China Securities Regulatory Commission, Circular on Further Regulating the Use of Proceeds of Listed Companies

中国证券监督管理委员会关于进一步规范上市公司募集资金使用的通知

April 02, 2007 | BY

clpstaff &clp articles &

Curbs on listed companies' use of proceeds.

Clp Reference: 3700/07.02.28 Promulgated: 2007-02-28

Issued: February 28 2007

Main Contents: Idle proceeds used temporarily to make up for liquid capital shall be limited to use in production and operations related to the main business, and may not be used for the placement or purchase of new shares through direct or indirect arrangements, or for the trading of shares and their derivatives or convertible bonds (Article 1). Listed companies shall improve the internal control system for the saving, use and management of proceeds. Where idle funds that account for at least 10% of the amount of proceeds raised are used to make up for liquid capital, deliberation and approval of the shareholders' general meeting shall be required (Article 2).

Related Legislation: State Council, Circular on the Transmission of the «China Securities Regulatory Commission, Opinions on Improving the Quality of Listed Companies» , Oct 19 2005, CLP 2005 No.10 p.7

clp reference:3700/07.02.28promulgated:2007-02-28

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