CAPITAL MARKETS: Stricter Environmental Protection Requirements

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The State Environmental Protection Administration (SEPA) has recently promulgated the Guidelines on Strengthen Environmental Protection Inspections of Listed Companies (Guidelines), which impose restrictions on highly-polluting enterprises applying for listing on domestic stock markets and applying for refinancing. In fact, since 2003, the enterprises in the industries of heavy pollution have been required to undergo an environmental inspection by SEPA when applying for listing and refinancing, according to the Notice of the State Environmental Protection Administration on the Inspection and Verification of Environmental Protection of the Corporations Applying for Listing and the Listed Corporations Applying for Refinancing released by SEPA in 2003 and the Notice of the State Environmental Protection Administration on Further Regulating the Inspection and Verification of Environmental Protection of the High-polluting Corporations Applying for Listing and the Listed Corporations Applying for Refinancing released by SEPA in 2007 (collectively referred to as Notices).