Administrative Measures for the Supervision of Unlisted Public Companies (Revised in 2019)
Administrative Measures for the Supervision of Unlisted Public Companies (Revised in 2019)
Administrative Measures for the Supervision of Unlisted Public Companies (Revised in 2019)
Order of the China Securities Regulatory Commission No.161
December 20, 2019
(Adopted at the 17th chairmen's executive meeting of the China Securities Regulatory Commission on September 28, 2012, and revised in accordance with the Decision on Revising the Administrative Measures for the Supervision of Unlisted Public Companies made by the China Securities Regulatory Commission respectively on December 26, 2013 and December 20, 2019)
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, the Administrative Measures for the Supervision of Unlisted Public Companies (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 public companies shall be carried out on the National Equities Exchange and Quotations (the "NEEQ") and all public companies' stocks that are transferred publicly shall be subject to centralized deposit by China Securities Depository and Clearing Corporation Limited ("CSDC").
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 offer preference shares, convertible corporate bonds and other securities in accordance with the law, administrative regulations and relevant provisions specified by the China Securities Regulatory Commission (the "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 the CSRC.
Chapter II Corporate Governance
Article 7 A public company shall formulate its articles of association in accordance with the law.
The 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 prescribed procedural provisions to guarantee shareholders' rights to be informed of, participate in, make inquiries and vote; 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 on issues exceeding the board's authority and the 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.
Related-party transactions may not harm the interests of public companies.
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.
Shareholders, actual controllers, directors, supervisors and senior officers of a public company shall not commit acts that infringe on the company's assets and the transmission of benefits, which harm the interests of the company.
No public company may provide a guarantee to others without the approval or authorization of its board of directors or general meeting.
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. The purchaser may neither gain financial aids from the purchased company in any form nor infringe upon the legal rights and interests of the purchased company and its shareholders by taking advantage of the purchase.
In a purchase of a public company, shares of the purchased company held by the purchaser may not be transferred within 12 months upon accomplishment of the purchase.
Article 17 Where a public company carries out major asset restructuring, assets under such restructuring shall be of clear ownership, valued in a fair manner, and the public company after restructuring shall be of improved governance mechanism and may not infringe upon the legal rights and interests of the public company and its shareholders.
Article 18 A public company shall set forth the establishment of voting avoidance system in its articles of association in accordance with the law and in light of the company's situations.
Article 19 A public company shall prescribe a dispute settlement mechanism in its articles of association. Shareholders have the right to protect their legal rights and interests through arbitration, civil litigation or other legal means in accordance with the law, administrative regulations and the company's articles of association.
Article 20 Where a company listed on the sci-tech innovation board subject to public transfer of its stocks has shares with special voting rights, it shall stipulate the following matters in its Articles of Association:
1. qualifications of holders of shares with special voting rights;
2. the percentage of the number of voting rights representing shares with special voting rights to the number of voting rights representing ordinary shares;
3. the scope of shareholders' general meeting matters on which holders of shares with special voting rights can take part in voting;
4. the locking and transfer restrictions of shares with special voting rights;
5. the conversion between shares with special voting rights and ordinary shares; and
6. other matters.
The NEEQ shall formulate specific provisions on the setting of voting right difference, and the existence, adjustment, information disclosure and investor protection in respect of companies that have shares with special voting rights.
Chapter III Information Disclosure
Article 21 Companies and other information disclosure obligors shall perform their information disclosure obligations in accordance with the law, administrative regulations and the provisions of the CSRC. The information disclosed shall be true, accurate and complete, and no false records, misleading statements or major omissions are allowed in the information disclosed. Information shall be disclosed to all investors by companies and other information disclosure obligors in a timely and fair manner.
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Order of the China Securities Regulatory Commission No.161
December 20, 2019
(Adopted at the 17th chairmen's executive meeting of the China Securities Regulatory Commission on September 28, 2012, and revised in accordance with the Decision on Revising the Administrative Measures for the Supervision of Unlisted Public Companies made by the China Securities Regulatory Commission respectively on December 26, 2013 and December 20, 2019)
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, the Administrative Measures for the Supervision of Unlisted Public Companies (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 public companies shall be carried out on the National Equities Exchange and Quotations (the "NEEQ") and all public companies' stocks that are transferred publicly shall be subject to centralized deposit by China Securities Depository and Clearing Corporation Limited ("CSDC").
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 offer preference shares, convertible corporate bonds and other securities in accordance with the law, administrative regulations and relevant provisions specified by the China Securities Regulatory Commission (the "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 the CSRC.
Chapter II Corporate Governance
Article 7 A public company shall formulate its articles of association in accordance with the law.
The 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 prescribed procedural provisions to guarantee shareholders' rights to be informed of, participate in, make inquiries and vote; 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 on issues exceeding the board's authority and the 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.
Related-party transactions may not harm the interests of public companies.
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.
Shareholders, actual controllers, directors, supervisors and senior officers of a public company shall not commit acts that infringe on the company's assets and the transmission of benefits, which harm the interests of the company.
No public company may provide a guarantee to others without the approval or authorization of its board of directors or general meeting.
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. The purchaser may neither gain financial aids from the purchased company in any form nor infringe upon the legal rights and interests of the purchased company and its shareholders by taking advantage of the purchase.
In a purchase of a public company, shares of the purchased company held by the purchaser may not be transferred within 12 months upon accomplishment of the purchase.
Article 17 Where a public company carries out major asset restructuring, assets under such restructuring shall be of clear ownership, valued in a fair manner, and the public company after restructuring shall be of improved governance mechanism and may not infringe upon the legal rights and interests of the public company and its shareholders.
Article 18 A public company shall set forth the establishment of voting avoidance system in its articles of association in accordance with the law and in light of the company's situations.
Article 19 A public company shall prescribe a dispute settlement mechanism in its articles of association. Shareholders have the right to protect their legal rights and interests through arbitration, civil litigation or other legal means in accordance with the law, administrative regulations and the company's articles of association.
Article 20 Where a company listed on the sci-tech innovation board subject to public transfer of its stocks has shares with special voting rights, it shall stipulate the following matters in its Articles of Association:
1. qualifications of holders of shares with special voting rights;
2. the percentage of the number of voting rights representing shares with special voting rights to the number of voting rights representing ordinary shares;
3. the scope of shareholders' general meeting matters on which holders of shares with special voting rights can take part in voting;
4. the locking and transfer restrictions of shares with special voting rights;
5. the conversion between shares with special voting rights and ordinary shares; and
6. other matters.
The NEEQ shall formulate specific provisions on the setting of voting right difference, and the existence, adjustment, information disclosure and investor protection in respect of companies that have shares with special voting rights.
Chapter III Information Disclosure
Article 21 Companies and other information disclosure obligors shall perform their information disclosure obligations in accordance with the law, administrative regulations and the provisions of the CSRC. The information disclosed shall be true, accurate and complete, and no false records, misleading statements or major omissions are allowed in the information disclosed. Information shall be disclosed to all investors by companies and other information disclosure obligors in a timely and fair manner.
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