Hong Kong is overhauling its initial public offering listing rules, putting more pressure on companies and banks, reports the Wall Street Journal.
Citing unnamed sources, the Journal says banks will need to do more to vouch for the integrity of IPO candidates. Under the new rules banks could be held criminally liable if they they bring companies to market that include false statements in their prospectuses.
Companies will also be required to disclose their financial information far earlier in the process, similar to what happens in the U.S., where IPO candidates must publish their draft offering document well before they begin taking order for shares.
The Hong Kong's Securities and Futures Commission is also proposing that if there are "untrue statements and material omissions" in the prospectus, the lead banks, or sponsors, should be criminally liable. Under the curent law, only company directors, promoters and "any person who has authorized the issue of the prospectus" would be criminally liable for prospectus misstatements.