Compilation Rules for Information Disclosures by Companies That Offer Securities to the Public (No. 10): Contents and Format of Prospectuses of Companies Engaged in Real Property Development Business Special Provisions

Issued: February 6 2001
Effective: as of date of issue
Interpreting authority: China Securities Regulatory Commission
Applicability: For the purposes of these Provisions, "companies engaged in real property development business" include those that specialize in real property development and those that engage in real property development as a sideline business (Article 1).

Main contents: The Special Provisions require companies engaged in real property development business to make additional disclosures in the prospectus for their initial public offerings (Article 2). These additional disclosures include but are not limited to project development risks, financing risks, sales risks, land-related risks, joint venture control-related risks, work quality risks and other risks; and where a project is suspended, delayed or idled, special statement of risks shall be given (Article 3). The issuer is required to include in the prospectus separate sections on, respectively, the qualification grade of the company, the management and internal control systems of the company, the general conditions and business characteristics of the real property industry, the specific operational issues in the project development process, the status of the major projects of the company and the land resources of the company (Articles 4, 6, 7, 8, 9 and 11).
Related legislation: PRC, Company Law (Revised), Dec 25 1999, CLP 2000 No.1 p4; PRC, Securities Law, Dec 29 1998, CLP 1999 No.1 p25 and China Securities Regulatory Commission, Verification and Approval of Share Issue Procedures, Mar 16 2000, CLP 2000 No.3 p8
Repealed legislation: Restrictive provisions concerning issue of shares by the real property industry as stipulated in the Questions Concerning the Industrial Policies on Enterprises Applying to Issue Shares to the Public in 1993 Circular, 1993; Several Provisions Concerning the Issuing of Shares Circular, Dec 26 1996, CLP 1997 and Making a Success of Work on Issuing Shares in 1997 Circular, Sep 10 1997, CLP 1997 No.10 p12