FAQs - Enquiries

The AFRC is entrusted with the statutory duty to provide for enquiries into non-compliances with regulatory requirements for financial reports of listed entities in Hong Kong.

Pursuant to section 40 of the AFRCO, the AFRC may initiate an enquiry if it appears to the AFRC that there is or may be a question whether or not there is a relevant non-compliance in relation to a listed entity, and the AFRC certifies in writing to that effect.

The term relevant non-compliance is defined in section 5 and Schedule 1 of the AFRCO.  For the purposes of the AFRCO generally including initiating an enquiry, there is a relevant non-compliance in relation to a listed entity if a relevant financial report, within the meaning of Part 1 of Schedule 1 of the AFRCO, has not complied with a relevant requirement, within the meaning of Part 1 of Schedule 1 of the AFRCO, that applies to the report.

A relevant requirement means an accounting requirement as to the matters or information to be included in the relevant financial report, as provided in:

• the relevant Ordinance or the Company Ordinance (CO) as in force at the material time (applicable for listed corporations only);
• the standards of accounting practices issued or specified under section 18A of the PA Ordinance, as in force at the material time;
• the International Financial Reporting Standards issued by the International Accounting Standards Board as in force at the material time;
• the Listing Rules;
• any generally acceptable accounting principles allowed for usage under the Listing Rules; or
• the relevant code (applicable for listed collective investment schemes only).

A relevant financial report means:

• in relation to a listed corporation,
  • a balance sheet of the corporation and any accounts annexed to it for the purposes of sections 129C and 129G of the relevant Ordinance;
  • a copy of the financial statements of the corporation sent under section 430 of the CO;
  • the accounts of the corporation delivered under section 336 of the relevant Ordinance or section 789 of the CO;
  • a summary financial report of the corporation sent in compliance with section 141CA of the relevant Ordinance, sections 441 or 444 of the CO;
  • a set of financial statements of the corporation (A) providing information on the results of the operations or cash flows of the corporation in a period of at least 3 months, (B) providing information on the state of affairs of the corporation as at the end of that period, and (C) issued, circulated, published or distributed for the purposes of the Listing Rules; or
  • a specified report required for a listing document issued by or on behalf of the corporation.

• in relation to a listed collective investment scheme,
  • a set of financial statements of the scheme
    • providing information on the results of the operations or cash flows of the scheme in a period of at least 3 months,
    • providing information on the state of affairs of the scheme as at the end of that period, and
    • issued, circulated, published or distributed for the purposes of the relevant code or the Listing Rules; or
  • a specified report required for a listing document issued by or on behalf of the scheme.

The AFRC may, in relation to the enquiry after taking into account the enquiry report:

• Close the case without further action;
• Suspend the enquiry for such period as the AFRC thinks fit;
• Secure the removal of the non-compliance in accordance with Division 4 of Part 4 of the AFRCO; or
• Carry out such other follow-up action in accordance with the AFRCO as the AFRC thinks fit.