Disciplinary jurisdiction and sanctions
(1) The Exchange may bring disciplinary actions and impose or issue the sanctions in rule 3.11 against any of the following:—
(a) a listed issuer or any of its subsidiaries;
(b) any director of a listed issuer or any of its subsidiaries (or any alternate of such director);
(c) any member of the senior management of a listed issuer or any of its subsidiaries;
(d) any substantial shareholder of a listed issuer;
(e) any significant shareholder;
(f) any professional adviser of a listed issuer or any of its subsidiaries;
(g) any employee of a professional adviser of a listed issuer or any of its subsidiaries;
(h) any authorised representative of a listed issuer;
(i) any supervisor of a PRC issuer;
(j) any guarantor in the case of a guaranteed issue of debt securities or structured products; and
(k) any other party who gives an undertaking to or enters into an agreement with the Exchange.
(2) For the purposes of this rule:
(a) “professional adviser” includes any financial adviser, independent financial adviser, lawyer, accountant, property valuer or any other person retained by an issuer to provide professional advice in relation to a matter governed by the GEM Listing Rules. It does not include Sponsors or Compliance Advisers; and
(b) “senior management” includes:
(i) any person occupying the position of chief executive, supervisor, company secretary, chief operating officer or chief financial officer, by whatever name called;
(ii) any person who performs managerial functions under the directors’ immediate authority; or
(iii) any person referred to as senior management in the listed issuer’s corporate communication or any other publications on the Exchange’s website or on the listed issuer’s website.
(3) The scope of any disciplinary action taken against a professional adviser under rules 3.10, 3.11 and 3.11B, including any ban imposed on a professional adviser under rule 3.11(9), shall be limited to matters governed by or arising out of the GEM Listing Rules.
(4) Professional advisers, when acting in connection with GEM Listing Rule matters on which they are instructed to advise, shall use all reasonable efforts to ensure that their clients understand and are advised as to the scope of and their obligations under the GEM Listing Rules. They must not knowingly provide any information to the Exchange which is false or misleading in a material particular.
If the GEM Listing Committee finds there has been a breach of the GEM Listing Rules by any of the parties named in rule 3.10, it may:—
(1) issue a private reprimand;
(2) issue a public statement involving criticism;
(3) issue a public censure;
(4) state publicly that in the Exchange's opinion the occupying of the position of director or senior management of a named listed issuer or any of its subsidiaries by an individual may cause prejudice to the interests of investors;
(5) in the case of serious or repeated failure by a director to discharge his responsibilities under the GEM Listing Rules, state publicly that in the Exchange’s opinion the director is unsuitable to occupy a position as director or within senior management of a named listed issuer or any of its subsidiaries;
(6) deny the facilities of the market to a listed issuer for a specified period and/or until fulfilment of specified conditions and prohibit dealers and financial advisers from acting or continuing to act for that issuer;
(7) suspend trading in the listed issuer’s securities or any class of its securities;
(8) cancel the listing of the listed issuer’s securities or any class of its securities;
(9) ban a professional adviser or a named individual employed by a professional adviser from representing any or a specified party in relation to a stipulated matter or matters coming before the Listing Division or the GEM Listing Committee for a stated period;
(10) recommend reporting the conduct of the party in breach to the Commission or another regulatory authority, whether in Hong Kong or overseas (for example, the Financial Secretary or any professional body);
(11) order rectification or other remedial action to be taken within a stipulated period; and
(12) take, or refrain from taking, such other action as it thinks fit, including making public any action taken.
(1) Any reference to the GEM Listing Committee in rules 3.11, 3.11A and 3.11B includes both the GEM Listing Committee and the GEM Listing Review Committee.
(2) Where the GEM Listing Committee or the GEM Listing Review Committee (as the case may be, after the decision has become final), issues:
(i) a public sanction under rule 3.11, such sanction will be published with reasons; or
(ii) a private reprimand, the substance of such sanction may be published with reasons without disclosing the identities of the parties involved.
(3) In exercising its powers of sanction the Exchange will recognise the differing roles and levels of responsibility of the persons against whom sanctions may lie under rule 3.10.
(4) For the purposes of this rule and rule 3.11A(2) below, denying "facilities of the market" is not intended to mean cancellation of listing. It is meant to include withholding approval of any matters that require approval from the Exchange, including the issuance of shares.
(1) If a statement under rule 3.11(4) with follow-on actions in sub-rule (2) below, or rule 3.11(5), has been made against an individual, the listed issuer:
(a) named in the statement; or
(b) in respect of which any of its subsidiaries is named in the statement
must include in all of its announcements and corporate communications to be published a reference to the sanction made under rule 3.11(4) or 3.11(5), unless and until that individual ceases to be a director or senior management, as the case may be, of the named listed issuer and/or its subsidiaries.
(2) If an individual against whom a statement has been made under rule 3.11(4) or 3.11(5) occupies the position of director or senior management, as the case may be, of the named listed issuer or subsidiary, as the case may be, after a date to be determined and specified by the GEM Listing Committee, the GEM Listing Committee may, at any time in its sole discretion, impose the follow-on actions below:
(a) order that the facilities of the market be denied to that issuer for a specified period; and/or
(b) suspend or cancel the listing of that issuer's securities or any class of its securities.
(3) The GEM Listing Committee may make public any follow-on action imposed under rule 3.11A(2).
In addition to imposing the sanctions in rule 3.11 when a party has failed to discharge obligations or responsibilities expressly imposed on that party by a specific GEM Listing Rule, the GEM Listing Committee may impose the sanctions in rule 3.11 on any of the parties named in rule 3.10 above, if it finds the party has:-
(1) failed to comply with a requirement imposed by the Listing Division or the GEM Listing Committee;
(2) contravened an undertaking given to or breached an agreement with the Exchange in relation to a listing matter; or
(3) caused by action or omission or knowingly participated in a contravention of the GEM Listing Rules or a requirement referred to in (1) above.
Note: In respect of parties covered by section 23(8) of the SFO, a sanction may be imposed under rule 3.11B(3) in and only in the circumstances prescribed for disciplinary action in the arrangements agreed from time to time between the Exchange and the relevant professional regulatory body; and, in considering whether a party covered by section 23(8) of the SFO has breached rule 3.11B(3), the Exchange will take into account, among other things, whether such party has knowingly or recklessly facilitated or participated in a breach of the GEM Listing Rules or any undertaking given to or any agreement with the Exchange.
The GEM Listing Committee will, if requested by any party to be reprimanded, criticised, censured or otherwise sanctioned in pursuance of the powers contained in rules 3.10, 3.11, 3.11A and 3.11B (a “review applicant”), give its reasons in writing for the decision made against that review applicant pursuant to rules 3.10, 3.11, 3.11A and 3.11B and that review applicant shall have the right to have the decision against him referred to the GEM Listing Review Committee for a further and final review. The GEM Listing Review Committee may endorse, overturn, modify or vary the ruling of the earlier meeting. Subject to rule 3.17A, the decision of the GEM Listing Review Committee on review shall be conclusive and binding on the review applicant. If requested by the review applicant, the GEM Listing Review Committee will give reasons in writing for its decision on review.
A request for a review of any decision of the GEM Listing Committee made pursuant to rule 3.12 must be served on the Secretary within seven business days of the issue of the GEM Listing Committee's decision unless written reasons for a decision are requested, in which case a request for a review of that decision must be notified within seven business days of the issue of the written reasons.
Any request for the GEM Listing Committee or the GEM Listing Review Committee to give its reasons in writing for its decision shall be made within three business days of the issue of its decision. Where requested, written reasons for a decision will be provided to all parties to the proceedings by the GEM Listing Committee or the GEM Listing Review Committee (as the case may be) as soon as possible and, in any event, within 14 business days of the receipt of the request.
Any person, other than an issuer, its Sponsor, Compliance Adviser and authorised representatives, who is aggrieved by a decision of the Listing Division or the GEM Listing Committee may express his views, in writing, to the Chairman of the GEM Listing Committee. The GEM Listing Committee may, in its sole discretion, decide to fully review the matter, having regard to the rights of any third party which may have been created in reliance upon the earlier decision.
The GEM Listing Committee and the GEM Listing Review Committee may from time to time prescribe such procedures and regulations for any review meetings or hearings of the respective Committee as they may think fit, including procedures for appointing from time to time the Chairman for any review hearing, procedures governing members’ conflict of interest and the publication of decisions and reasons.