The China Securities Regulatory Commission ("CSRC") has recently issued the Standards on the Contents and Formats of Information Disclosure by Companies Publicly Offering Securities No.26 – Material Asset Restructuring of Listed Companies (Revised in 2018), immediately effective from the date of issuance.
Major revisions in the following four aspects are introduced this time. The first mainly deals with the disclosure of core elements of major counterparties to the transaction and of subject matter of the transaction. It is no longer required to disclose the status of counterparties' business development, major financial indicators and lists of their affiliates; and it will be allowable to simplify or put off the disclosure of relevant information for certain transactions, such as overseas mergers and acquisitions (M&A), invitation for bids, auction, and listing. Second, requirements for the examination work of intermediary bodies are made more flexible. Intermediary bodies will be allowed to issue examination opinions in line with the actual progress in due diligence. Third, the previous mandatory requirement of disclosing the estimated value or the proposed price of a subject matter will not apply, provided that the subject matter of transaction has been made clear, a move to facilitate parties to the transaction to conduct full negotiations and consultations. Fourth, matters subject to approval such as flaws in the ownership and the establishment of environment protection projects, projected impacts brought by this transaction on the company's horizontal competition and related-party transactions, and the self-inspections into the selling and buying of stocks by relevant subjects, are no longer required to be disclosed, on the premise that relevant risks have been fully disclosed.