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March 2014

HONG KONG REGULATORYNewsletter

IPO SPONSORS BEWARE – SFAT AFFIRMS REGULATOR’S STANCE ON PROFESSIONAL STANDARDS

On January 27, 2014, the Securities and Futures Appeals Tribunal (SFAT), which reviews disciplinary decisions made by the SFC, upheld the SFC’s decision to publicly reprimand an IPO sponsor, and suspend the sponsor’s license for one year1 for serious due diligence failures in a listing application on the Growth Enterprise Market (GEM).2 The tribunal reduced the fine imposed by the SFC from HK$15.5 million to HK$12 million.

1 See SFAT No. 3/2013 per Hartmann NPJ, Chairman sitting with two lay members. By Notice of Proposed Disciplinary Action, the SFC initially proposed a public reprimand, HK$18.5 million fine and revocation of the sponsor’s license. The SFC later reduced the fine to HK$15.5 million and substituted the revocation to suspension for one year (after considering representations submitted on behalf of the sponsor).2 The Growth Enterprise Market is the designated market operated by the Stock Exchange of Hong Kong (HKEx) for companies, typically fledgling enterprises with good business models and growth potential, that do not fulfill the profitability/track record requirements to obtain a listing on the Main Board of HKEx.

IN THIS ISSUE:

FEATURE ARTICLES

EDITORIAL: HONG KONG REGULATORY OUTLOOK FOR 2014 .1

IPO SPONSORS BEWARE – SFAT AFFIRMS REGULATOR’S STANCE ON PROFESSIONAL STANDARDS ...........1

RED ALERT ON INSIDER TRADING – EXPANDING THE NET TO CATCH INSIDERS ............................................1

COLUMNS

REGULATORY STANDARDS UPDATES .......................................................2

INTERMEDIARIES/MARKET SUPERVISION .....................................3

KEY PRODUCT DEVELOPMENTS .....4

SIGNIFICANT ENFORCEMENT ACTIONS ............................................6

VISIT WWW.SIDLEY.COMFOR MORE INFORMATION ON SIDLEY’S

REGULATORY PRACTICE

Sidley Austin Hong Kong is pleased to distribute its second quarterly issue of the “Hong Kong Regulatory” newsletter. This publication provides updates on the latest developments in regulation of the Hong Kong financial markets, analysis of current enforcement trends and new laws/regulations, as well as practical tips for market participants.

RED ALERT ON INSIDER TRADING – EXPANDING THE NET TO CATCH INSIDERS

New figures reveal the level of fines, arrests, and regulatory investigations of corporate insiders around the world has jumped significantly in 2013. With financial markets on red alert over a global regulatory clampdown to tackle market abuse, particularly involving insider dealing, it is perhaps a convenient time to reflect on how regulators are expanding the net to capture individuals who are not traditional “corporate insiders.”

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TALENT. TEAMWORK. RESULTS.

For further information about this Newsletter and our practice, please contact:

Alan Linning, Partner and Head of Regulatory Practice in Asia +852.2509.7650 [email protected] Dominic James, Associate [email protected]

Sidley Austin refers to Sidley Austin LLP and affiliated partnerships as explained at www.sidley.com/disclaimer. Attorney Advertising - For purposes of compli-ance with New York State Bar rules, our headquarters are Sidley Austin LLP, 787 Seventh Avenue, New York, NY 10019, 212.839.5300; One South Dearborn, Chicago, IL 60603, 312.853.7000; and 1501 K Street, N.W., Washington, D.C. 20005, 202.736.8000.

FEATURE ARTICLES

EDITORIAL: HONG KONG REGULATORY OUTLOOK FOR 2014

Regulators have upped-the-ante on financial markets and are using a full range of enforcement powers and increased surveillance measures to combat misconduct. At the start of the year, the Securities and Futures Commission (SFC) announced it has now established a special taskforce to crack down on corporate misconduct and monitor circulars, public filings, financial results, etc. This comes a year after introduction of the new statutory disclosure regime in HK for listed companies to publish announcements about price sensitive information, which saw a dramatic increase in the number of corporate announcements. It means that erratic price movements in securities of listed companies – that are unaccompanied by announcements to confirm/deny rumors or publicly disseminate price sensitive information to the market as a whole – can expect to come under close regulatory scrutiny.

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New Electronic Trading Rules

Jan-14: With effect from January 1, 2014, the Code of Conduct was revised to incorporate the new regulatory standards and requirements for electronic trading. Under the new regime, licensed corporations/persons are obligated to manage and supervise the design and operation of electronic trading systems/DMA platforms and also ensure their existing internet trading systems operates within a proper IT security management framework.

Consultation to adopt corporate rescue plans for systemically important FIs launched

Jan-14: The SFC/HKMA/FSTB/IA jointly published a three-month consultation paper with proposals to launch new measures to rescue systemically important financial institutions (FIs) in the event of future corporate failures. The proposed regime gives regulators administrative powers to avert a financial crisis through a host of statutory measures, including compulsory business transfers to bridge FIs, creditor-financed recapitalisations (i.e. bail-ins) or temporary public ownership, which are designed to reduce reliance on use of public funds (i.e. bail-outs).

Inaugural SFC Forum pledges to create more resilient financial markets

Jan-14: The SFC hosted its first Regulatory Forum themed “New Perspectives on the future of regulation in the aftermath of the Global Financial Crisis”. The forum was a full-day event bringing together approximately 500 senior regulators, policymakers, leading financial institutions and professionals from around the globe.

Regulation of Alternative Liquidity Pools (ALPs)

Feb-14: The SFC issued a two-month consultation paper with proposals to standardized the regulation of Type 7 (Automated Trading Services/ATS) activities, which include ALPs also known as alternative trading systems and “dark pools” i.e. electronic systems through which the crossing or matching of orders involving listed or exchange traded securities are conducted with no pre-trade transparency. In the past, the SFC’s practice has been to impose ad-hoc licensing conditions on a case-by-case basis for ALP operators. The reforms will ensure that a uniform and consistent set of standards will apply across the board to all Type 7 licensees providing ALPs, which will (among others) restrict access to institutional investors, require client orders be given priority (ahead of proprietary trades) and relax earlier restrictions on trading hours.

REGULATORY STANDARDS UPDATES

At the same time regulators are on the march to create more resilient financial markets. A host of proposed new measures include:

A. new legislation to regulate and license OTC derivatives - expected later this year;

B. new statutory powers allowing regulators to intervene and bail-out systemically important FIs without relying on public funding - expected end-2015; and

C. more than 51 new posts are to be created in the SFC in 2014 (in addition to the 47 positions created last year) which raises the total headcount to 845 staffers focusing in the principal areas where regulatory and supervisory frameworks are to be strengthened, namely:

i. regulation and supervision of financial markets;

ii. listed company and intermediaries surveillance;

iii. cooperation with Mainland China;

iv. compliance with new international standards on financial market infrastructure; and

v. boosting litigation capabilities of the SFC’s enforcement division.

Other major themes expected to remain constant or ramped up this year include corporate governance, internal control weaknesses and AML compliance.

In the context of the financial advisory sector, one area many are paying closer attention to are questions of suitability and sales practices given the proposed reforms by regulators to the professional investor regime. How far these reforms will go remains to be seen. But it is clear intermediaries will need to revisit client agreements that either exclude or limit suitability requirements for professional investors.

EDITORIAL: HONG KONG REGULATORY OUTLOOK FOR 2014

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SFC conducts census of OTC derivatives market

Nov-13: The SFC conducted a census of existing market participants that offer or provide OTC derivatives services or products. The aim was to identify market participants that may need to be licensed or registered to conduct Type 11 (dealing or advising in OTC derivative products) or Type 12 (provided clearing agency services for OTC derivative transactions) regulated activity ahead of introduction of the new regime, which is expected to be vetted by Legco later in the year.

SFC establishes taskforce to monitor corporate announcements

Dec-13: As part of the SFC’s proactive efforts to crack down on corporate misconduct, the Carlson Tong (SFC, Chairman) announced the establishment of a dedicated corporate regulation team to review company announcements, circulars, financial reports, press reports and analyst research to “check for any early signal of misconduct” by Hong Kong listed companies. Tong warned that companies with poor financial results, frequent restructurings, profit warnings or changes in directors/auditors would be put on watch lists.

New statutory disclosure regime statistics

Jan-14: A year after the new statutory civil regime for listed corporations to disclose inside information came into effect, statistics published by the SFC reveal a dramatic increase in the announcements about inside information (up 52%) and profit alerts and warnings (up 16%). Announcements about trading performance, such as monthly updates on sales figures, production volumes and other key performance indicators also increased (up 48%).

INTERMEDIARIES/MARKET SUPERVISION


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In summary, the tribunal found the sponsor had:

• failed to conduct adequate due diligence, in particular, failed to properly assess the accuracy, reliability and completeness of information concerning the applicant’s financial suitability for listing;

• breached its undertaking to use reasonable endeavours to ensure that all information submitted (including the disclosures made in the prospectus) was true in all material respects and did not omit any material information; and

• failed to keep proper books and records in relation to the due diligence work undertaken.

After a recent spate of high-profile scandals involving sponsors, a revamp of the sponsor regime and Code of Conduct in October 2013, this decision marks the first occasion that the tribunal has examined the regulatory framework and specific obligations for IPO sponsors in Hong Kong to act with due skill, care and diligence in the best interest of their clients and the integrity of the market. It highlights ongoing concerns from the regulators about the professional standards of some IPO sponsors (often made worse by inadequate paper trails) and

More generally, the industry as a whole is on red-alert over the global regulatory clamp-down. Institutions and advisors can no longer afford to be passive in an aggressive enforcement environment with spiraling fines. More and more advice Sidley provides to its clients is of an advisory or proactive nature. Clients want to learn from the lessons of others. Sidley’s continuing efforts to closely monitor the regulatory landscape have helped clients identify and predict regulatory themes, become aware of

practical illustrations of misconduct, and perhaps more importantly, avoid being the subject of enforcement action by ensuring that clients are not exposed to the same or similar risks.

Against this background, we hope you find the featured articles in our latest regulatory newsletter to be helpful. Of course, if you have any questions or would like to discuss further how Sidley can continue to help you stay one step ahead, please do not hesitate to contact us.

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KEY PRODUCT DEVELOPMENTS

HK-China regulators agree deal for cross-border sale of funds to retail investors

Jan-14: Alexa Lam (Deputy CEO, SFC) recently announced that a deal allowing ‘mutual recognition’ of funds domiciled on both sides of the border will be finalized soon. The arrangement will allow funds in both markets to be sold to retail investors on either side. This potentially opens the doors to billions of dollars of cross-border investment in stocks and bonds and is likely to also compete directly with other similar cross-border initiatives for retail funds in the pipeline among ASEAN and APEC member states, which are expected to be launched in mid-2014 and early-2016 respectively.

dispels any wishful thinking that lower standards are to be tolerated for GEM listings. It also provides important guidance on the scope of a sponsor’s obligations and, in particular, the reliance that it is acceptable for sponsors to place on third-party expert reports.

Background facts

Here, the sponsor had been engaged to act on behalf of a listco, which was principally engaged in the provision of funeral services. Three principal failings were identified by the tribunal:

1. The applicant had produced two different sets of cash flow figures from two different auditors. One enabled the applicant to meet the relevant criteria under the GEM listing rules on track record. The other did not. The sponsor picked the one that “worked” for the purposes of presentation to HKEx in the listing process. The tribunal found that the sponsor had intentionally misled HKEx by failing to disclose the material discrepancy between the two reports compiled by the different auditors. The tribunal said: “The failure to raise it {the material difference in the figures} in the substantive application and the studied avoidance of revealing it when answering enquiries from [HKEx] was, we are satisfied, intentional. As such, in the circumstances, on an objective assessment, it had to constitute an intention to mislead [HKEx].”

2. The proceeds of the IPO were to be used to fund the renovation of a major project in Taiwan. However, the applicant only had a limited usage right over the project as agent and the sponsor had carried out very limited checks on the owner’s title and financial history. The tribunal found that the failure to ascertain and disclose the extent of encumbrances on the title of the major project constituted a material risk to the success of listco’s investment.

3. The tribunal found that the sponsor had failed to recognize that various financial projections and breakdowns concerning the commercial viability (as agent) of the major project were materially problematic. The failure of the sponsor to ensure the prospectus was amended in an acceptable form therefore rendered the risk disclosures misleading.

Some of the more significant aspects of the decision are summarized below.

GEM listing applications do not warrant a modified degree of due diligence

The tribunal was unimpressed with the sponsor’s bold statement of general principle that “it is not sensible or realistic to expect the same level of minute due diligence

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by sponsors in a GEM listing where the total fee charged, as here, was HK$1.5 million, when a Main Board listing sponsor charges routinely in the tens of millions.” The tribunal expressly confirmed that there is no difference in the standards of due diligence expected of sponsors in GEM and Main Board listings. It also rejected any concern that sponsors would be frightened away if the risks outweighed the rewards. This was because the tribunal felt that commercial realities showed that the role and responsibilities of a sponsor were often linked to other more profitable functions e.g. underwriting the listing.

Duty to disclose material differences/conflicting independent expert advice

The regulatory framework in place at the time due diligence had been conducted expressly exempted from scrutiny advice obtained from independent legal advisers and accountants subject to the proviso that the sponsor had satisfied itself that the relevant expert or professional possessed sufficient expertise. However, the tribunal made two general observations: (i) this exemption could not be interpreted as a prohibition i.e. a sponsor cannot abrogate responsibility for due diligence by engaging independent experts or obtaining independent legal opinions; and (ii) even if it may be difficult or inappropriate to challenge the correctness of expert/legal advice, it does not follow that it must be received without any form of question or enquiry. The sponsor still remained under a duty to scrutinize and assess the quality of such advice. For example, legal advice received may quite patently be incorrect because it has confused the facts; equally the advice, even though correct, may not answer the question posed or may only do so in part. This duty was especially paramount where conflicting advice is obtained that is integral to an applicant’s eligibility for listing.

Duty to act in best interests and integrity of the market

The tribunal concluded that, when faced with conflicting expert reports, sponsors are obliged to give a complete picture of all material matters to HKEx, and not simply rely on the advice most advantageous to the listing. The tribunal stated that “a sponsor is entitled to rely on the correctness of an audit report prepared by an independent expert. But the application of such a principle must always be considered in context”. Where issues arise that have a material bearing on suitability for listing, then the wider duty to act in the best interest of integrity of the market as a whole must take precedence over the narrower duty to act in the best interest of their clients. The unwillingness of the sponsor to ask difficult but essential questions of the

company in order to ensure that all relevant information was publicly disclosed was viewed by the tribunal as “perhaps the most serious aspect of SHKI’s failure of due diligence.”

Scope of duty to ensure that all material risks are disclosed in the prospectus

The tribunal held that sponsors must provide unequivocal advice to applicants as to the adequacy of risk disclosures and will be held accountable for failing to make it clear that, as sponsor, it was their duty to ensure that all material risks were disclosed in the prospectus. Potential investors are entitled to be given accurate information not only as to general risks, but importantly, as to specific risks that may undermine the commercial viability of significant projects, such as encumbrances. It was no excuse for the sponsor to say after the event that little or no damage was done, or disclosure of the information would not have made any difference.

Duty to properly assess the reliability of financial forecasts

The tribunal also held that the obligation of sponsors “to conduct proper due diligence, assessing profit forecasts and cash flow figures ‘with a questioning mind and being alert to information, including information from experts, that contradicts or brings into question’ their reliability” extended to all figures submitted to HKEx even though management had ultimately decided to omit financial forecasts in the prospectus and opted instead to warn investors of the general commercial uncertainties

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Sponsor liability

• In Jan-14 the SFAT upheld the SFC’s decision to publicly reprimand an IPO sponsor and suspend the sponsor’s license for one-year for serious due diligence failures in a listing application on the Growth Enterprise Market. The tribunal reduced the fine imposed by the SFC from HK$15.5 million to HK$12 million (see feature article above).

Internal control failures

• In Nov-13 one licensed representative was banned for three months and another reprimanded and fined HK$100,000 for breaches of AML guidelines. The pair had funnelled funds through their own personal accounts from HK/P.R.C. money changers on behalf of Mainland-based clients. The funds were subsequently transferred to the securities account of the clients. The SFC explained the arrangement “disguis[ed] the true source of the funds that were being used and prejudic[ed] their employers’ obligations to know the origin of their clients’ money, both of which constitute important information in the prevention and identification of money laundering activities.”

Life bans

Life bans were imposed on seven licensed representatives since our last quarterly newsletter:

• Three life bans were imposed following convictions for misappropriation of client assets involving sums ranging from HK$10,000 up to HK$31 million (i.e. US$1,000 to US$4 million)

• Four others were banned for forgery of client authorisations or falsification of instruments

• One ban followed a conviction for false trading

The SFC also imposed a three-month ban on a licensed representative for failing to disclose to their employer the possession of inside information when seeking consent to trade in securities for their own account.

Licensing related issues

• In Nov-13, an unlicensed futures contract adviser was remanded in jail custody pending sentence after entering a guilty plea to criminal charges. He was later sentenced to three-month imprisonment (suspended for one year). Although custodial sentences for unlicensed regulated activities have been imposed in the past, this decision marks the first time someone has been remanded into custody pending sentence.

Many recall the decision of the former UK Financial Services Authority (FSA) in the Einhorn case to impose hefty fines for insider dealing after a decision to deal was made following a routine pre-sounding call that disclosed information about a possible fund-raising exercise. Even though the call took place on an “open basis,” the portfolio manager (David Einhorn) and his U.S.-based hedge fund (Greenlight Capital) were fined a total of £7.288 million. Sanctions were also imposed on the other parties: the tipper (the bookrunner acting for the issuer) was fined £350,000; Greenlight’s compliance officer was fined £130,000 and disqualified from acting as a compliance officer, and the executing broker was fined £65,000.

The FSA’s approach, which is likely to be followed by Hong Kong regulators, illustrates the dangers to market

concerning its principal business activities.

The tribunal did acknowledge the inherent difficulties of making forecasts but expressly rejected the assertion that discrepancies in respect of profit forecasts and estimates can be regarded as immaterial because they constituted estimates of future revenue which was not an exact science. The tribunal held that, having regard to the apparent discrepancies in the figures, sponsors are obligated (at least) to ensure that management has made revisions to forecasts after due and careful enquiry.

Duty to keep proper books and records – quality not just quantity

The tribunal acknowledged that sponsors were not expected to record every act, suggestion and matter for discussion, it held that “in managing a listing application there will invariably be matters which, on any objective consideration… will be recognized as being matters that may be contentious or material in some way. Common sense dictates that such matters be recorded. [A] failure to record such matters may in the eyes of the reasonable observer suggest an intention to disguise.” The tribunal concluded: “In summary, the SFC must be able , by a study of the sponsor’s records , to see how the sponsor discharged its duties, especially when faced…with issues that are or likely to be contentious….We would stress that the keeping of proper records is not merely an aid to investigation by the SFC, it is equally a protection for sponsors.”

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SIGNIFICANT ENFORCEMENT ACTIONSIPO SPONSORS BEWARE – SFAT AFFIRMS REGULATOR’S STANCE ON PROFESSIONAL STANDARDS

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participants and legal and compliance officers, who implement or approve trading strategies without a clear understanding of the market abuse regime.

Pre-Sounding

Pre-sounding takes the form of discussions with a select pool of investors to ascertain market interest for a potential transaction (e.g. a private placement or block trade) before making a public announcement. Typically, banks will sound out a handful of potential investors about their interest, either on a no-names, multiple names or wall-crossed basis. In the latter scenario, confidential information is disclosed to the investor, who, being treated as a “corporate insider,” enters into a non-disclosure agreement and is restricted from dealing in the securities pending a public announcement. However, when an investor refuses to be wall-crossed, they are usually not regarded as an insider – at least, so the industry thought until now.

Background facts

Mr. Einhorn decided to sell Greenlight’s entire shareholding in Punch Taverns Plc (Punch) after learning about a proposed issuance of shares by Punch during sounding discussions with the investment bank and Punch’s management. The enforcement action was the first taken by the UK regulator to prohibit trading based on selective information disclosed during an open pre-sounding call despite:

• the trading not being characterized as deliberate or reckless insider dealing;

• the fact that the information taken in isolation did not constitute inside information;

• the tippee, Mr Einhorn1, having refused to be wall-crossed or to sign a non-disclosure agreement with the issuer;

• the assurances by Andrew Osborne, the broker at a U.S.-based investment bank2 who acted as Punch’s broker/bookrunner, that no inside information would be disclosed;

• the conclusion reached by Greenlight’s compliance officer that the contents of the pre-sounding discussions did not warrant any restrictions on trading or further investigation;

• the conclusion reached by the executing broker that the circumstances surrounding the trades did not justify the filing of a suspicious transactions report nor did they give rise to reasonable ground to suspect that the transactions might constitute market abuse;

1 The regulator considered that Mr. Einhorn’s behavior could be attributed to Greenlight because it was wholly owned by him, he acted as the president and sole portfolio manager and was responsible for all investment decisions made on behalf of Greenlight.2 The investment bank itself was not sanctioned.

• the advice obtained from Punch’s external lawyers that the pre-sounding call could take place provided that it was in general terms, not definitive, did not disclose that the transaction was going ahead, did not reveal details about the timing, structure or pricing of any potential transaction; and

• the assertions made during the call by Punch’s management and Mr. Osborne that no formal decision had been made consistent with the legal advice from Punch’s lawyers.

The regulator concluded that in isolation no single piece of information shared with Mr. Einhorn on the 45-minute call amounted to inside information. However, taken as a whole and in context, the information could be properly characterized as inside information because it effectively disclosed the “anticipated” size, purpose, and timing of the proposed transaction. We consider some of the more significant lessons from this decision and the Hong Kong perspective below.

Institutional investors not entitled to rely on disclaimers

Institutional investors cannot simply rely on assurances that no inside information will be provided when participating in sounding calls. In practical terms, market participants will be expected to interpret for themselves whether (viewed objectively) the information they have passed on or received is inside information—even when they are not wall-crossed and even when express words to the contrary are used. This is because attempts to persuade institutional investors to be wall-crossed are not usually made unless a transaction is close to launch. It was irrelevant that Mr. Einhorn had not been told that the transaction was definitely going to proceed and, indeed, there was no certainty at the time of the sounding call.

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Sidley Austin provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship.

Thus information obtained from an insider that influences a decision to trade or affects investment strategy may well be material and must therefore be evaluated.

A cautious approach must be taken by compliance officers before approving share dealings following discussions that take place on a non-wall crossed basis. Compliance officers should not place undue weight or reliance on being told by traders that the information was received on an open basis, that discussions were merely conceptual and no formal decisions had been made. At a bare minimum, compliance officers are expected to ask questions to confirm and document in writing the reasons for the trading and take appropriate follow-up action in these circumstances.

Duty to report suspected market abuse

Similarly, the regulator expects market participants that arrange or execute a transaction for investors to be alert to the possibility that the transaction might constitute market abuse. This is even where such suspicions only become apparent once a trade has been executed and after a subsequent corporate event or announcement.

The Hong Kong perspective

In Hong Kong, the market misconduct regime is broadly equivalent to the UK market abuse regime. As such, the regulatory approach in Einhorn is likely to be followed by the Hong Kong regulators (SFC) with equal vigour. The inadvertent sharing of confidential information, even where no dealing takes place, has been held by the SFC to fall well below the standards of due care and diligence with which the SFC expects licensed persons to act. Bearing in mind the best interests of its clients and the integrity of the market, such conduct exposes market participants to disciplinary action.

In Justin Ho3, the SFC confirmed that it expects restrictions to be put in place to ensure that wall-crossed employees do not discuss or recommend companies to others until the information becomes public or immaterial. In that case, the SFC did not instigate insider dealing proceedings because no dealing subsequently took place. However, the SFC did state that if employees receive information that constitutes inside information and then recommend the stock to others and trading subsequently takes place, the SFC will bring insider dealing proceedings.

3 HO King Man Justin, SFC Enforcer, 2 Jan 2008.

More recently, in Du Jun4 the Court of Appeal said it will adopt a common sense approach when considering whether confidential information disclosed/obtained by an insider is “relevant” or inside information. Important information irrespective of whether or not it would have a positive or negative impact can still properly be characterized as inside information if it is likely to be of interest to the ordinary reasonable investor and influence the decision to invest even if it subsequently turns out to be inaccurate.

In the worst-case scenario, legal and compliance officers who authorize trading that should not have been approved, or fail to report a suspicious transaction under the Code5, risk inadvertently aiding and abetting a contravention of the SFO.

Conclusion

The financial services industry as a whole, and compliance officers in particular, need to keep a careful watch of the underlying purpose and manner in which potential transactions are marketed, trading strategies executed and information disseminated. In the current enforcement environment, regulators are going to be more skeptical when faced with suspicious transactions and even non-blatant conduct may be viewed as improper.

4 HKSAR v Du Jun [2012] HKCA 391 (20 September 2012, per Hon Stock VP)5 Code of Conduct for Persons Licensed by or Registered with the SFC, January 2014 (14th Ed.)


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Sidley garnered two awards in Dispute Resolution and Regulatory/Compliance in 2013:International Firm of the Year for Dispute Resolution, China Law & PracticeFirm of the Year for China Regulatory/Compliance, Asian-MENA Counsel

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