On 5 March 2018, HK SFC publicly criticized Nomura on takeover research.
- Criticized Nomura International (HK) Limited, for breaches of HK takeover code.
- Also cited Lee Yuen Yee, whilst acting as financial adviser to West China Cement.
- Lee is a licensed representative of Nomura Hong Kong, for the regulated activity.
- Work done in relation to possible mandatory offer for the shares of the company.
- Nomura fell within the definition of "associate" of offeree company, for purposes
of HK takeovers code on engagement as West China financial adviser November 2015.
- Bank did not comply with limits on issuance and distribution of research reports.
- On publishing five credit commentaries, and three weekly wraps, on West China.
- Research contained profit forecasts, which were not reported by Lee as required.
- Note 4 to Rule 8.1 of takeovers code provides that a financial adviser to offeree
company should stop issuing research reports on it, except if SFC prior consent.
- Any research reports with profit forecasts must comply with reporting per code.
- Regulator cited public criticism of Nomura HK for their breach of takeovers code.
- In determining sanction, SFC took account of Nomura HK and Lee’s cooperation.
- As well as self-reporting of the breach, and the remedial measures implemented.