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Responses to SFC’s Consultation Paper on the Regulatory Framework for Pre-deal Research We make these comments in response to the Consultation Paper on the Regulatory Framework for Pre-deal Research, published by the SFC in September 2010. We note that the SFC has not directly sought to resolve any of the issues identified in the consultations that have taken place to date in relation to pre-deal research reports. The proposals address only disclosure of actual or potential conflicts of interest and seek to limit the information on which research reports are based to that which is in the price range prospectus or which is publicly available. We do not think that, in practice, this provides any additional protection for public investors. Nor will it avoid the conditioning of the market that regularly occurs as a result of the leakage of predeal analyst reports. When compared with other developed financial centres, Hong Kong is possibly the most relaxed in terms of regulation of pre-deal research and these proposals go no further in changing that approach. We have no objection to the additional disclosure obligations that are imposed as a result of the amendments to paragraph 16 of the Code of Conduct, either in relation to their extension to research reports on REITs or research reports on new listing applicants. There is no objective justification for the different treatment of those types of reports under the Code of Conduct in the past. Additionally, it is sensible for the “assurances” restriction in paragraph 16.5(f) to be extended to new listing applicants. On the whole, we support the new provisions of the Code of Conduct and the CFA Code which deal with preventing disclosure of information about an issuer, other than that in the prospectus or what is available publicly, to analysts. These matters are in our view, adequately addressed by existing regulations and already form part of investment banks’ compliance procedures. However, we do not object to making specific provision if the SFC think it desirable. Our comments on the specific questions raised are, for completeness, set out below. QUESTION 1: Do you agree that the requirements in paragraph 16 of the Code of Conduct should be extended to cover research analysts in relation to Pre-deal Research reports? Please explain your views. We agree that the requirements of paragraph 16 of the Code of Conduct should be extended to cover pre-deal research reports. QUESTION 2: Do you agree that the requirements in paragraph 16 of the Code of Conduct should be extended to cover research analysts covering proposed listings of and listed SFCauthorised REITs in Hong Kong? Please explain your views. We agree that the requirements of paragraph 16 of the Code of Conduct should be extended to research reports covering proposed listings of and listed REITs. QUESTION 3: Do you agree that the firm employing research analysts preparing Pre-deal Research reports on an Applicant should be required to establish, maintain and enforce a set of written policies and control procedures to ensure that these analysts are not provided by the firm with any material information or forward looking information (whether qualitative or quantitative), concerning the Applicant that are not: (a) reasonably expected to be included in the prospectus; or (b) publicly available? Please explain your views. We have no objection to this new provision. appropriate procedures in place already. HOK-#2330888-v1 We believe that most investment banks will have QUESTION 4: Do you agree that a research analyst preparing a research report on an Applicant should not seek to obtain from the Applicant or its advisers, any material information or forward looking information (whether qualitative or quantitive) that are: (a) not reasonably expected to be included in the prospectus; or (b) publicly available? Please explain your views. We have no objection to this new provision. QUESTION 5: Do you agree that the proposed amendments to Paragraph 16 of the Code of Conduct set out in Appendix 1 implement the above proposals? Please explain your views. The proposed amendments to paragraph 16 of the Code of Conduct set out in Appendix 1 implement the above proposals. QUESTION 6: Do you agree that sponsors should take steps information or forward looking information (whether qualitative provided to analysts is contained in the relevant prospectus or does not involve a prospectus, the relevant listing document document? Please explain your views. to ensure that all material or quantitive), disclosed or where the proposed listing offering circular or similar We have no objection to this new provision. QUESTION 7: Do you agree that the proposed amendments to the CFA Code of Conduct set out in Appendix 2 implement the above proposal? Please explain your views. The proposed amendments to the CFA Code of Conduct set out in Appendix 2 implement the above proposal. Norton Rose Hong Kong 22 November 2010 HOK-#2330888-v1