China Securities Regulatory Commission, Compilation Rules for Information Disclosures by Companies That Offer Securities to the Public No.12: Legal Opinions and Lawyers' Work Reports for Public Share Offerings

Issued: March 1 2001
Effective: as of date of issue
Interpreting authority: China Securities Regulatory Commission
Applicability: These Rules apply to legal opinions and lawyers' reports issued in connection with initial public offerings and, to the extent applicable, subsequent issues, rights issues and issues of convertible bonds (Article 2).

Main contents: The Rules state that a legal opinion shall set out a conclusive opinion on the legal matters relating to the issue in question (Article 4). These matters are specified in the Rules (Article 24). The due diligence work, the verification process and the information and documents that have served as the basis for the legal opinion shall be fully described in a lawyer's work report (Article 5). The Rules provide detailed requirements as to the contents of a lawyer's work report, which generally correspond to the matters specified in Article 24 (Articles 30 to 52). Once submitted, the legal opinion and the lawyer's work report shall not be changed and all supplements or corrections shall be made by way of another legal opinion or work report (Article 7). Working drafts shall be prepared while preparing the legal opinions and work reports and they shall be taken as an important basis for determining whether a lawyer has exercised due diligence in his work (Articles 13 and 14). The Rules also require the lawyer to make a number of undertakings in his legal opinion, including a warranty that the legal opinion and work report do not contain any false records, misleading representations or material omissions (Articles 19 to 22).
Related legislation: PRC, Company Law (Amended), Oct 27 2005, CLP 2005 No.10 p21 and PRC, Securities Law (Amended), Oct 27 2005, CLP 2006 No.1 p31
Repealed legislation: Contents and Formats for Public Share Issuing Companies in Information Disclosure Guidelines (No. 6): Contents and Format of Legal Opinions (Revised), Jun 15 1999, CLP 1999 No.8 p6