UBS fined $47.8m and banned from sponsoring IPOs in Hong Kong for one year

The SFC named two of the companies related to the IPOs in question. China Forestry raised $216m from a 2009 IPO that was jointly sponsored by UBS and Standard Chartered. However, the stock was suspended after regulators discovered financial irregularities in 2011 – China Forestry is now facing liquidation. Tianhe Chemicals was the second company named by the SFC, which refused to disclose the name of the third business. Shares in Tianhe Chemicals have failed to trade since 2015 after a short seller levelled allegations of fraud against the company.

As Hong Kong faces growing pressure to reintegrate with mainland China, businesses have become increasingly concerned that the famed ‘laissez-faire’ principle that previously guided Hong Kong could be under threat. It is yet to be seen how markets will react to today’s decision by the SFC – stricter rules could increase confidence in the finance sector or, conversely, end up deterring businesses that have traditionally enjoyed free rein.