What is the Industry Principles? Is compliance with the liquidity standards in the Industry Principles voluntary? How does the Exchange enforce them?

The Industry Principles set out the best practices on liquidity provision standards for listed structured products. The Guide on Enhancing Regulation of the Listed Structured Products Market published by the Exchange requires issuers to follow the Industry Principles. Issuers cannot opt out.

The Industry Principles are general guidance for issuers and are not binding commitments nor do they give rise to enforceable obligations. For example, they do not give investors any specific rights against any issuer.

Occasional failure to comply with the Industry Principles will not in itself render an issuer or its liquidity provider liable to any sanction or enforcement action. That said, compliance with the Industry Principles is relevant to the Exchange’s assessment of an issuer’s suitability to list structured products. The Exchange will actively monitor issuers’ performance and request for explanations why an issuer has not complied with certain Industry Principles.