Administrative Measures for the Supervision of Unlisted Public Companies
Administrative Measures for the Supervision of Unlisted Public Companies
Administrative Measures for the Supervision of Unlisted Public Companies
Order of the China Securities Regulatory Commission No. 85
September 28, 2012
The Administrative Measures for the Supervision of Unlisted Public Companies, adopted at the 17th executive meeting of the China Securities Regulatory Commission on May 11, 2012, are hereby promulgated and will come into effect on January 1, 2013.
Chairman of the China Securities Regulatory Commission: Guo Shuqing
Administrative Measures for Supervision of Unlisted Public Companies
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, these Measures are formulated in accordance with the Securities Law, the Company Law and other laws and regulations concerned.
Article 2 For the purpose of these Measures, unlisted 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 to the public.
Article 3 An unlisted 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, these Measures and its Articles of Association.
Article 4 All unlisted public companies' stocks shall be subject to centralized depository by China Securities Depository and Clearing Corporation Limited, and transfer of such stocks to the public shall be done in securities trading floors established in accordance with the law.
Article 5 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 China Securities Regulatory Commission ("CSRC").
Chapter II Corporate Governance
Article 6 A public company shall formulate its Articles of Association in accordance with the laws.
CSRC will set forth the specific provisions for required terms of public companies' Articles of Association in accordance with the laws, regulating the formulation and revision of companies' Articles of Association.
Article 7 A public company shall establish systems of the shareholders assembly, 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 8 A public company's governance structure shall guarantee all of its shareholders, especially minority shareholders, may execute legal rights specified in laws, administrative regulations and the company's Articles of Association.
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 investor relation management to protect investors' legal rights and interests.
Article 9 The convening of, deliberation of proposals in, notice time of, procedures of meeting convening, powers of attorney for, voting and resolutions of an unlisted public company's shareholders assembly, 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 shareholders' assembly 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 shareholders' assembly and may not replace the shareholders' assembly to vote issues exceeding the board's authority and the assembly authorized scope.
Article 10 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, etc.
Article 11 A public company shall strengthen internal management, establishing accounting system and systems of financial management and risk control in accordance with relevant provisions so as to guarantee the company's financial statements be true and reliable and activities comply with the laws and regulations.
Article 12 When developing related-party transactions, any public company shall follow such principles of impartialness, voluntariness and compensation for equal value, guarantee transactions be impartial and fair, 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 13 A public company shall adopt 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 14 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 hire 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 15 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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