China Securities Regulatory Commission, Administration of Disclosure of Information on the Change of Shareholdings in Listed Companies Measures

Issued: September 28 2002
Effective: December 1 2002
Applicability: For the purposes of the Measures, "a change of shareholding" means a change or possible change to the number of shares held by a shareholder in a listed company as a result of securities transactions conducted on a stock exchange, or a change or possible change to the number of shares controlled by an investor in a listed company through other lawfully permitted ways (Article 2).

Main contents: An investor shall have information disclosure obligations under these Measures when (1) the issued shares it holds or controls in a listed company reach 5% or (2) it expects to hold or control more than 5% of the issued shares in a listed company (Articles 15 and 16). Such obligations shall also arise upon every actual 5% change to the shareholding or an expected change of more than 5% of the shareholding of an investor who already holds or controls at least 5% of the issued shares in a listed company (Articles 17 and 18). An expected change of shareholding includes the effect of a share transfer agreement, an administrative allocation of shares or a court judgment (Articles 21 to 23). When fulfilling its disclosure obligations, an investor shall submit a report on change of shareholding to the China Securities Regulatory Commission (CSRC) and the stock exchange, copy the same to the local office of CSRC, notify the listed company concerned and make an announcement to the public (Article 12). The investor shall stop dealing in the shares of the listed company for a certain period after its disclosure obligations arise (Articles 15 to 18). The report on change of shareholding is exempt but the public announcement is required if a change of shareholding of less than 5% results in the shares held or controlled by the investor being less than 5% of the issued shares of the listed company (Article 19). The report on change of shareholding is also exempt and a public announcement is required from the listed company instead of the investor if a change of shareholding occurs because of a reduction in the share capital of the listed company (Article 26). If a change of shareholding results in the investor obtaining actual control over the listed company, the provisions of the Administration of Acquisition of Listed Companies Measures shall apply.
Related legislation: PRC Company Law (Amended), Oct 27 2005, CLP 2005 No.10 p21; PRC Securities Law (Amended), Oct 27 2005, CLP 2006 No.1 p31; Administration of the Takeover of Listed Companies Measures, Sep 28 2002, CLP 2002 No.9 p43 and Disclosure of Relationships and Transactions between Affiliated Parties for Enterprise Accounting Guidelines, Jun 12 1997, CLP 1997 No.7 p4