China Securities Regulatory Commission, Guidelines for Contents and Formats for Information Disclosure by Companies That Offer Securities to the Public (No.26): Material Asset Restructurings of Listed Companies (Revised in 2017)

Issued: September 21 2017

Effective: as of date of issuance

Main contents: Major revisions of the Guidelines include:

– Simplification of the content of the disclosure of the restructuring proposal, and shortening of the period of suspension of trading.

– Restriction and cracking down on “flicker-style” and “copy cat” restructurings, requiring the disclosure, in the restructuring proposal and restructuring report, of: the opinions of the principles on the contemplated restructuring of the listed company's controlling shareholder and its parties acting in concert and the plans of the controlling shareholder and its parties acting in concert, directors, supervisors and senior management personnel for reducing their shareholdings during the period from the date of resumption of trading until completion of the contemplated restructuring; if the listed company discloses that it does not have a controlling shareholder, reference is to be made to the foregoing requirements, disclosing the opinions and shareholding reduction plans of the largest shareholder and the shareholders holding at least 5% of the shares; in the restructuring implementation report, whether the shareholding reductions are consistent with the disclosed plans should be disclosed.

– If the transaction counterparty is a partnership, a disclosure penetrating to the ultimate investors is to be made. Additionally, the affiliated relationships between the partners/ultimate investors and the other relevant entities involved in the contemplated transaction are to be disclosed. If, after completion of the transaction, the partnership will become the largest shareholder or a shareholder holding at least 5% of the shares, the source of the ultimate investors' funds, the partnership's profit distribution, bearing of losses and relevant agreement/arrangement for the execution of the partnership's affairs, and details on changes during the six months before the suspension of trading and during the suspension of trading for the contemplated transaction, such as the admission or withdrawal of partners, shall also be disclosed. If the transaction counterparty is a contractual private fund, a securities house asset management plan, separately managed account or fund subsidiary product, trust plan, wealth management plan, insurance asset management plan, a company specifically established for the purpose of the contemplated transaction, etc., disclosure is to be carried out with the reference to the foregoing requirements for a partnership.