China Securities Regulatory Commission, Suspending and Terminating the Listings of Loss-making Listed Companies Implementing Measures (Revised)

Issued: November 30 2001
Effective: January 1 2002

Applicability: The Procedures apply to companies whose shares are listed on the Shanghai Stock Exchange and Shenzhen Stock Exchange (Article 23).

Main contents: The revised Procedures remove the system of particular transfer of shares and the procedure for grace period application. The Procedures provide that if a listed company has been operating at a loss for three consecutive years, the stock exchange shall suspend the listing of its shares (Article 5). Thereafter, the company shall disclose, on a monthly basis, the specific actions it takes or its non-action for resuming the listing of its shares (Article 8). If the first interim financial report after the suspension shows that the company has become profitable, the company may apply for resumption of the listing of its shares (Article 10). From the date of the resumption to the date of the disclosure of the first annual financial report after the resumption, the shares shall be subject to special treatment by the exchange (Article 14). If the company fails to disclose its first interim financial report after the suspension or if it fails to apply for resumption of listing after the disclosure of its first interim financial report after the suspension, the exchange shall terminate the listing of its shares (Article 15). If, after the resumption of the listing of its shares following a suspension, the company fails to disclose its first annual financial report or if its first annual financial report shows loss again, the exchange shall terminate the listing of its shares (Article 18).