Decision on Revising the Administrative Measures for the Takeover of Listed Companies
Decision on Revising the Administrative Measures for the Takeover of Listed Companies
Decision on Revising the Administrative Measures for the Takeover of Listed Companies
Order of the China Securities Regulatory Commission No.108
October 23, 2014
The Decision on Revising the Administrative Measures for the Takeover of Listed Companies, deliberated and adopted at the 52nd Chairman's Executive Meeting of the China Securities Regulatory Commission on July 7, 2014, is hereby promulgated and shall take effect as of November 23, 2014.
Xiao Gang Chairman of the China Securities Regulatory Commission
Decision on Revising the Administrative Measures for the Takeover of Listed Companies
I. Item 4 of Paragraph 2 of Article 6 shall be revised to read: "Where the acquirer is a natural person who falls under the circumstances stipulated in Article 146 of the Company Law;"
II. A new paragraph shall be added to Article 9 as Paragraph 4 which shall read: "A financial consultant shall not instigate, assist or collude with the entrusting party to prepare or disclose a report or an announcement which contains any false record, misrepresentation, or major omission, or engage in unfair competition or make use of the takeover of a listed company to seek improper gains."
III. Paragraph 1 of Article 13 shall be revised to read: "Where the shares in which the investor and persons acting in concert with the investor own the equities attain 5% of the issued shares of a listed company through securities transactions on a stock exchange, the investor and persons acting in concert with the investor shall prepare a report on change in equities within three days as of the date of the occurrence of the event and submit a written report to the CSRC and the stock exchange, notify the listed company and make an announcement; and shall not trade shares of the listed company during the aforesaid period."
IV. Paragraph 1 of Article 14 shall be revised to read: "Where the shares in which the investor and persons acting in concert with the investor own the equities in a listed company are to attain or exceed 5% of the issued shares of a listed company by way of a transfer agreement, the investor and persons acting in concert shall prepare a report on change in equities within three days as of the date of the occurrence of the event, and submit a written report to the CSRC and the stock exchange, notify the listed company and make an announcement."
V. Article 28 shall be revised to read: "In the case of acquisition of the shares of a listed company by way of tender offer, the acquirer shall prepare a tender offer report and engage a financial consultant, notify the target company, and make an indicative announcement on the summary of the tender offer report simultaneously.
"Where the takeover requires approval from the relevant authorities pursuant to the law, the acquirer shall make a special note in the summary of the tender offer report, and announce the tender offer report upon obtaining the approval."
VI. Item 9 of Paragraph 1 of Article 29 shall be revised to read: "quantity and proportion of shares held by the acquirer in the target company at the time of announcement of the takeover report;"
VII. Article 30 shall be revised to read: "Where the proportion of shares of a listed company proposed to be acquired by an acquirer pursuant to Article 47 of the Measures exceeds 30% of the issued shares of the listed company and the acquisition is required to be carried out in the form of offer, the acquirer shall make an indicative announcement on the summary of the tender offer report within three days upon conclusion of a takeover agreement or making of similar arrangement, and perform the announcement obligation pursuant to the provisions of Articles 28 and 29 of the Measures, and the requirement for formulation and announcement of a report on the takeover of a listed company shall be waived simultaneously; where the takeover offer is subject to approval is pursuant to the law, the announcement shall contain a special statement that the offer is subject to prior approval of the relevant approving party before being carried out.
"Where the approval is not approval, the acquirer shall announce cancellation of the takeover plan, within two working days as of the date of receipt of the notification, and notify the target company."
VIII. Article 31 shall be revised to read: "Where an acquirer fails to announce the tender offer report within 60 days upon making of the indicative announcement for the tender offer, the acquirer shall notify the target company on the working day following the expiry of the period, and make an announcement; afterwards, the acquirer shall make an announcement every 30 days until the tender offer report is announced.
"Where an acquirer intends to cancel the takeover plan at its own discretion after making the indicative announcement for the tender offer and before announcing the tender offer report, it shall announce the reason; the said acquirer shall not conduct a takeover of the same listed company within 12 months as of the date of announcement."
IX. Article 32 shall be revised to read: "The board of directors of the target company shall investigate the subject qualification, credit standing and takeover intent of the acquirer, analyze the terms of the offer, propose suggestions to the shareholders on whether or not to accept the tender offer, and engage an independent financial consultant to issue a professional opinion.
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