SFC Tightens IPO Scrutiny With Search-Warrant Guidance To Brokers

Hong Kong's Securities and Futures Commission has stepped up scrutiny of the new share market, according to Reuters, after reportedly briefing about 10 brokerage and investment banking executives in an August closed-door meeting on how to handle search warrants. The guidance reportedly called for firms to let investigators enter offices immediately, grant access to employees' email and computer systems on the day of a search, and launch internal probes if a search leaks to the public or the media. The SFC told Reuters it had not issued any written search guidance, but said it regularly shares regulatory expectations and codes of conduct with market participants to strengthen internal controls and compliance. Sources said IPOs and other share sales have become a key focus, and that banks and advisers were told to consider market demand, choose quality issuers and strictly enforce internal controls. Sources also said Hong Kong regulators have carried out about eight surprise inspections of brokers or funds this year, more than in previous years. The report said the firms involved included the Hong Kong units of Citic Securities, Guotai Junan, CICC and China Securities.