SFC identifies continued deficiencies in sponsor work
SFC identifies continued deficiencies in sponsor work
On 26 March 2018, the Securities and Futures Commission (SFC) issued a Circular to licensed corporations on expected standards for sponsor work (the Circular) following the release of their Report on the thematic review of licensed corporations engaged in sponsor business (the Report).
The deficiencies in sponsor work highlighted by the SFC include:
- failure to follow up on apparent red flags during due diligence;
- box-ticking standard due diligence checklists resulting in failure to address issuer-specific matters outside the scope of standard checklists; and
- failure to confirm that persons interviewed had the authority and knowledge to confirm or provide requested information.
The Report notes that these deficiencies were especially common for sponsor work done for GEM IPOs. Read more…