing orders as the SFC’s preferred investor-compensation tool, illustrated by Tiger Asia and Du Jun
- Officers’ duty under section 279 and liability for a company’s disclosure breaches under Part XIVA
- Key cases analysed: Young Bik Fung (section 300 for overseas-listed shares), Cheng Chak Ngok (MMT inquisitorial nature and standard of proof), and the Dickson Poon/Dickson Concepts MMT report (insider dealing via a BVI vehicle and breach of the inside-information disclosure obligation)
- Proposed expansion of the regime (2023 Consultation Conclusions) to cover Hong Kong dealings in overseas-listed securities (where also unlawful offshore) and overseas dealings in Hong Kong-listed securities, plus alignment of the mens rea for disclosure limbs
- Practical implications of the SFC’s Market Sounding Guidelines for licensed or registered persons disclosing or receiving confidential information about possible transactions in listed securities
The full recording can be found on our Publications & Presentations page.