UBS banned from sponsoring Hong Kong IPOs
- Dan Primack, author of Axios Pro Rata
Hong Kong Stock Exchange. Photo by Sunnymok/VCG via Getty Images
Swiss bank UBS has been suspended from sponsoring Hong Kong IPOs for the next 18 months, likely due to its role in the 2009 IPO of China Forestry Holdings (which later collapsed). UBS disclosed the suspension and $15.2 million fine in its annual report — without identifying China Forestry — and said that it will appeal.
Why it matters: This could be a record year for Hong Kong IPOs, aided by plans to accept dual-class share listings.
Bottom line, per Bloomberg: "At first glance, UBS has lost little. It will still be able to act as an underwriter, which generates far more in fees than sponsoring IPOs. The sponsor is the advising bank that guarantees the contents of a prospectus and essentially signs off on the listing. But landing the role of sponsor is generally a path for banks to take the job of lead underwriter, also known as joint global coordinator, so the SFC ban will indirectly hurt."