SFC applies takeover-and-merger framework to REITs

On 25 June The Securities and Futures Commission (SFC) released to press releases in relation to the application of the Codes on Takeovers and Mergers and Share Repurchases (Codes) to SFC-authorised real estate investment trusts (REITs).

The conclusions from the consultation process undertaken in January were also released on 25 June. Consultation Conclusions

Mr Martin Wheatley, the SFC's Chief Executive Officer, said "We believe that the implementation of the proposals represent a significant step forward in establishing a regulatory framework that better protects the investors’ interests and assists the further development of the REIT market in Hong Kong"

The proposed amendments to the Code on REITs (REIT Code) and the Codes include aligning the control structure of REITs with that of listed companies and introducing a set of REIT Guidance Notes. The amendments took effect from Friday, 25 June 2010.

The second release was in relation to amendments to the Codes in relation to pre-vetting of certain takeovers-related matters. The SFC announced that certain routine takeovers-related announcements will no longer be required to be submitted to the Executive (Note 1) for comment prior to publication.

For further information please see Post-Vetting Requirement