Guiding Opinions of the State Council on Pilot Program of Preferred Shares
Guiding Opinions of the State Council on Pilot Program of Preferred Shares
Guiding Opinions of the State Council on Pilot Program of Preferred Shares
Guo Fa [2013] No.46
November 30, 2013
The people's governments of all provinces, autonomous regions and municipalities directly under the Central Government, all ministries and commissions of the State Council and all institutions directly under the State Council,
For the purpose of carrying out the spirit of the 18th National Congress of CPC and the Third Plenum of the 18th Central Committee of the CPC, deepening the reform of financial system and supporting the development of the real economy, the State Council decides to conduct test on preferred share in accordance with relevant provisions of the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law") and Securities Law of the People's Republic of China (hereinafter referred to as the "Securities Law"). Pilot program of preferred share will be conducive to not only the further reform deepening of enterprise shareholding system, so as to provide a flexible tool of direct financing for issuers, optimize enterprise financial structure and promote enterprise merger, acquisition and reorganization, but also the amplification of the varieties of securities so as to provide investors with diversified investment channels, improve the proportion of direct financing and promote the stable development of capital market. In order to reliably and stably implement the pilot program of preferred share, the following guiding opinions are hereby put forward.
Article 1 Rights and Obligations of Preferred Shareholders
1. Definition of preferred shares. The term "preferred shares" refers to the share that is otherwise provided according to the Company Law, rather than the common share generally provided. Holders of preferred shares, namely, the preferred shareholders, take precedence over common shareholders in distribution of company profit and residual property, but are restricted in the right of participating in the company's decision-making and management.
Unless otherwise provided in the Guiding Opinions of the State Council on Pilot Program of Preferred Shares (hereinafter referred to as the "Guiding Opinions"), the rights and obligations of preferred shareholders and the management of preferred shares shall comply with the provisions of the Company Law. During the pilot program, it is not allowed to issue any preferred share with different priorities in distributions of dividend and residual property, but the issuance of preferred share with different settings on other terms is acceptable.
2. Priority in profit distribution. The preferred shareholders may take the priority to receive company's profits prior to the common shareholders according to the agreed dividend yield of face value.
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Guo Fa [2013] No.46
November 30, 2013
The people's governments of all provinces, autonomous regions and municipalities directly under the Central Government, all ministries and commissions of the State Council and all institutions directly under the State Council,
For the purpose of carrying out the spirit of the 18th National Congress of CPC and the Third Plenum of the 18th Central Committee of the CPC, deepening the reform of financial system and supporting the development of the real economy, the State Council decides to conduct test on preferred share in accordance with relevant provisions of the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law") and Securities Law of the People's Republic of China (hereinafter referred to as the "Securities Law"). Pilot program of preferred share will be conducive to not only the further reform deepening of enterprise shareholding system, so as to provide a flexible tool of direct financing for issuers, optimize enterprise financial structure and promote enterprise merger, acquisition and reorganization, but also the amplification of the varieties of securities so as to provide investors with diversified investment channels, improve the proportion of direct financing and promote the stable development of capital market. In order to reliably and stably implement the pilot program of preferred share, the following guiding opinions are hereby put forward.
Article 1 Rights and Obligations of Preferred Shareholders
1. Definition of preferred shares. The term "preferred shares" refers to the share that is otherwise provided according to the Company Law, rather than the common share generally provided. Holders of preferred shares, namely, the preferred shareholders, take precedence over common shareholders in distribution of company profit and residual property, but are restricted in the right of participating in the company's decision-making and management.
Unless otherwise provided in the Guiding Opinions of the State Council on Pilot Program of Preferred Shares (hereinafter referred to as the "Guiding Opinions"), the rights and obligations of preferred shareholders and the management of preferred shares shall comply with the provisions of the Company Law. During the pilot program, it is not allowed to issue any preferred share with different priorities in distributions of dividend and residual property, but the issuance of preferred share with different settings on other terms is acceptable.
2. Priority in profit distribution. The preferred shareholders may take the priority to receive company's profits prior to the common shareholders according to the agreed dividend yield of face value.
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