(1) Investigations
This table shows the number of investigations carried out by the Enforcement Team during 2019 (as compared to the previous two years).
The number of investigations carried out by the Enforcement Team in 2019 remained consistent with the same period last year. However, both 2018 and 2019 represent a steady increase when compared with previous years.
|
Twelve months ended
31/12/2019(1) |
Twelve months ended
31/12/2018(1) |
Twelve months ended
31/12/2017(1) |
|
MB |
GEM |
Total |
MB |
GEM |
Total |
MB |
GEM |
Total |
| Investigations |
88 |
24 |
112 |
87 |
24 |
111 |
65 |
21 |
86 |
| Cases involving: |
|
| Company |
83 |
22 |
105 |
81 |
21 |
102 |
54 |
18 |
72 |
| Current directors |
18 |
5 |
23 |
17 |
8 |
25 |
17 |
10 |
27 |
| Former directors |
15 |
3 |
18 |
33 |
13 |
46 |
27 |
10 |
37 |
| (1) |
Figures cover all cases investigated during the period (both concluded cases and cases that remain ongoing). |
(2) Issues under Investigation
The Enforcement Team has adopted a thematic approach to enforcement activity since 2014. Whilst the Enforcement Team continues to have the ability to pursue any breach of the Listing Rules (as per the Enforcement Policy Statement), during 2019, 93% of all investigations related to one or more of the enforcement themes identified below.
| ISSUES |
Twelve months ended
31/12/2019(1) |
Twelve months ended
31/12/2018(1) |
Twelve months ended
31/12/2017(1) |
|
MB |
GEM |
Total |
MB |
GEM |
Total |
MB |
GEM |
Total |
| ENFORCEMENT THEMES(2) |
|
| (1) Directors’ duties |
26 |
4 |
30 |
28 |
7 |
35 |
12 |
4 |
16 |
| (2) Failure to cooperate with an Exchange investigation |
3 |
0 |
3 |
4 |
1 |
5 |
8 |
2 |
10 |
| (3) Inaccurate, incomplete and/or misleading disclosure in corporate communication |
0 |
1 |
1 |
2 |
0 |
2 |
4 |
1 |
5 |
| (4) Failure to comply with procedural requirements in respect of notifiable/connected transactions |
6 |
0 |
6 |
6 |
1 |
7 |
6 |
1 |
7 |
| (5) Repeated breaches of the Listing Rules |
0 |
1 |
1 |
0 |
1 |
1 |
0 |
1 |
1 |
| (6) Delayed trading resumption |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| (7) Financial reporting - delays, or internal controls and corporate governance issues |
2 |
1 |
3 |
1 |
0 |
1 |
0 |
0 |
0 |
| MULTIPLE THEMES(3) |
47 |
13 |
60 |
38 |
12 |
50 |
29 |
10 |
39 |
| OTHERS: |
|
| Other Listing Rules not falling into any of the above categories |
4 |
4 |
8 |
8 |
2 |
10 |
6 |
2 |
8 |
| (1) |
Figures cover all cases investigated during the period (both concluded cases and cases that remain ongoing). |
| (2) |
Enforcement themes represent those that are the main focus of an investigation (whether or not it involves other issues). An investigation covering more than one enforcement theme will be disclosed under multiple themes. |
| (3) |
Number of investigations during the period under multiple themes involving Theme (1): (2019: 52; 2018: 41; 2017: 30); Theme (2): (2019: 5; 2018: 3; 2017: 2); Theme (3): (2019: 16; 2018: 17; 2017: 18); Theme (4): (2019: 34; 2018: 23; 2017: 20); Theme (5): (2019: 10; 2018: 7; 2017: 7); Theme (6): (2019: 3; 2018: 4; 2017: 2); Theme (7): (2019: 27; 2018: 24; 2017: 15).
|
(3) Outcome of Enforcement Actions by Listing Committee and Enforcement
The Enforcement Team’s average investigation time remained consistent with previous years. For the twelve months ended 31 December 2019, the average time for completion of an investigation was 9.6 months(1).
|
Twelve months ended
31/12/2019 |
Twelve months ended
31/12/2018 |
Twelve months ended
31/12/2017 |
|
MB |
GEM |
Total |
MB |
GEM |
Total |
MB |
GEM |
Total |
| Sanctions imposed(2) |
|
| Public censures |
9 |
2 |
11 |
14 |
7 |
21 |
7 |
1 |
8 |
| Public statements involving criticism |
1 |
1 |
2 |
0 |
0 |
0 |
1 |
0 |
1 |
| Other public statements(3) |
3 |
0 |
3 |
1 |
2 |
3 |
0 |
0 |
0 |
| Private reprimands |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| Directions involving(4): |
|
| Internal Control Review |
2 |
0 |
2 |
1 |
1 |
2 |
0 |
0 |
0 |
| Retention of Compliance Advisor |
2 |
1 |
3 |
2 |
6 |
8 |
1 |
0 |
1 |
| Training of Directors |
7 |
2 |
9 |
6 |
6 |
12 |
4 |
0 |
4 |
| Warning/ caution letters issued by Enforcement only |
8 |
7 |
15 |
11 |
3 |
14 |
8 |
1 |
9 |
| (1) |
From commencement of investigation to the decision as to the regulatory action to be taken. |
| (2) |
These figures represent the primary regulatory sanction imposed in a disciplinary action and save for (3) below, do not include other sanctions that may be imposed in the same action. |
| (3) |
Include Rule 2A.09(7) statement (GEM: GEM Listing Rule 3.10(7)) where, in the case of wilful or persistent failure by a director to discharge his responsibilities under the Listing Rules, the Exchange states its opinion that the retention of office by that director is prejudicial to the interests of investors; and also where the Listing Committee expresses its views that it would be minded to make such a statement had the resigned director stayed in office. These figures are in addition to and do not form part of the total number of primary regulatory sanctions imposed. |
| (4) |
These figures represent the total number of directions given in addition to the primary regulatory sanction imposed in a disciplinary action. |
(4) Number of Directors Subject to Disciplinary Sanctions
During 2019, the Exchange took disciplinary action and obtained sanctions against 63 directors, together with three supervisors of an issuer and a controlling shareholder of another issuer.
|
Twelve months ended
31/12/2019 |
Twelve months ended
31/12/2018 |
Twelve months ended
31/12/2017 |
|
MB |
GEM |
Total |
MB |
GEM |
Total |
MB |
GEM |
Total |
| Executive directors |
26 |
5 |
31 |
41 |
30 |
71 |
16 |
1 |
17 |
| Non-executive directors |
7 |
5 |
12 |
5 |
5 |
10 |
4 |
0 |
4 |
| Independent non-executive directors |
17 |
3 |
20 |
17 |
22 |
39 |
3 |
0 |
3 |
|
Total |
50 |
13 |
63 |
63 |
57 |
120 |
23 |
1 |
24 |