Administrative Measures for the Issuance and Trading of Depository Receipts (for Trial Implementation) (Revised in 2023)
Administrative Measures for the Issuance and Trading of Depository Receipts (for Trial Implementation) (Revised in 2023)
Administrative Measures for the Issuance and Trading of Depository Receipts (for Trial Implementation) (Revised in 2023)
Order of the China Securities Regulatory Commission No. 215
February 17, 2023
The Administrative Measures for the Issuance and Trading of Depository Receipts (for Trial Implementation), adopted upon deliberation at the second executive meeting in 2023 of the China Securities Regulatory Commission on February 17, 2023, are hereby promulgated and shall come into force as of the date of promulgation.
Yi Huiman, Chairman of the China Securities Regulatory Commission
Appendix I: Administrative Measures for the Issuance and Trading of Depository Receipts (for Trial Implementation) (Revised in 2023)
(Adopted upon deliberation at the fourth chairman executive meeting in 2018 the of the China Securities Regulatory Commission on June 4, 2018 and revised at the second executive meeting in 2023 of the China Securities Regulatory Commission on February 17, 2023)
Chapter I General Provisions
Article 1 The Administrative Measures for the Issuance and Trading of Depository Receipts (for Trial Implementation)(the "Measures") are formulated in accordance with the Securities Law of the People's Republic of China (the "Securities Law"), the Law of the People's Republic of China on Securities Investment Funds, the Several Opinions on Launching the Pilot Program of Domestically Issuing Stocks or Depository Receipts by Innovative Enterprises (the "Several Opinions") and other relevant laws and administrative regulations in order to regulate the issuance and trading of depository receipts, protect the legitimate rights and interests of investors, and safeguard the order of the securities market.
Article 2 For the purpose of the Measures, depository receipts refer to securities that are issued by depository parties and offered within the territory of China based on overseas securities, and represent the equities of overseas underlying securities.
The Securities Law, the Several Opinions, the Measures and other provisions of the China Securities Regulatory Commission (the "CSRC") shall apply to the issuance and trading of depository receipts. Overseas underlying securities issuers of depository receipts shall participate in the issuance of depository receipts, perform their obligations as companies offering securities publicly or listed companies in accordance with the law and assume the corresponding legal liability.
Article 3 Where the company laws of overseas registration places and other laws and regulations apply to equity structures, corporate governance, standard operation and other matters of overseas underlying securities issuers, the degree of protection of domestic investors' rights and interests shall not be below the requirements of Chinese laws, administrative regulations and the provisions of the CSRC generally, and depository receipt holders shall actually enjoy rights and interests equivalent to those of overseas underlying securities holders, without any cross-border discrimination.
Article 4 The CSRC shall persistently supervise and administrate overseas underlying securities issuers of depository receipts subject to the relevant provisions on the supervision of listed companies, unless otherwise stipulated by laws, administrative regulations and the CSRC.
Stock exchanges shall, in accordance with articles of association, agreements and business rules, perform self-regulatory supervision of the listing and trading of depository receipts, and information disclosure by overseas underlying securities issuers and other information disclosure obligors.
Chapter II Issuance of Depository Receipts
Article 5 To publicly issue depository receipts where stocks serve as underlying securities, an overseas underlying securities issuer shall satisfy all of the following conditions:
(1) it meets the basic conditions for the public issuance of stocks set forth in Items 1 to 4 of Paragraph 1 of Article 12 of the Securities Law;
(2) it is a company incorporated in accordance with the law and existing for over three years and its major assets are not involved in any major ownership dispute;
(3) its actual controller has remained unchanged for the recent three years, and its shares held by controlling and controlled shareholders and shareholders controlled by its actual controller are not involved in any major ownership dispute;
(4) it and its controlling shareholder and actual controller have not committed any major unlawful act harming investors' legitimate rights and interests and social public interests in the recent three years;
(5) its accounting basics are standard and the internal control system is sound;
(6) directors, supervisors and senior executives shall have a good reputation and meet the job requirements prescribed by the laws of its place of registration, and it has no recent records of major violations or bad faith; and
(7) it meets other conditions specified by the CSRC.
Article 6 To publicly issue depository receipts where stocks serve as underlying securities, overseas underlying securities issuers shall present application documents to the stock exchanges according to the format and content specified by the CSRC.
Article 7 To apply for the public issuance of depository receipts, overseas underlying securities issuers shall, pursuant to the Securities Law, the Several Opinions and the provisions of the CSRC, go through the reviews by the stock exchanges in accordance with the law, and report to the CSRC for registration, and the specific review and registration procedures shall conform to relevant provisions of CSRC and stock exchanges.
Article 8 Where overseas underlying securities issuers apply for the public issuance and listing of depository receipts, they shall engage securities companies qualified for sponsoring as sponsors subject to Article 10 of the Securities Law. Sponsors shall do their utmost to perform their duties of recommending and consistently supervising the issuance and listing of depository receipts subject to laws, administrative regulations and the provisions of the CSRC.
In the case of any public issuance of depository receipts, securities companies shall undertake the underwriting subject to Articles 26 to 34 of the Securities Law, unless investors purchase depository receipts where non-new securities serve as underlying securities and the CSRC provides that it is unnecessary for securities companies to undertake the underwriting.
Article 9 The Securities Law, the Several Opinions and the provisions of the CSRC on listed companies' issuing securities apply to the proposed issuance of depository receipts where new securities of overseas underlying securities issuers serve as underlying securities after the initial public issuance and listing of depository receipts in China.
Chapter III Listing and Trading of Depository Receipts
Article 10 Depository receipts publicly issued in accordance with the law shall be listed and traded on stock exchanges in China. To apply for the listing of depository receipts, overseas underlying securities issuers shall meet the listing conditions specified in the business rules of stock exchanges and make listing applications as provided by stock exchanges; after stock exchanges review and approve the applications, both parties will sign an agreement on listing.
Stock exchanges shall develop the business rules on listing of depository receipts subject to the Securities Law, the Several Opinions and the provisions of the CSRC.
Article 11 The trading of depository receipts shall comply with laws, administrative regulations, the provisions of the CSRC and the business rules of stock exchanges.
The market maker trading method may be adopted for the trading of depository receipts subject to the related provisions. Stock exchanges shall monitor the trading of depository receipts in real time subject to Article 112 of the Securities Law, and may, as needed, restrict investors of securities accounts with major unusual transactions from trading according to business rules, and promptly report to the CSRC.
Article 12 The domestic reduction of depository receipts held by shareholders, actual controllers, directors, supervisors and senior executives of overseas underlying securities issuers and other investors of depository receipts shall abide by laws, administrative regulations, the provisions of the CSRC and the business rules of stock exchanges.
Article 13 The acquisition by overseas underlying securities issuers and the related equity change shall follow laws, administrative regulations and the provisions of the CSRC.
Article 14 The major asset restructuring and purchase of assets by means of issuance of depository receipts by overseas underlying securities issuers shall comply with laws, administrative regulations and the provisions of the CSRC.
......
Order of the China Securities Regulatory Commission No. 215
February 17, 2023
The Administrative Measures for the Issuance and Trading of Depository Receipts (for Trial Implementation), adopted upon deliberation at the second executive meeting in 2023 of the China Securities Regulatory Commission on February 17, 2023, are hereby promulgated and shall come into force as of the date of promulgation.
Yi Huiman, Chairman of the China Securities Regulatory Commission
Appendix I: Administrative Measures for the Issuance and Trading of Depository Receipts (for Trial Implementation) (Revised in 2023)
(Adopted upon deliberation at the fourth chairman executive meeting in 2018 the of the China Securities Regulatory Commission on June 4, 2018 and revised at the second executive meeting in 2023 of the China Securities Regulatory Commission on February 17, 2023)
Chapter I General Provisions
Article 1 The Administrative Measures for the Issuance and Trading of Depository Receipts (for Trial Implementation)(the "Measures") are formulated in accordance with the Securities Law of the People's Republic of China (the "Securities Law"), the Law of the People's Republic of China on Securities Investment Funds, the Several Opinions on Launching the Pilot Program of Domestically Issuing Stocks or Depository Receipts by Innovative Enterprises (the "Several Opinions") and other relevant laws and administrative regulations in order to regulate the issuance and trading of depository receipts, protect the legitimate rights and interests of investors, and safeguard the order of the securities market.
Article 2 For the purpose of the Measures, depository receipts refer to securities that are issued by depository parties and offered within the territory of China based on overseas securities, and represent the equities of overseas underlying securities.
The Securities Law, the Several Opinions, the Measures and other provisions of the China Securities Regulatory Commission (the "CSRC") shall apply to the issuance and trading of depository receipts. Overseas underlying securities issuers of depository receipts shall participate in the issuance of depository receipts, perform their obligations as companies offering securities publicly or listed companies in accordance with the law and assume the corresponding legal liability.
Article 3 Where the company laws of overseas registration places and other laws and regulations apply to equity structures, corporate governance, standard operation and other matters of overseas underlying securities issuers, the degree of protection of domestic investors' rights and interests shall not be below the requirements of Chinese laws, administrative regulations and the provisions of the CSRC generally, and depository receipt holders shall actually enjoy rights and interests equivalent to those of overseas underlying securities holders, without any cross-border discrimination.
Article 4 The CSRC shall persistently supervise and administrate overseas underlying securities issuers of depository receipts subject to the relevant provisions on the supervision of listed companies, unless otherwise stipulated by laws, administrative regulations and the CSRC.
Stock exchanges shall, in accordance with articles of association, agreements and business rules, perform self-regulatory supervision of the listing and trading of depository receipts, and information disclosure by overseas underlying securities issuers and other information disclosure obligors.
Chapter II Issuance of Depository Receipts
Article 5 To publicly issue depository receipts where stocks serve as underlying securities, an overseas underlying securities issuer shall satisfy all of the following conditions:
(1) it meets the basic conditions for the public issuance of stocks set forth in Items 1 to 4 of Paragraph 1 of Article 12 of the Securities Law;
(2) it is a company incorporated in accordance with the law and existing for over three years and its major assets are not involved in any major ownership dispute;
(3) its actual controller has remained unchanged for the recent three years, and its shares held by controlling and controlled shareholders and shareholders controlled by its actual controller are not involved in any major ownership dispute;
(4) it and its controlling shareholder and actual controller have not committed any major unlawful act harming investors' legitimate rights and interests and social public interests in the recent three years;
(5) its accounting basics are standard and the internal control system is sound;
(6) directors, supervisors and senior executives shall have a good reputation and meet the job requirements prescribed by the laws of its place of registration, and it has no recent records of major violations or bad faith; and
(7) it meets other conditions specified by the CSRC.
Article 6 To publicly issue depository receipts where stocks serve as underlying securities, overseas underlying securities issuers shall present application documents to the stock exchanges according to the format and content specified by the CSRC.
Article 7 To apply for the public issuance of depository receipts, overseas underlying securities issuers shall, pursuant to the Securities Law, the Several Opinions and the provisions of the CSRC, go through the reviews by the stock exchanges in accordance with the law, and report to the CSRC for registration, and the specific review and registration procedures shall conform to relevant provisions of CSRC and stock exchanges.
Article 8 Where overseas underlying securities issuers apply for the public issuance and listing of depository receipts, they shall engage securities companies qualified for sponsoring as sponsors subject to Article 10 of the Securities Law. Sponsors shall do their utmost to perform their duties of recommending and consistently supervising the issuance and listing of depository receipts subject to laws, administrative regulations and the provisions of the CSRC.
In the case of any public issuance of depository receipts, securities companies shall undertake the underwriting subject to Articles 26 to 34 of the Securities Law, unless investors purchase depository receipts where non-new securities serve as underlying securities and the CSRC provides that it is unnecessary for securities companies to undertake the underwriting.
Article 9 The Securities Law, the Several Opinions and the provisions of the CSRC on listed companies' issuing securities apply to the proposed issuance of depository receipts where new securities of overseas underlying securities issuers serve as underlying securities after the initial public issuance and listing of depository receipts in China.
Chapter III Listing and Trading of Depository Receipts
Article 10 Depository receipts publicly issued in accordance with the law shall be listed and traded on stock exchanges in China. To apply for the listing of depository receipts, overseas underlying securities issuers shall meet the listing conditions specified in the business rules of stock exchanges and make listing applications as provided by stock exchanges; after stock exchanges review and approve the applications, both parties will sign an agreement on listing.
Stock exchanges shall develop the business rules on listing of depository receipts subject to the Securities Law, the Several Opinions and the provisions of the CSRC.
Article 11 The trading of depository receipts shall comply with laws, administrative regulations, the provisions of the CSRC and the business rules of stock exchanges.
The market maker trading method may be adopted for the trading of depository receipts subject to the related provisions. Stock exchanges shall monitor the trading of depository receipts in real time subject to Article 112 of the Securities Law, and may, as needed, restrict investors of securities accounts with major unusual transactions from trading according to business rules, and promptly report to the CSRC.
Article 12 The domestic reduction of depository receipts held by shareholders, actual controllers, directors, supervisors and senior executives of overseas underlying securities issuers and other investors of depository receipts shall abide by laws, administrative regulations, the provisions of the CSRC and the business rules of stock exchanges.
Article 13 The acquisition by overseas underlying securities issuers and the related equity change shall follow laws, administrative regulations and the provisions of the CSRC.
Article 14 The major asset restructuring and purchase of assets by means of issuance of depository receipts by overseas underlying securities issuers shall comply with laws, administrative regulations and the provisions of the CSRC.
......