上市筹备 · 2026-02-04

Customer Complaint Handling Mechanism Disclosure for Prospectuses

The Hong Kong Stock Exchange (HKEX) published its “Consultation Conclusions on Review of Corporate Governance Code and Related Listing Rules” in December 2024, mandating that issuers on the Main Board and GEM disclose a customer complaint handling mechanism within their corporate governance reports for financial years commencing on or after 1 July 2025. This requirement, codified in amendments to Listing Rules Appendix 14 (Corporate Governance Code) and Appendix 17 (Environmental, Social and Governance Reporting Code), elevates complaint handling from an internal operational process to a mandatory listing obligation. For applicants preparing a prospectus (招股書) under the HKEX Listing Rules Chapter 9 (Equity Securities) or Chapter 20 (GEM), the SFC’s “Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission” (SFC Code of Conduct) paragraph 5.5 already requires sponsors (保薦人) to conduct reasonable due diligence on an applicant’s systems and controls. The convergence of these two regulatory streams means that a prospectus’s disclosure on customer complaint handling is no longer merely a risk factor footnote; it is a direct test of an applicant’s governance infrastructure and a potential trigger for sponsor liability under the Securities and Futures Ordinance (SFO) section 213.

The Regulatory Mandate: From CG Code to Prospectus Disclosure

The HKEX’s December 2024 amendments to the Corporate Governance Code (CG Code) introduce a new mandatory disclosure requirement under Code Provision D.2.7, effective for financial years commencing on or after 1 July 2025. This provision requires an issuer to “disclose its policy and procedures for handling customer complaints, including the channels for submitting complaints, the escalation process, and the expected timeline for resolution.” For Main Board applicants, the HKEX Listing Rules Chapter 9.11(44) requires a prospectus to contain all information necessary for a reasonable investor to make an informed assessment of the applicant’s business and its assets and liabilities, financial position, profits and losses, and prospects. The SFC’s “Guidelines for the Disclosure of Information in Prospectuses” (April 2023 edition) paragraph 4.2 explicitly states that disclosure must include “a description of the applicant’s internal control and risk management systems.”

The SFC Code of Conduct paragraph 5.5 imposes a specific duty on sponsors to “take reasonable steps to satisfy themselves that the applicant has in place adequate systems and controls to ensure compliance with applicable laws, rules and regulations.” In the context of a prospectus, this includes verifying that the applicant’s customer complaint handling mechanism (CCHM) meets the standards expected by the HKEX for listed entities. The SFC’s “Report on the Thematic Inspection of Sponsors’ Due Diligence on Internal Controls” (July 2023) found that 42% of reviewed sponsor files contained “inadequate documentation of the review of customer complaint handling processes.”

The SFC’s Enforcement Track Record

The SFC has demonstrated a willingness to take enforcement action against sponsors for deficiencies in due diligence on complaint handling systems. In SFC v. Standard Chartered Securities (Hong Kong) Limited (2023), the SFC reprimanded and fined the sponsor HKD 23 million for failing to identify material deficiencies in an applicant’s customer complaint escalation procedures during the IPO due diligence process. The SFC’s statement noted that “the sponsor’s failure to adequately review the applicant’s complaint handling mechanism constituted a breach of paragraph 5.5 of the Code of Conduct.”

The SFC’s “Enforcement Report 2024” recorded 17 enforcement actions against sponsors and intermediaries, with total fines exceeding HKD 150 million. Of these actions, 8 cases involved deficiencies in internal control due diligence, including customer complaint handling. The SFC’s “Guidelines on the Application of the Code of Conduct for Sponsors” (September 2023 edition) paragraph 6.2 specifically requires sponsors to “obtain and review the applicant’s written policies and procedures for handling customer complaints, including complaint logs for the preceding 36 months.”

Structuring the CCHM Disclosure in a Prospectus

The prospectus disclosure on customer complaint handling must be structured to satisfy three distinct regulatory audiences: the HKEX Listing Division reviewing the listing application under Chapter 9.11(44), the SFC’s Corporate Finance Division reviewing the prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) section 38D, and potential investors evaluating the applicant’s governance quality. The disclosure should appear in the “Risk Factors” section, the “Business” section, and the “Corporate Governance” section of the prospectus, with cross-references to avoid duplication.

The HKEX’s “Guidance Letter HKEX-GL86-16” (updated March 2024) on prospectus disclosure standards states that “an applicant should disclose its policies and procedures for managing key operational risks, including customer complaints, in sufficient detail to allow investors to assess the effectiveness of the applicant’s internal controls.” The SFC’s “Guidelines for the Disclosure of Information in Prospectuses” (April 2023) paragraph 8.5 requires that “where the applicant operates in a regulated industry, disclosure should include the applicant’s compliance with applicable regulatory requirements regarding customer complaint handling.”

Quantitative Disclosure Requirements

The prospectus should include quantitative data on customer complaints for the track record period (typically the three most recent financial years). The HKEX Listing Rules Chapter 9.11(44) requires disclosure of “any material adverse trends” in the applicant’s business. Customer complaint data is a direct indicator of operational quality. The disclosure should include:

Total number of complaints received per financial year
Number of complaints per category (service quality, product defects, billing disputes, regulatory compliance)
Percentage of complaints resolved within the applicant’s stated timeline
Number of complaints escalated to regulatory bodies (e.g., the SFC, the Hong Kong Monetary Authority (HKMA), or the Consumer Council)
Financial provisions made for complaint-related liabilities, with reference to HKAS 37 (Provisions, Contingent Liabilities and Contingent Assets)

The SFC’s “Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission” paragraph 5.5 requires sponsors to “review the applicant’s complaint logs and assess whether the number and nature of complaints indicate any systemic issues in the applicant’s operations.” For applicants in the financial services sector, the HKMA’s “Supervisory Policy Manual IC-1” (General Principles for Internal Controls, revised June 2023) requires licensed institutions to maintain “comprehensive complaint handling procedures that are documented, approved by senior management, and subject to periodic review.”

Qualitative Disclosure: Policy and Process Description

The prospectus should describe the applicant’s CCHM in sufficient detail to demonstrate compliance with the CG Code’s requirements for listed entities. The disclosure should cover:

The channels for submitting complaints (telephone, email, in-branch, online portal, regulatory referrals)
The escalation process (front-line resolution → supervisor review → compliance department → board-level committee)
The expected timeline for acknowledgment (typically 5 business days under HKMA guidelines) and resolution (30 business days for standard complaints, 60 business days for complex complaints)
The role of the board or a designated board committee in overseeing complaint handling
The process for identifying and reporting systemic issues to the board

The SFC’s “Guidelines on the Application of the Code of Conduct for Sponsors” (September 2023) paragraph 6.3 requires sponsors to “assess whether the applicant’s complaint handling procedures are consistent with industry best practices and applicable regulatory requirements.” For applicants in the securities and futures industry, the SFC’s “Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission” paragraph 12.2 requires licensed persons to “establish and maintain an effective complaints handling procedure that is fair, transparent, and timely.”

Cross-Border Considerations for PRC and Multinational Applicants

For applicants incorporated in the People’s Republic of China (PRC) or with significant PRC operations, the prospectus disclosure must address the interaction between Hong Kong regulatory requirements and PRC laws. The PRC’s “Regulations on the Supervision and Administration of Financial Institutions” (2023 revision) requires financial institutions to establish complaint handling mechanisms that comply with the “Measures for the Administration of Consumer Complaints in the Banking and Insurance Industries” (CBIRC Order No. 4 of 2020). The HKEX’s “Guidance Letter HKEX-GL94-18” (updated March 2024) on PRC-incorporated issuers requires disclosure of “any material differences between the applicant’s internal controls and the standards expected of a Hong Kong listed issuer.”

The SFC’s “Guidelines for the Disclosure of Information in Prospectuses” (April 2023) paragraph 10.3 requires that “where the applicant operates in multiple jurisdictions, the prospectus should disclose the complaint handling procedures applicable in each jurisdiction and any material differences between those procedures.” For BVI or Cayman Islands incorporated applicants with PRC operations, the prospectus should include a legal opinion from PRC counsel confirming that the applicant’s CCHM complies with applicable PRC laws, including the “Consumer Protection Law of the PRC” (2013 revision) and the “Regulations on the Protection of Consumer Rights and Interests in the Financial Sector” (2022).

VIE Structure Implications

For applicants using a Variable Interest Entity (VIE) structure, the prospectus disclosure on complaint handling must address the unique risks arising from the contractual arrangements. The HKEX’s “Guidance Letter HKEX-GL77-14” (updated March 2024) on VIE structures requires disclosure of “the mechanisms for protecting the interests of the listed issuer and its shareholders in the event of disputes with the VIE entities.” Customer complaints arising from the operations of VIE entities may create liabilities that are not directly enforceable against the listed issuer. The prospectus should disclose:

The contractual arrangements for handling complaints arising from VIE entity operations
The allocation of liability between the listed issuer and the VIE entities for complaint-related costs
The dispute resolution mechanisms applicable to complaints involving VIE entities
Any material litigation or regulatory actions involving VIE entities related to customer complaints

The SFC’s “Guidelines on the Application of the Code of Conduct for Sponsors” (September 2023) paragraph 7.2 requires sponsors to “review the legal and regulatory framework governing the applicant’s operations in each jurisdiction and assess whether the applicant’s complaint handling procedures are adequate to address the risks identified.”

Practical Implementation for Sponsors and Applicants

The preparation of a prospectus-compliant CCHM disclosure requires a structured work program that integrates with the sponsor’s due diligence process under the SFC Code of Conduct paragraph 5.5. The following steps should be included in the due diligence checklist:

Step 1: Policy Documentation Review

The sponsor should obtain and review the applicant’s written CCHM policy, complaint logs for the preceding 36 months, and any internal audit reports on complaint handling. The SFC’s “Report on the Thematic Inspection of Sponsors’ Due Diligence on Internal Controls” (July 2023) found that 58% of reviewed sponsor files did not contain evidence of a review of the applicant’s complaint handling policy. The review should assess whether the policy addresses:

The definition of a “complaint” (consistent with the SFC’s “Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission” paragraph 12.2)
The channels for submitting complaints
The escalation process
The timeline for resolution
The record-keeping requirements
The board oversight mechanism

Step 2: Complaint Log Analysis

The sponsor should analyze the applicant’s complaint logs to identify trends, patterns, and systemic issues. The analysis should cover:

The number of complaints per category
The resolution rate within the stated timeline
The number of complaints escalated to regulatory bodies
The financial provisions made for complaint-related liabilities
Any material litigation or regulatory actions arising from complaints

The HKEX Listing Rules Chapter 9.11(44) requires disclosure of “any material adverse trends” in the applicant’s business. A high volume of unresolved complaints or a trend of increasing complaints may constitute a material adverse trend that must be disclosed in the prospectus.

Step 3: Regulatory Compliance Assessment

The sponsor should assess whether the applicant’s CCHM complies with applicable regulatory requirements in all jurisdictions where the applicant operates. For Hong Kong-licensed entities, the SFC’s “Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission” paragraph 12.2 requires licensed persons to “establish and maintain an effective complaints handling procedure that is fair, transparent, and timely.” For PRC operations, the CBIRC’s “Measures for the Administration of Consumer Complaints in the Banking and Insurance Industries” (CBIRC Order No. 4 of 2020) requires financial institutions to establish complaint handling mechanisms that include:

A dedicated complaint handling department
A complaint handling timeline of 15 business days for standard complaints
A record-keeping requirement of at least 5 years
A reporting obligation to the CBIRC for material complaints

Step 4: Board and Management Interviews

The sponsor should interview the applicant’s board members, senior management, and compliance personnel to assess the actual implementation of the CCHM. The SFC’s “Guidelines on the Application of the Code of Conduct for Sponsors” (September 2023) paragraph 8.1 requires sponsors to “conduct interviews with the applicant’s management and key personnel to verify the accuracy of information provided and to assess the effectiveness of internal controls.” The interviews should cover:

The frequency of board review of complaint data
The process for identifying and reporting systemic issues to the board
The allocation of resources for complaint handling
The training provided to staff on complaint handling procedures

Actionable Takeaways for Prospectus Preparation

The HKEX’s CG Code amendment effective July 2025 requires all listed issuers to disclose a customer complaint handling mechanism; for IPO applicants, this standard applies from the prospectus stage, not post-listing, under the SFC’s sponsor due diligence requirements.
Sponsors must document their review of the applicant’s complaint logs for the preceding 36 months, including quantitative analysis of complaint categories, resolution rates, and regulatory escalations, to satisfy the SFC Code of Conduct paragraph 5.5 standard.
The prospectus disclosure on complaint handling should appear in the Risk Factors, Business, and Corporate Governance sections, with cross-references, and must include both quantitative data (complaint volumes, resolution rates, provisions) and qualitative descriptions (channels, escalation, timelines, board oversight).
For PRC-incorporated or VIE-structured applicants, the prospectus must address the interaction between Hong Kong regulatory standards and PRC laws, including a legal opinion confirming compliance with the PRC Consumer Protection Law and CBIRC regulations.
Applicants should establish a board-level committee to oversee complaint handling before filing the listing application, as the HKEX’s CG Code and the SFC’s enforcement history indicate that board involvement is a key indicator of governance quality.