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Let's talk antitrust: Discussing recent cases and emerging competition issues
Recent cases and judgments have shone a light on some emerging themes and trends that companies will want to consider as part of their risk management framework.
Developments and market trends in Asia
Global | Publication | March 2017
Authors: Emma de Ronde, James Parker and Nicholas Wilson
On March 1, 2017, the SFC commenced a consultation into proposals to update the Professional Investor Rules to incorporate modifications previously approved under section 134 of the SFO. The proposed amendments will, if enacted, expand the definition of corporate professional investors, allow aggregation of certain assets, and allow the use of alternative forms of evidence to determine whether a person qualifies as a professional investor. The consultation period will close on April 3, 2017.
The Securities and Futures Commission (the SFC) has launched a public consultation process in respect of proposed amendments to the Securities and Futures (Professional Investor) Rules (Chapter 571D of the Laws of Hong Kong) (the Professional Investor Rules). The public consultation process was launched on March 1, 2017.
The principal changes proposed in respect of the Professional Investor Rules are as follows.
The SFC proposes to expand the types of investment holding companies that will qualify as professional investors pursuant to the Professional Investor Rules. In particular, if the amendments are enacted as proposed, an investment holding company which is wholly-owned by one or more professional investors or which wholly-owns a corporation that meets the asset or portfolio thresholds set out in the Professional Investor Rules, would also qualify as a professional investor pursuant to the Professional Investor Rules.
The SFC considers that this expansion of the categories of corporates which will qualify as professional investors will facilitate and encourage the participation of corporates in private placement activities.
The SFC proposes that licensed corporations/registered institutions (collectively, intermediaries) be permitted to include joint accounts/partly owned portfolios in assessing whether an individual meets the prescribed portfolio thresholds to qualify as a professional investor.
If the amendments are enacted as proposed, an intermediary could take into consideration the following in ascertaining whether an individual meets the relevant portfolio threshold to qualify as a professional investor
The SFC also proposes to refine the types of evidence an intermediary can take into account to determine whether a person meets the relevant assets or portfolio thresholds to qualify as a professional investor. In particular, it is proposed that intermediaries be permitted to rely on the following additional forms of evidence
In the past, some intermediaries have sought, and the SFC has approved, modifications to the Professional Investor Rules in order to cater to the practicalities of businesses. The suggested amendments to the Professional Investor Rules seek to formalise the existing modifications previously granted to specific intermediaries under section 134 of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (the SFO) so that they are applicable to all market participants, thereby promoting transparency and market consistency.
The SFC has clarified that this consultation will not result in a further review of the professional investor regime in the Code of Conduct for Persons Licensed by or Registered with the SFC. The professional investor regime was the subject of a previous consultation process with consultation conclusions published in September 2014 and amendments which took effect on March 25, 2016.
Interested parties are invited to submit their comments on the proposed amendments to the Professional Investor Rules to the SFC by April 3, 2017.
The SFC will publish its consultation conclusions following the end of the consultation period. The SFC’s consultation conclusions will set out the changes that will be made to the Professional Investor Rules and the timing for these changes to come into effect, subject to negative vetting by the Legislative Council of Hong Kong.
The consultation paper and further details can be found on the SFC’s website.
Video
Recent cases and judgments have shone a light on some emerging themes and trends that companies will want to consider as part of their risk management framework.
Publication
After a lacklustre finish to 2022 when compared to the vintage year for M&A that was 2021, dealmakers expected 2023 to see the market continue to cool in most sectors, in response to the economic headwinds of rising inflation (with its corresponding impact on financing costs), declining market valuations, tightening regulatory scrutiny and increasing geopolitical tensions.
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On 18 September 2023, the CMA published its Initial Report (Initial Report) on AI Foundation Models (FM), supplemented in April 2024 with the publication of its “Update Paper” focused on potential antitrust risks associated with FMs and a “Technical Update Report” providing more detail on the development on FMs (collectively the “Reports”). Below, we consider these CMA publications.
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