Results of a survey conducted by The Hong Kong Institute of Chartered Secretaries (HKICS) of company secretaries of the top 100 Hang Seng Index companies show that 96% of those who responded to the questionnaires think that mandatory paid newspaper announcements should be abolished.
Main Board issuers are currently required under the Main Board Listing Rules to publish announcements by way of a paid announcement in at least one English-language and one Chinese-language gazetted newspaper. Since May 2001, they have also been required to submit electronic copies of announcements for parallel publication on the HKEx website.
Sixty-one percent (61%) of respondents stated that they would prefer immediate abolition without a transitional phase while 35% stated that they would prefer an interim period ranging from three months to two years.
"Market sentiment is rather clear on this issue, paid newspaper announcements should be abolished as soon as possible," said Mr. Richard Leung, President of HKICS. "We believe that such announcements do not add much value in communicating information to investors, are an unnecessary burden, especially on smaller cap companies, and in the age of the internet, an anachronism."
Hong Kong Exchanges and Clearing Limited (HKEx) announced in November 2005 its intention to abolish paid announcements in newspapers after an interim period of nine months. During the proposed interim period Main Board issuers will be required to publish a summary announcement or a notification in newspapers.
Survey results indicate that of those supporting an interim period, 65% prefer notification to a summary announcement.
The abolition of the requirement for issuers to publish paid announcements in newspapers is considered to be a move towards international best practice.
Fifty-three percent (53%) of HSI company secretaries polled responded to the postal survey which was conducted during December 2005.
