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Policy Statement & Submission

2008/12/29

Chamber urges withdrawal of extended blackout period

The Hong Kong General Chamber of Commerce objects strongly to amendments made on Appendix 18 Rules A (Absolute Prohibition) Point 3 of the "Combined Consultation Paper on Proposed Changes to the Listing Rules" published in January 2008, which is scheduled to come into effect on 1 January 2009. The proposed amendments are commonly understood as extending the "blackout period" on directors' dealing in their companies' securities on announcement of results.

All listing rules must strike the right balance amongst all stakeholders and must be conducive to the healthy development of Hong Kong as a world class financial centre. The proposed extension of the "blackout period" from two months to possibly up to seven months in a year is clearly excessive and imbalance, and undermines Hong Kong's competitiveness in attracting companies listed in Hong Kong as well as able people to serve as director on the board of listed companies.

We are not aware which other countries have similar or even longer extended "blackout period" as the one proposed by HKEX. We are of the view that the existing so called "one month rule" strikes the right balance in protecting non-board shareholders' rights as well as the board directors' rights. SFC is doing its job to safeguard fairness of the market and existing HKEX rules have provided adequate prevention of directors using price sensitive information in dealing with their companies' shares and require directors' full disclosure of their dealings.

We are also very concerned at the possible lack of share liquidity in the market in view of the proposed extended "blackout period" to listed companies that have their major shareholders serving on the board. The consequence of this could ruin the level playing field and could jeopardize the securities trading market in Hong Kong.

In view of the unintended impact and seriousness of the matter, the Chamber urges the withdrawal of the proposed amendments of the "blackout period" from its implementation on 1 January 2009.

Yours sincerely,



Andrew Brandler
Chairman

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