Issued: May 8 2006

Effective: as of date of issue

Interpreting authority: China Securities Regulatory Commission

Applicability: Issuers compiling prospectuses such as rights issue prospectuses, letters of intent for further issues of shares, prospectuses for further issues of shares, prospectuses for offering of convertible bonds and prospectuses for offering of convertible bonds for separate trading, and the summaries thereof, shall comply with the requirements of these Guidelines (Article 2).

Main contents: Parts Two and Three of the Guidelines set forth the requirements on prospectuses and the summaries thereof. Part Two contains 11 sections detailing provisions on the risk factors affecting a listed company, intra-industry competition and affiliated transactions, financial accounting information, management discussion and analysis, use of proceeds raised from the current issue and issues of the most recent five years and documents available for inspection (including interim reports, sponsor's recommendation letter for the offer, legal opinion and lawyer's work reports). Issuers shall disclose the total share capital prior to the current offer, the number and nature of the shares held by the top 10 shareholders, and the particulars of the lock-up of their shares (Article 16). Issuers shall also disclose the basic particulars of the controlling shareholder and de facto controller. The de facto controller shall be disclosed up to the ultimate state-controlled entity or natural person (Article 18). Article 31 requires issuers to disclose whether intra-industry competition exists between the controlling shareholder, de facto controller or enterprises under their control and the issuers. Where intra-industry competition exists or may exist, the issuer shall disclose specific measures to resolve such situation (Article 32). Article 35 requires issuers to disclose the details of affiliated transactions for the most recent three years and the latest period by classifying affiliated transactions into those of a recurring and those of an incidental nature. Issuers shall disclose clear measures for the reduction and regulation of affiliated transactions. The opinions expressed by independent directors on affiliated transactions shall also be disclosed (Article 36).