Administrative Measures for the Supervision over Unlisted Public Companies (Revised in 2013)
Administrative Measures for the Supervision over Unlisted Public Companies (Revised in 2013)
Administrative Measures for the Supervision over Unlisted Public Companies (Revised in 2013)
Order of the China Securities Regulatory Commission No.96
December 26, 2013
(Adopted at the 17th chairmen's executive meeting of the China Securities Regulatory Commission (hereinafter referred to as "CSRC") on September 28, 2012, and revised in accordance with the Decision on Revising the Administrative Measures for the Supervision over Unlisted Public Companies made by CSRC on December 26, 2013.)
Chapter I General Provisions
Article 1 For the purpose of regulating unlisted public companies' stock transfer and offering activities, protecting investors' legal rights and interests, and maintaining the society's public interests, Administrative Measures for the Supervision over Unlisted Public Companies (Revised in 2013) (hereinafter referred to as the "Measures") are formulated in accordance with the Securities Law, the Company Law and other relevant laws and regulations.
Article 2 For the purpose of the Measures, the unlisted public companies (hereinafter referred to as the "public companies") refer to those joint stock limited companies, which fall within any of the following circumstances and stocks of which are not listed on any securities exchange for trading:
1. shareholders are accumulated to over 200 as a result of offering or transferring stocks to particular investors; or
2. stocks are transferred in a public manner.
Article 3 A public company shall be of clear equity structure, have legal and standardized operation and sound governance structure, and perform obligation of information disclosure in accordance with the laws, administrative regulations, the Measures and its articles of association.
Article 4 Transfer of such stocks in a public manner by the public companies shall be done on the share transfer system and all public companies' stocks that are transferred publicly shall be subject to centralized deposit by China Securities Depository and Clearing Corporation Limited.
Article 5 The public companies may conduct equity financing, debt financing, asset restructuring and other activities in accordance with the law.
The public companies shall issue preference shares and other securities in accordance with the law, administrative regulations and relevant provisions specified by CSRC.
Article 6 Securities companies, law firms, accounting firms and other securities service institutions issuing special documents to companies shall act diligently and honestly, carefully perform obligations of prudent check, issue professional opinions based on legally formed business rules, industrial practice standards and code of ethics, guarantee the authenticity, accuracy and completeness of documents issued, and subject themselves to the supervision and administration of CSRC.
Chapter II Corporate Governance
Article 7 A public company shall formulate its articles of association in accordance with the law.
CSRC will set forth the specific provisions for required terms of public companies' articles of association in accordance with the law, regulating the formulation and revision of companies' articles of association.
Article 8 A public company shall establish systems of the general meeting, the board of directors and the board of supervisors by taking company features and governance mechanism into joint consideration to define their duties and rules of procedure.
Article 9 A public company's governance structure shall guarantee all of its shareholders, especially the exercise of legal rights empowered by laws, administrative regulations and the company's articles of association by minority shareholders.
Shareholders are entitled for being informed of and participating in the company's major issues specified in laws, administrative regulations and the company's articles of association.
A public company shall establish and improve its investor relations management and protect the legitimate rights and interests of investors.
Article 10 The convening of, deliberation of proposals in, notice time of, procedures of convening, powers of attorney for, voting and resolutions of a public company's general meeting, board of directors and board of supervisors shall comply with laws, administrative regulations and the company's articles of association; and meeting minutes shall be kept in a complete and safe manner.
Deliberation of proposals by the general meeting shall comply with procedural provisions to guarantee shareholders' rights of being informed of, participating in, inquiring and voting; and the board of directors shall make resolutions on proposed issues within its authority and the scope authorized by the general meeting and may not replace the general meeting to vote issues exceeding the board's authority and the assembly authorized scope.
Article 11 A public company's board of directors shall carry out adequate discussion and assessment on whether the company's governance mechanism brings appropriate protection and equal rights to all of the company's shareholders.
Article 12 A public company shall strengthen internal management and establish accounting system and systems of financial management and risk control in accordance with relevant provisions so as to guarantee the authenticity, reliability and compliance with the laws and regulations of the company's financial statements.
Article 13 When developing related-party transactions, any public company shall follow such principles of impartialness, voluntariness and compensation for equal value, guarantee the impartiality and fairness of the transactions, protect the company's legal rights and interests, and go through corresponding procedures of deliberating in accordance with the laws, administrative regulations, CSRC provisions and the company's articles of association.
Article 14 A public company shall take effective measures to prevent shareholders and their associated parties from appropriating or transferring the company's capital, assets or other resources in various forms.
Article 15 When conducting M&A and restructuring activities, a public company shall go through corresponding decision-making procedures in accordance with the laws, administrative regulations, CSRC provisions and the company's articles of association and engage a securities company and securities service institutions concerned to present professional opinions.
No entity or individual may infringe upon the public company's and its shareholders' legal rights and interest by taking advantage of M&A or restructuring.
Article 16 When purchasing a public company, the purchaser or its actual controller shall be of improved corporate governance mechanism and good faith record.
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