JPMorgan falls foul of stricter rules in Hong Kong

Hong Kong

JPMorgan has become the first global investment bank to fall foul of Hong Kong's stricter IPO sponsorship rules, dealing a blow to its reputation in the region.

Reuters reports that the Hong Kong stock exchange introduced tougher disclosure rules in 2014, which can make banks criminally liable if a listing prospectus is found to have misled investors.

It returned a listing application for Shenhua Health Holdings, a subsidiary of monosodium glutamate (MSG) producer Fufeng Group, on March 29 saying it needed more information, exchange data showed. JPMorgan Securities (Far East) Ltd acted as sole sponsor of the IPO.

Only seven other initial public offerings (IPOs) have been returned since the new rules came into effect. After applications are returned, companies must wait at least eight weeks before re-submitting an application.

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JPMorgan becomes first global bank to fall foul of Hong Kong's stricter IPO sponsorship rules

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