PRC-listed companies face new cash dividend requirements

Distribution of cash dividends is one of the most important methods for listed companies to provide the shareholders with rational investment returns. However, due to imperfect governance mechanisms, some listed companies do not have a sustainable and stable system for cash dividends. Some of them have distributed to their shareholders little or no cash dividends. As such, the China Securities Regulatory Committee (CSRC) recently released its Decision on Revising Several Provisions for Cash Dividends by Listed Companies (Decision), aiming to urge listed companies to distribute cash dividends. The Decision, following a draft released in August for public comments, took effect as of October 9 2008.