The Shanghai Stock Exchange ("SSE") has recently released the Business Guidelines for the Disclosure of Information on Takeovers and Variations in Equity of Listed Companies (Draft for Comment) (the "Draft for Comment"), and the Shenzhen Stock Exchange ("SZSE") has issued a similar document at the same time, to solicit opinions from the public. The deadline for giving opinions on both documents is May 13, 2018.
Targeting existing prominent issues concerning the disclosure of information on takeovers and large-amount variations in equity, the Draft for Comment sets out major rules in the following seven respects. First, it is required to disclose information about the variation of large-amount shares of every one percent, instead of the previous five percent. Second, the largest shareholder of a listed company will be taken as one of parties bearing information disclosure obligations, even though the proportion of shares it holds is less than five percent. Third, a new rule is introduced, stating that when parties concerned are scrambling for the control over such listed company, each party is obligated to disclose information on variations in shares it holds. Fourth, requirements on penetrative information disclosure are added. The fifth is making clear standards to determine the ownership of rights and interests of asset management products and specifying consolidating principles in this regard. The sixth is providing clarity on the commitment and performance of share increase plans and reorganization plans. And the seventh is further regulating parties acting in concert and the signing and performance of proxy agreements for voting rights.