Implementing Rules for Private placement of Shares by Listed Companies (Revised in 2017)
Implementing Rules for Private placement of Shares by Listed Companies (Revised in 2017)
Implementing Rules for Private placement of Shares by Listed Companies (Revised in 2017)
Order of the China Securities Regulatory Commission [2017] No. 5
February 15, 2017
(Released on September 17, 2007; and revised for the first time according to the Decision of the China Securities Regulatory Commission on Amending the Relevant Regulations on Material Assets Restructuring and Supporting Financing by Listed Companies on August 1, 2011; and revised for the second time according to the Decision of the China Securities Regulatory Commission on Amending the Implementing Rules for the Private Placement of Shares by Listed Companies on February 15, 2017)
Chapter I General Provisions
Article 1 For the purpose of regulating the private placement of shares by listed companies, these Implementing Rules is formulated in accordance with the relevant provisions of the Administrative Measures for the Issuance of Securities by Listed Companies (Order of the China Securities Regulatory Commission No. 30, hereinafter referred to as the Administrative Measures).
Article 2 The private placement of shares by listed companies shall be conducive to reducing related-party transactions, avoiding horizontal competition, enhancing independency, increasing asset quality, improving financial status and enhancing continuous profitability.
Article 3 Directors, supervisors and senior managers, sponsors and underwriters of a listed company, professionals and relevant organizations which issue special documents for the issuance of shares, and controlling shareholders, actual controllers and other insiders of the listed company, shall comply with relevant laws, regulations and rules, and act with due diligence and care, and shall not seek improper gains by taking advantage of the private placement of shares of shares and are forbidden from disclosing inside information, or trading securities or manipulating the securities trading price by using the inside information.
Article 4 The controlling shareholders, actual controllers and issuance objects of a listed company shall provide information to the listed company in a timely manner in accordance with the relevant provisions and cooperate with the listed company to fulfill the obligation of disclosing information in an authentic, correctly and complete manner.
Article 5 When the sponsor and a listed company choose the issuance objects for the private placement of shares and determine the issuing price, they shall adhere to the principles of fairness and equality, and represent the best interests of the listed company and all shareholders thereof.
Article 6 In case the issuance plan involves significant asset reorganization as specified by the China Securities Regulatory Commission (CSRC), the supporting financing shall be handled in accordance with the relevant existing provisions.
Chapter II Issuance Objects and Subscription Conditions
Article 7 The pricing benchmark date as mentioned in the Administrative Measures refers to the benchmark date for calculating the bottom price of the issuance. The pricing benchmark date is the first date of the issuance period of the private placement of shares. The listed company shall issue the shares at a price not lower than the bottom issuing price.
The calculation formula for the "average trading price of shares for the 20 trading days prior to the pricing benchmark date" as mentioned in the Administrative Measures shall be: average trading price of shares for the 20 trading days prior to the pricing benchmark date = total turnover of share trading for the 20 trading days prior to the pricing benchmark date/total quantity of shares traded for the 20 trading days prior to the pricing benchmark date.
Article 8 The "number of the issuance objects shall be no more than 10" as mentioned in the Administrative Measures means that the number of legal persons, natural persons and other legal investment organizations that subscribe for and obtain shares in the private placement shall not be more than 10.
If a securities investment fund management company makes subscription via more than 2 funds under its management, it shall be deemed as an issuance object.
When trust companies become the issuance objects, they shall only make subscription with their own funds.
Article 9 If the issuance objects fall within any of the following circumstances, the specific issuance objects and the pricing principle shall be determined by the resolution of the board of directors of the listed company on the private placement of shares and approved by the shareholders' meeting, and shares subscribed for shall not be transferred within 36 months of the date on which the issuance comes to an end:
1. they are controlling shareholders, actual controllers of the listed company and connected parties under their control;
2. they are investors who obtain the actual control of the listed company by subscribing for the shares issued; or
3. they are domestic and foreign strategic investors that the board of directors plans to introduce.
Article 10 If the issuance objects fall under any circumstances not stated in Article 9 hereof, the listed company shall determine the issuing price and issuance objects by way of auction in accordance with the provisions hereof after obtaining the issuance approval documents.
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Order of the China Securities Regulatory Commission [2017] No. 5
February 15, 2017
(Released on September 17, 2007; and revised for the first time according to the Decision of the China Securities Regulatory Commission on Amending the Relevant Regulations on Material Assets Restructuring and Supporting Financing by Listed Companies on August 1, 2011; and revised for the second time according to the Decision of the China Securities Regulatory Commission on Amending the Implementing Rules for the Private Placement of Shares by Listed Companies on February 15, 2017)
Chapter I General Provisions
Article 1 For the purpose of regulating the private placement of shares by listed companies, these Implementing Rules is formulated in accordance with the relevant provisions of the Administrative Measures for the Issuance of Securities by Listed Companies (Order of the China Securities Regulatory Commission No. 30, hereinafter referred to as the Administrative Measures).
Article 2 The private placement of shares by listed companies shall be conducive to reducing related-party transactions, avoiding horizontal competition, enhancing independency, increasing asset quality, improving financial status and enhancing continuous profitability.
Article 3 Directors, supervisors and senior managers, sponsors and underwriters of a listed company, professionals and relevant organizations which issue special documents for the issuance of shares, and controlling shareholders, actual controllers and other insiders of the listed company, shall comply with relevant laws, regulations and rules, and act with due diligence and care, and shall not seek improper gains by taking advantage of the private placement of shares of shares and are forbidden from disclosing inside information, or trading securities or manipulating the securities trading price by using the inside information.
Article 4 The controlling shareholders, actual controllers and issuance objects of a listed company shall provide information to the listed company in a timely manner in accordance with the relevant provisions and cooperate with the listed company to fulfill the obligation of disclosing information in an authentic, correctly and complete manner.
Article 5 When the sponsor and a listed company choose the issuance objects for the private placement of shares and determine the issuing price, they shall adhere to the principles of fairness and equality, and represent the best interests of the listed company and all shareholders thereof.
Article 6 In case the issuance plan involves significant asset reorganization as specified by the China Securities Regulatory Commission (CSRC), the supporting financing shall be handled in accordance with the relevant existing provisions.
Chapter II Issuance Objects and Subscription Conditions
Article 7 The pricing benchmark date as mentioned in the Administrative Measures refers to the benchmark date for calculating the bottom price of the issuance. The pricing benchmark date is the first date of the issuance period of the private placement of shares. The listed company shall issue the shares at a price not lower than the bottom issuing price.
The calculation formula for the "average trading price of shares for the 20 trading days prior to the pricing benchmark date" as mentioned in the Administrative Measures shall be: average trading price of shares for the 20 trading days prior to the pricing benchmark date = total turnover of share trading for the 20 trading days prior to the pricing benchmark date/total quantity of shares traded for the 20 trading days prior to the pricing benchmark date.
Article 8 The "number of the issuance objects shall be no more than 10" as mentioned in the Administrative Measures means that the number of legal persons, natural persons and other legal investment organizations that subscribe for and obtain shares in the private placement shall not be more than 10.
If a securities investment fund management company makes subscription via more than 2 funds under its management, it shall be deemed as an issuance object.
When trust companies become the issuance objects, they shall only make subscription with their own funds.
Article 9 If the issuance objects fall within any of the following circumstances, the specific issuance objects and the pricing principle shall be determined by the resolution of the board of directors of the listed company on the private placement of shares and approved by the shareholders' meeting, and shares subscribed for shall not be transferred within 36 months of the date on which the issuance comes to an end:
1. they are controlling shareholders, actual controllers of the listed company and connected parties under their control;
2. they are investors who obtain the actual control of the listed company by subscribing for the shares issued; or
3. they are domestic and foreign strategic investors that the board of directors plans to introduce.
Article 10 If the issuance objects fall under any circumstances not stated in Article 9 hereof, the listed company shall determine the issuing price and issuance objects by way of auction in accordance with the provisions hereof after obtaining the issuance approval documents.
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