SFC Proposes Changes to the Statutory Regimes that Regulate REITs and Listed CIS

The Securities and Futures Commission (the “SFC”) is running a two-month consultation on proposals to introduce a statutory scheme of arrangement and compulsory acquisition mechanism for real estate investment trusts (“REITs”) (the “REIT Proposal”) and extend the market conduct regimes contained in the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong, the “SFO”) to listed collective investment schemes (“Listed CIS”) (the “Listed CIS Proposal”, and together with the REIT Proposal, the “Proposals”). 

The REIT Proposal aims to provide greater flexibility to REITs to facilitate privatisation and restructurings, while the Listed CIS Proposal represents the second attempt by the SFC to extend various regulations in the SFO (the civil and criminal market misconduct regimes, the Part XV disclosure of interests regime and the Part XIVA inside information disclosure regime, collectively the “Market Conduct Regimes”) to cover only Listed CIS, unlike the first attempt which sought to cover all potential forms of non-corporate listed entities. The Proposals follow extensive soft consultation with market participants and stakeholders, as well as industry bodies.

The consultation is open for comments until 27 May 2024.

Read our client bulletin to know more about the key changes under the Proposals.