The National Equities Exchange and Quotations Company Limited ("NEEQ") has recently issued the Interim Measures of the National Equities Exchange and Quotations for Transfer of Stocks of STAQ-listed and NET-listed Companies and Delisted Companies (the "Measures"), immediately effective from the date of issuance.
Compared with the previous version, the amended Measures provide further clarity on sale of corporate stocks, engagement of publicly-offered funds in the trading, among other matters. The Measures stipulate that major shareholders (controlling shareholders, and shareholders with over 5% shareholding each) of a delisted company are banned from reducing their shareholdings, under any of three circumstances, e.g. "where three months have not yet elapsed since the major shareholders were publicly denounced by the stock exchange for their breach of the stock exchange's rules, adding that the directors, supervisors and senior executives of a delisted company are also prohibited from reducing their shareholdings, under any of three circumstances, e.g. "where three months have not been elapsed since the directors, supervisors or senior executives were publicly denounced by the stock exchange for their breach of the stock exchange's rules". Furthermore, the Measures require that publicly-offered funds, qualified foreign institutional investors (QFII) and Renminbi qualified foreign institutional investors (RQFII) are only allowed to sell the delisted companies' stocks they hold, but cannot buy in the stocks.