Recently, the Shanghai Stock Exchange ("SSE") has issued the Circular on Further Clarifying Matters concerning the Sale of Shares through Block Trading by Major Shareholders of Listed Companies (the "Circular"), taking effect immediately as of the issue date.
The Circular regulates "how to identify the block trading to sell shares other than a class of shares", "the liability of the related parties involved in the block trading to sell shares other than a class of shares", etc. Further, the Circular makes it clear that if a major shareholder holds shares acquired via a call auction and shares obtained through means other than the call auction (the "shares subject to reduction limits") at the same time, selling such shares through ordinary channels for the block trading, within the given limited reduction percentage, shall be deemed as first selling shares subject to reduction limits; if the sales is beyond the given limited reduction percentage, it shall be deemed as first selling shares acquired through the call auction. Additionally, the Circular notes that the block trading of a class of shares and of shares other than such class shall be declared separately through different channels.